Hanoi (VNA) – The Government’s foreigndebts have been declining sharply and under the Government’s control, DeputyPrime Minister Vuong Dinh Hue said while chairing a meeting with leaders ofsome ministries, sectors and the National Financial Supervisory Commissionin Hanoi on August 9.

In 2018, the Government set a loan guaranteelimit of 700 million USD but did not guarantee to borrow any internationalloans for projects, Hue said, adding that the Government prioritised domesticloans because they had lower interest rates.

The Ministry of Finance reported that in the2011-2017 period, Vietnam’s foreign debts averagely increased by 16.7 percentper year.

The country’s foreign debts reduced to 46percent of its gross domestic product (GDP) by the end of 2018 from 48.9percent a year earlier.

Of the sum, the Government’s foreign debts, Government-guaranteeddebts and debts borrowed by domestic businesses were 19.3 percent, 4.4 percentand 22.3 percent, respectively.

The ratio of debt repayment to total import andexport turnover was about 25 percent, meeting international regulations andpractices.

With the aforesaid outcomes, Hue affirmed thatthe country’s foreign debts are still below the ceiling rate of 50 percent setby the National Assembly and under the Government’s control.

He noted that up to 48.4 percent of thecountry’s foreign debts in 2018 came from loans of businesses and financial andcredit institutions, compared to 25.6 percent in 2011 and 40.4 percent in 2016.

The rapid increase of foreign debts in the formof self-repayment was mainly seen in the foreign-invested sector which accountedfor 76 percent of the total debts of enterprises, he said.

The Deputy PM asked ministries and relatedsectors to strengthen management of foreign debts according to legalregulations, including the law on public debt management, and resolutions ofthe NA and Government on public debts to ensure the capital demand of the economyin general as well as the rights and obligations of enterprises.

He assigned the Ministry of Finance and the StateBank of Vietnam to coordinate with relevant ministries to better the law onself-repayment debt management of enterprises and focus on supervising thetotal debts and debt structure as well as take into account risks for eachbusiness, in accordance with international practices.

The Ministry of Planning and Investment wastasked to review and evaluate the overall foreign investment, especiallylarge-scale projects, and the impacts of foreign loan conditions on FDI growthand attraction. 

According to the Ministry of Finance, in thefirst six months of 2019, the total corporate bond issuance exceeded 116trillion VND (4.98 billion USD), a year-on-year rise of 7.4 percent. Of which,36.7 trillion VND were issued by commercial banks (making up 36 percent) andreal estate firms 22.12 trillion VND (19 percent). The remainders were issuedby stock companies, 3.5 percent, and other businesses.

As of June, the capitalisation of the corporatebond market was equivalent to 10.22 percent of the GDP, surpassingthe set target of 7 percent in 2020.-VNA