GOVT TO WITHDRAW STAND-BY LOAN FROM JAPAN

Denpasar, Bali, June 15 (ANTARA) - The Indonesian government will this year withdraw a stand-by loan from Japan in order to support the stability of the country's economy, a finance ministry official said.

Head of the Fiscal Policy Affairs of the Finance Ministry Anggito Abimanyu said here on Sunday that the government would withdraw the stand-by loan but was not yet certain on the amount of the loan that would be withdrawn.

The government has a stand-by loan commitment in yen denomination with Japan amounting to US$1.5 billion as a reserve for the issuance of its Samurai bonds. The stand-by loan will be used if the Samurai bonds could not be sold.

The government's stand-by loans up to now have reached US$5.5 billion dollars. About US$2 billion of the the stand-by loans came from the World Bank, US$1.5 billion from Japan, US$1 billion dollars from Australia and US$1 billion from the Asian Development Bank (ADB).

"We have not yet used the loans," Abimanyu said.

In the meantime, the government also issued government bonds in order to cover its budget deficit and support the economic performance.

Director General of the States' External Debts Management Rahmat Waluyanto said that the gross target of the government bond sales was Rp142 trillion, where Rp99.7 trillion were not guaranteed with a stand-by loan the government had obtained from multilateral and bilateral partners.

The government in 2009 has raised its budget deficit from 1 percent to 2.5 percent in order to anticipate crisis faced ahead. This is particularly made to support economic stimulus programs.

This year the government issued a tax incentive policy in order to support the economy through increasing the people's purchasing power and to anticipate economic downturn.

With this policy, the tax revenues in the 2009 state budget were lowered from Rp725 trillion to Rp661,8 trillion only.