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Tag: Indonesia

  • Garuda Indonesia poised to trim losses with Idul Fitri traffic

    Garuda Indonesia poised to trim losses with Idul Fitri traffic

    After suffering US$89.49 million in losses during the first quarter of the year, PT Garuda Indonesia is poised to see a recovery in the second quarter, especially in the June and July months that encompass the Idul Fitri holiday.

    Garuda Indonesia president director Pahala N. Mansury said the second quarter offered good prospects and the Idul Fitri exodus would help improve the company’s accumulative performance in the first semester.

    In the first quarter of 2016, the state-owned flag carrier booked $74.48 million in profits, but still suffered $63.2 million, or around Rp 824 billion, in losses.

    “Even if the losses have yet to be covered, hopefully we can at least push the losses down,” he said after accepting an award from TripAdvisor as one of the top 10 best airlines in the world on Friday.

    He also denied accusations from Rizal Ramli about the company’s lavish spending and potential corruption in the purchase of an Airbus A350.

    “We don’t have an Airbus A350 and thus the statement is not true,” he said, adding that the company was currently focused on optimizing efficiency.

  • Philippines, Indonesia agree to open up banking

    Philippines, Indonesia agree to open up banking

    The Philippines and Indonesia are set to ink an agreement this weekend to open up the banking industry aimed at greater financial integration and economic development among members of the Association of Southeast Asian Nations (ASEAN).

    Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said a letter of intent (LOI) on the ASEAN Banking Integration Framework (ABIF) would be signed with Indonesia’s Financial Services Authority (OJK) in Jakarta over the weekend.

    “The LOI is in line with the ASEAN Banking Integration initiative,” he said.

    Under the ABIF timeline, each ASEAN-5 including Indonesia, Malaysia, Philippines, Singapore, and Thailand should conclude at least one bilateral agreement with another ASEAN-5 country by 2018.

    By 2020, ABIF targets the conclusion or near conclusion of at least one bilateral agreement for each of the 10 ASEAN members as part of the integration under the ASEAN Economic Community (AEC).

    The integrated system is defined under the ASEAN Financial Integration Framework (AIFF) that also covers the integration of the banking markets wherein qualified ASEAN banks (QABs).

    To achieve the consolidation of the 10 ASEAN markets into a single economic base with the launch of the AEC in 2015, the BSP chief said there is a need to have an integrated and well-functioning regional financial system.

    “It reflects the mutual interest of the BSP and OJK to begin discussions intended to culminate in a formal bilateral agreement on the entry of QABs between the Philippines and Indonesia,” the outgoing BSP chief said.

    The BSP signed the Declaration of Conclusion of Negotiations (DCN) with Bank Negara Malaysia and the LOI with the Bank of Thailand on the sidelines of the 3rd ASEAN Finance Ministers’ and Central Bank Governors’ joint meeting and related meetings in Mactan, Cebu last April 6.

    Tetangco signed the DCN on the entry of Qualified ASEAN Banks between the Philippines and Malaysia with Bank Negara Malaysia Governor Muhammad bin Ibrahim as well as the LOI with Bank of Thailand Governor Veerathai Santiprabhob.

    The agreement signed by the BSP and Bank Negara Malaysia reflects the specific conditions for QABs from each jurisdiction to enter the other in a manner that is consistent with global banking standards and meets host jurisdiction regulations.

    The ASEAN region has a great potential as savings rate reached 33 percent of gross domestic product (GDP) against the lower rate of 25 percent in other regions.

    For his part, BSP Deputy Governor Nestor Espenilla Jr. said several foreign banks have expressed interest in establishing its presence in the Philippines through several modes of entry.

    Aside from entering as a QAB or as a strategic partner, he said foreign banks could enter the country through Republic Act 10641 signed by former president Benigno Aquino III in July 2014.

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  • Google Settles Tax Matter with Indonesia

    Google Settles Tax Matter with Indonesia

    Alphabet’s Google has made an agreement with Indonesia for 2016 after a long-standing dispute over charges of insufficient annual payments to the government.

