4 highlights of public debt management

	Enhance financial management capacity to effectively control public debt
	Flexible method of borrowing and paying public debt to minimize risks
	Strictly control the debt of local government

Public debt growth rate in 2018 is only 6%. Photo: internet.

Concretize the Law on Public Debt Management

Firstly, it is necessary to implement the Law on Public Debt Management into life in the shortest time.

The Law on Public Debt Management No. 20/2017 / QH14 was issued, replacing the Law on Public Debt Management in 2009 to institutionalize the guidelines and views of the Party and State on safe, sustainable and effective public debt management in accordance with the country's socio-economic development conditions in the new period. The law is assessed to have fundamental changes in the unification of public debt mobilization functions; strengthening measures to improve the quality of public debt management.

The Law on Public Debt Management 2017 was passed on November 23, 2017 and takes effect from July 1, 2018. The time from the approval to the effective time is only 7 months. State management on public debt has scope and wide management. The content of state management on public debt therefore has a close relationship with other contents of state economic management.

With the aim of timely and synchronous implementation of the provisions of the Law on Public Debt Management, as soon as the Law comes into effect, the Ministry of Finance proactively reported to the Government to determine the guiding documents according to 7 groups of issues including: Public debt management operations; Issuing, registering, depositing, listing and trading Government debt instruments; Managing the mobilization of foreign loans and preferential loans of the Government; Guidelines for re-lending foreign loans of the Government; Issuance and management of Government guarantees; Debt management of local governments; Management of accumulation fund for debt repayment.

Based on the provisions of the Law on Promulgation of Legal Documents; the program of developing legal documents in 2018 by the Government, the Minister of Finance issued Decision No. 952 / QD-BTC on the plan to implement the Law on Public Debt Management, which defines the implementation of the Law on Public Debt Management is one of the key tasks of the Ministry of Finance in 2018, requiring relevant units to prioritize resources and organize implementation to ensure timely progress and quality, efficiency and savings. The decision also specifies the content of the work, the time limit for completion, the responsibility of the agency and the leading agency and the coordinating units.

In the spirit of urgency and seriousness, the Ministry of Finance has completed the submission to the Government for promulgation of Decrees guiding the Law on Public Debt Management in 2017, quality assurance as well as requirements. The draft decrees are drafted, consulted with domestic and foreign agencies, organizations and experts, and received and explained in accordance with the provisions of law.

The Law on Public Debt Management is the only law that guiding documents take effect simultaneously with the effective time of the Law. In addition, after the Law and the documents take effect, the Ministry of Finance is to organize the dissemination of laws to related subjects through popular seminars with domestic agencies, foreign organizations and donors, develop, disseminate and disseminate legal documents and guidelines.

With the efforts of agencies and units of the Finance sector, the organization of implementing the Law on Public Debt Management in 2017 initially achieved positive results with the implementation of synchronous provisions of the Law immediately from the time the Law took effect.

Control public debt ceiling

Secondly, contributing to reducing public debt growth as well as controlling public debt ceiling in a safe range, Mr. Long said, if in the period of 2011-2015, Vietnam's public debt growth rate is at an average of 18.1% / year, the period 2016-2018 has gone down to an average of 8.6% / year, with 2018 being only 6%. In terms of public debt ceiling, the ratio of public debt decreased from the end of 2016 to 63.7% of GDP to 61.4% of GDP at the end of 2017. So far we have until the end of January to pay for disbursements. The budget should be estimated at 2018 public debt at less than 61% of GDP.

Third, continue to restructure public debt towards sustainability, efficiency in the direction of positive structure, term, interest rate, ensuring debt repayment capability. Diversifying government bond investors (reducing the proportion of bonds held by commercial banks from about 78% at the end of 2016 to about 53.1%), by issuing bonds of 5 years or more (including 20-30 year long terms) to extend the term of Government bond portfolio and reduce the interest rate of Government bond mobilization; Strengthening the management and supervision of Government debt guarantee, overspending and borrowing of local budgets within the scope of the National Assembly's decision.

Fourthly, effectively implementing prestige rate: The year of 2018 can be considered a rare year because Vietnam has been upgraded by two of three international credit rating agencies. In 2018, Moody's has raised the ranking of long-term Vietnam Government bonds in unsecured foreign currencies and loans to Ba3 from B1 and changed its outlook to stable from positive level. Fitch upgraded Vietnam from BB- to BB with stable outlook.

Law on Public Debt Management: Institutional consultation should be parallel with the enhancement of implementation ability

Besides improving the position of the country in the international arena, the national credit upgrade has a very important meaning to reduce the cost of mobilizing foreign loans by both the Government and businesses; improve the competitiveness of the economy; contributing to attracting foreign direct investment. In addition, national prestige rating has a positive impact on the ranking of domestic banks.