THE COMPILATION OF FLOW OF FUNDS STATISTICS IN INDONESIA

Contributed to the Discussion of Working Party on Financial Statistics (WPFS) Meeting and Workshop on the Implementation of the SNA 2008 Hendy Sulistiowaty Eko Ariantoro Paris, October 24-27 th 2011

O U T L I N E

CONCEPT FOF COMPILATION A WAY FORWARD

 Basic Concept of FOF Construction  Data Coverage of Indonesia FOF  Data Coverage: Australia, US, MFSM  Data Sources Availabilty  The Process of FOF Compilation  Quarterly & Annualy FOF Statistics  The Needs of Further Improvement  Conclusion & Remarks

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BASIC CONCEPT OF FOF CONSTRUCTION ROW PRODUCTION SECTORS FINANCIAL SECTORS

X Export M Import F U Fin-Uses F S Fin-Sources I Income Distribution P Production C Consumption FINANCIAL USES FINANCIAL SOURCES FOF NET LENDING / BORROWING NON-FINANCIAL INVESTMENT / GFCF GROSS SAVING -3-

THE INDONESIAN FOF STATISTICS

 FLOW OF FUNDS is a data system which is designed to describe net lending and net borrowing among institutional sectors, and financial transaction activities using various financial instruments.

 Indonesian FOF is constructed in the form of matrix system.

 The column side represents institutional sectors, which divided into 2 columns: Financial Uses (assets) and Financial Sources (liabilities).

 The row side is divided into 2 rows, ie. above the line and below the line, which are separated by a row of the net lending/borrowing transaction.

  Above the line of FOF’s row constitutes Saving and Non-Financial Investment (Gross Fixed Capital Formation).

Below the line of investment.

FOF’s row comprises various instruments of financial  Indonesian FOF statistics has been compiled by Statistics Indonesia (BPS) coordinating with Bank Indonesia and Ministry of Finance.

 FOF data have been available annualy (8 sectors) since 1984, and quarterly (5 sectors) since 2000.

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BASIC FRAMEWORK OF INDONESIAN FOF

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COVERAGE OF INSTITUTIONAL SECTORS

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COVERAGE OF FINANCIAL INSTRUMENTS

… (1) -7-

COVERAGE OF FINANCIAL INSTRUMENTS

… (2) -8-

COVERAGE OF FINANCIAL INSTRUMENTS

… (3) -9-

FINANCIAL DATA COVERAGE: Australia FOF Accounts

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FINANCIAL DATA COVERAGE: US FOF Accounts

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FOF DATA COVERAGE: MFSM Based Financial Instruments

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DATA SOURCES AVAILABILITY

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COMPILATION PROCESS OF INDONESIAN FOF

DATA COLLECTION TABULATION CONSOLIDATION Source: BANK INDONESIA Source: STATISTICS INDONESIA Source: Ministry of Finance OTHERS B/S of Commercial and Rural Banks B/S of Central Bank B/S of Finance Companies Int’l Invest. Position Gross Fixed Capital Formation Household Saving & Investment Survey Private Enterprises Survey Government Income & Expenditure Capital Market PROCESSED BY MAIN FRAME SPECIFICATION OF INDONESIAN FOF PROCESSED MANUALLY CENTRAL BANK ACCOUNTS BANKS ACCOUNTS FIN.ACCT OF GOVERNMENT FIN.ACCT OF OTHER DOMESTICS REST OF THE WORLD ACCOUNTS RECONCILIATION B/S OF HOUSEHOLDS B/S OF PRIVATE INSTITUTIONS NON-FIN. ACCT OF GOVERNMENT INDONESIAN FLOW OF FUNDS -14-

*) Preliminary Figure

QUARTERLY INDONESIAN FOF, Q1 2011

*) -15 Trillion Rp

PAGE 1

ANNUALY INDONESIAN FOF, 2009

-16 Trillion Rp

PAGE 2

ANNUALY INDONESIAN FOF, 2009

-17 Trillion Rp

INDONESIAN FOF ANALYSIS, Q1 2011

*) Decrease in Deposit Facility Rp23,8 T Increase in SBI/SBIS of Banks Rp5,8 T Increase in Term Deposit Rp28,3 T Increase in Rupiah DD Rp15,5 T Increase in Forex DD Rp16,1 T Decrease in Currencies in Banks Rp9,5 T BANKS Gross Saving Rp21,5 T Non Fin. Inv Rp1,2 T Net Lending Rp20,3 T Increase in SBN of Banks Rp13,1 T Increase in DD owned by Reg-Govt Rp37,1 T Increase in Rupiah Loans Rp41,3 T Increase in Forex Loans Rp13,8 T Third Party Fund Withdrawal Rp42,5 T CENTRAL BANK Gross Saving -Rp5,8 T Non Fin. Inv -Rp38,3 M Net Borrowing Rp5,8 T Decrease in Curr. of Business & HH Rp15,8 T Increase in SBI of Business & HH Rp2,2 T BUSINESS & HOUSEHOLDS Goss Saving Rp449,2 T Non Fin. Inv Rp548,2 T Net Borrowing Rp99,0 T Increase in SBN of Business & HH Rp15,0 T GOVERNMENT Gross Saving Rp75,1 T Non Fin. Inv Rp9,0 T Net Lending Rp66,1 T Foreign loan to Business & HH Rp16,0 T Foreign Inv in Business & HH Rp23,2 T Selling stocks by Foreign Rp24,0 T Increase in SBI owned by Foreign Rp22,5 T REST OF THE WORLD Net lending Rp18,3 T Increase in SBN of Foregn Rp15,8 T Increase in Foreign Reserves $9,5 M (Position: $105,7 M ) *) Preliminary Figure Foreign loan repayment Rp4,9T Increase Central Govt DD (Rupiah: Rp20,0 T; Forex Rp34,2 T) -18-

