August 6, 2026 | 12:27 pm
TEMPO.CO, Jakarta – The Merah Putih Bond, which will be issued by Danantara, could help deepen Indonesia’s financial market by creating a new source of long-term financing outside the state budget, bank lending, and government securities, an economist said.
M Rizal Taufikurahman from the Institute for Development of Economics and Finance (INDEF) said the bond could expand national financing capacity if it successfully attracts long-term funds for productive projects.
“Merah Putih Bond has the potential to deepen the market if it truly creates new long-term financing sources beyond the state budget, banking credit, and government securities,” Rizal told ANTARA in Jakarta on Thursday.
Merah Putih Bond Could Expand Long-Term Financing Sources
Rizal said the instrument could attract funds from pension funds, insurance companies, institutional investors, and the public to support strategic and productive projects.
He said the bond has significant potential to strengthen Indonesia’s financing capacity while reducing dependence on short-term funding and external financing.
However, Rizal noted that the success of the instrument should not only be measured by the amount of funds collected.
Transparency and Project Quality Key to Market Impact
According to Rizal, a stronger financial market requires more than large fundraising figures. The bond’s impact should also be assessed through its ability to expand the investor base, improve secondary market liquidity, lower capital costs, and provide additional financing for productive sectors.
“If the underlying projects are unclear, cash flows are weak, and governance is not transparent, Merah Putih Bond risks merely shifting funds from government securities or other corporate bonds, making the impact on market deepening only superficial,” Rizal said.
Economist Suggests Incentives, Warns of Fiscal Risks
Rizal suggested that the government provide incentives such as competitive coupon tax rates, market maker facilities, proportional prudential treatment for institutional investors, and strict transparency and reporting standards for funded projects.
However, he warned that the government should avoid providing hidden guarantees, forcing state-owned enterprises to purchase the bonds, or creating excessive privileges.
Such measures, he said, could create moral hazard risks and increase potential contingent liabilities for the state budget.
“The government should not provide implicit guarantees or excessive privileges because they could create fiscal risks,” Rizal said.
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