    The latest settlement figure has been estimated using a new method which will finally conclude to charges that the tech firm was avoiding the required tax payments in the country.

    The report also corresponds with information that a decision was expected very soon.

    Indonesia’s Finance Minister Sri Mulyani Indrawati said on Tuesday that they already have reached a deal with the group based on prior year but they cannot release the figure yet.

    Google has so far not provided any statement.

    It is a notable progress seeing that both parties have settled for just one collection year. The government had been going after the search giant for tax avoidance and failure to pay the required amount for the past five years.

    Indonesia is doing the same but is coming across complication with tracking the money flow in view of the fact that the revenue of Google’s Indonesian business is managed at its Asia Pacific headquarters located in Singapore.

    The search giant was expected to pay about $376 million in taxes for 2015 but only paid $391,000.

    Google had mentioned that the estimated size of Indonesia’s digital advertising market was at $300 million for the said year.

    If found to have failed with taking care of payments, the five years of back taxes will cost the company a fine of over $400 million for only the year 2015 which could put a slight pressure on Google’s swamp bank account.

    Indonesia is keen on increasing tax collection and is planning to make use of the newly loaded capital to reduce its budget shortage and add fund to their current infrastructure program in the country.

    Other governments around the world are searching as well so as to crack down on what they consider as business tax avoidance.

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    During the Ramadhan, Google Indonesia e-commerce consumer behavior presented data searches on areas associated with the celebration in the country rose up to 28 percent while spending added to 30 percent.

    The country’s e-commerce head Henry Prihatna said that fashion product had the biggest sales gaining 180 percent, home appliances with 100 percent high and cellular phones edged up 80 percent.

    On the other hand, Google’s shares closed its Monday session losing as much as 0.7 percent to $942.90 on the Nasdaq Composite Index as tech stocks declined nearly 75 percent with Apple, Microsoft and Alphabet falling almost 6.5 percent.

    The three companies make up for approximately 30 percent of the index’s weighting.

    However, some experts believed that investors do not have to worry as any decline is likely to be buying opportunity and that the market is overbought from a long-term point of view and estimations are extended.

    With regards to money flows, investors may think about merging the variation between rising and falling matter in the stock market or their preferred index with money flows so as to have a useful perspective.

  • Indonesia may lose 50,000 tourists because of Qatar crisis

    Indonesia may lose 50,000 tourists because of Qatar crisis

    The Indonesian government is predicting that the recent severing of ties between several Arab countries and Qatar would deal a blow to the archipelago’s tourism industry, with 50,000 expected tourists not showing up because of the crisis, a senior official said on Tuesday.

    That is the number of visitors Tourism Minister Arief Yahya said Qatar Airways, for the most part, would have brought to Indonesia this year.

    “Given that seven months are left in the year 2017, we estimate we will lose about 50,000 foreign tourists as a result of the boycott of Qatar,” Arief told reporters at the State Palace on Tuesday.

    In order to reduce the expected loss, Arief said his ministry would coordinate with the Transportation Ministry to transfer the license given to the Qatari airline to other airlines, such as Emirates and Etihad.

    “First of all, I will ask the Transportation Ministry to transfer the aircraft license given to Qatar Airways to other airlines. We have no option as they Qatar Airways could not fly their aircraft anyway,” Arief said.

    Qatar Airways said on its official website it had suspended all flights to Saudi Arabia.

    Saudi Arabia and several of its allies on Monday cut relations with Qatar, accusing it of supporting extremism.

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  • Tesla Model X electric cars to hit Indonesian roads

    Tesla Model X electric cars to hit Indonesian roads

    Indonesians can now purchase US-made Tesla Model X electronic luxury cars with price tags starting from US$200,000. Prestige Image Motorcars, the sole Tesla motor car distributor in Indonesia, began exhibiting one of the cars at its showroom in Pluit, North Jakarta, on Tuesday.

    Prestige president director Rudy Salim said his company started receiving orders for the car in June with deliveries, beginning in September.

    “Tesla cars have good prospects in the Indonesian market, considering they are not the most expensive among the super cars in the country,” Rudy said.