THE NEEDS OF FURTHER IMPROVEMENT

1.

COVERAGE

Institutional Sectors

EXISTING INDONESIAN FOF STATISTICS

Based on SNA 1968 and Manual of Money and Banking 1986 2.

Financial Instruments Based on Money and Banking 1986 3.

Flows Concept 4.

Compilation Framework Changes of position Based on international best practices

FURTHER IMPROVEMENT

Based on SNA 2008 and MFSM 2000 (CG-MFS 2008) Based on MFSM 2000 (CG-MFS 2008) Flows of transaction, valuation, and OCVA Need for alignment with international commitment, such as G20 Data Gaps initiatives (Sectoral Acccounts)

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THE ORGANIZATION OF DATA MANAGEMENT Central Bank

        Monetary Statistics (Base & Broad Money) Financial Soundness Indicators (R2) Balance of Payments International Inv. Position (R12) Consol’d Portfolio Int’l Survey (R11) Indonesia Banking Statistics (R10) Int’l Transaction Report Payment System Statistics

Ministry of State Own Enterprises

   Government Finance (Budget) Statistics, National & Regional (R17) Government (Public) Debt Statistics Non Financial Institution Statistics   Capital Stocks (Non Financial Assets Position) Business Tendency Survey

Statistical Ofiice

      National Accounts (GDP) Inflation (CPI) Input-Output Table Social Accounting Matrix Export-Import Statistics Social & Demografic Statistics   Public Sector Debt (G18) Debt Securities      Institutional Sector Account (R15) (

Flow of Funds Statistics *

) Securities Data (R7) Real Estate Prices (R19) Principal Global Indicators (R20) Financial Soundness Indicators (R2)

Ministry of Finance

Remarks: *) The Indonesian FOF is part of country initiatives to accomplish G20 Recommendation of Data Gaps Stastitical Coordionation Line

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A WAY FORWARD

Some Efforts in Compiling Indonesian Sectoral Accounts

1. The compilation of Indonesian Sectoral Accounts will be initiated from the related data availability:

Flow of Funds and Capital Stocks.

2. BI will have coordination with Statistics Indonesia (BPS) to define sectors of the economy in Indonesia and classification of financial instruments & non-financial assets.

3. BI and BPS jointly formulate an appropriate approach to fill the data gaps between requested Sectoral Accounts and the available data in Indonesia.

4. The availability of technical assistance from international institute (IMF, BIS, WB or OECD) is necessary to speed up the progress of implementation.

5.

The implementation of Indonesian Sectoral Accounts will be aligned with country’s timeframe in implementing SNA 2008.

MAIN CHALLENGES

Among others;  The difficulty in integrating financial and non financial accounts  The problems in adequately covering the activities of household and nonfinancial corporations  Limitation balance sheet and sectoral data at present

A Way Forward Possibilities to Compile Sectoral Account – Financial Assets -22-

A Way Forward Possibilities to Compile Sectoral Account – Non Financial Assets -23-

CONCLUSION & REMARKS

       Indonesia has been experienced in compiling FOF Statistics and has provided FOF data annualy (8 sectors) since 1984, and quarterly (5 sectors) since 1993.

The compilation of FOF needs to be further improved to harmonize with current statistic manual (ie. SNA 2008, MFSM and CG-MFS 2008), and to be aligned with other international commitment, such as G20 Data Gaps Initiatives.

Regarding the complexity of FOF compilation, the improvement of FOF in Indonesia requires good coordination among authorized institutions, ie. Bank Indonesia, Statistics Indonesia, Ministry of Finance, and Capital Market & Financial Institution Supervisory Agency.

In the area of “data coverage”, the efforts would be mostly on collecting data from non-bank financial corporations, non financial corporations, and Households.

In the area of “conceptual framework”, Indonesia will initially observe the possibilities to compile FOF based on “true flows” of transaction, valuation, and OCVA.

The improvement of FOF statistics will be synchronized with the efforts in the implemention of SNA 2008, especially on constructing full sequence balance sheet.

Related to the G-20 Data Gap Initiatives, Indonesia is in considerable progress to provide G-20 data recommendation and will have a study on the compilation of Indonesia sectoral accounts.

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Thank you