    Each Telsa cars is equipped with a battery that supports up to 350 kilometers of travel, much more than Indonesians generally needed, Rudy said.

    A director of the Association of Indonesian Automotive Manufacturers (Gaikindo), Jongkie Sugiarto, said that Tesla cars would have their own fans in Indonesia.

    However, he said, luxury cars belonged to a specific and limited market, which did not grow significantly.

    According to Gaikindo, the domestic sales of diesel and petrol cars in the first four months of the year increased by 5.71 percent to 373,407 from 352,072 in the same period of 2016.

    Tesla Inc. of the United States was quoted by Reuters as saying in April 2 that its first-quarter vehicle deliveries jumped by 69 percent to 25,000 vehicles compared to the same period last year.

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  • Vietnam, Indonesia have much faster internet speed than India

    Vietnam, Indonesia have much faster internet speed than India

    Ranked 89 globally, India’s average internet connection speed of 6.5 Mbps is slower than Vietnam and Indonesia, which are much faster, a report said on Friday.

    While Vietnam, ranked 58, had an average internet speed of 9.5 Mbps, Indonesia at rank 77 provided a speed of 7.2 Mbps, Global leader in content delivery network services Akamai Technologies’ “The State of the Internet Q1 2017 Connectivity” found.

    The report also said that India witnessed a 4 Mbps broadband adoption of 42 per cent in the first quarter of 2017 with a year-over-year change of 81 per cent.

    “Increases in connection speeds and broadband penetration have helped enable the internet to support levels of traffic that even just a few years ago would have been unimaginable,” David Belson, editor of the report, said in a statement.

    “One need only look to January’s US Presidential Inauguration, which broke traffic records for live coverage of a single news event delivered by Akamai, largely thanks to the combination of more viewers watching at increasingly higher levels of video quality,” Belson added.

    On a global level, the average connection speed was 7.2 Mbps – an increase of 15 per cent year-over-year – and average peak connection speed increased 28 per cent year-over-year to 44.6 Mbps in the first quarter of 2017.

    “While South Korea had the highest average connection speed globally at 28.6 Mbps in the first quarter, Singapore had the highest peak connection speed at 184.5 Mbps in the first quarter,” the report noted.

    The average mobile connection speeds ranged from a high of 26 Mbps in Britain to a low of 2.8 Mbps in Venezuela. Germany had the highest peak mobile connection speed at 200 Mbps in the first quarter.

  • Government to realize self-sufficiency in garlic in 2019

    Government to realize self-sufficiency in garlic in 2019

    The Agriculture Ministry has targeted to achieve self sufficiency in garlic in 2019, sooner than its previously set target of 2033, Agriculture Minister Amran Sulaiman stated here, Monday.

    Sulaiman noted after the delivery of the Supreme Audit Agency Report that the decision to advance the target was made following recent fluctuations in the prices of the commodity.

    “We are learning from the recent fluctuations in the prices of garlic. Earlier, we had planned to become self-sufficient in garlic in 2033. However, we would advance the target; god willing, it would be in 2019 or 2020. We are aiming to advance the target by 13 years,” he remarked.

    According to the minister, a total of 60 thousand hectares of land will be needed to realize the target.

    Currently, some 90 percent of the countries garlic demand is met through imports annually reaching some 500 thousand tons worth Rp20 trillion.

    “If we can have 60 thousand hectares of (garlic plantations), then we can save Rp20 trillion in foreign exchange while boosting the farmers income,” he added.

    Sulaiman noted that the ministry will maximize the existing land potential, including four million hectares of rain-fed land and 21 million hectares of former swamp areas.

    “We can cultivate (garlic) in these four million hectares of land, with three harvests a year. Farmers could earn Rp150 trillion-Rp200 trillion from this. Secondly, we have 21 million hectares of swap areas that we can use for farming along with building a sugar factory. If we can achieve this, then we can become the worlds largest food producers,” Sulaiman remarked.

    Data from the Central Bureau of Statistics showed that 22,630 tons of garlic was imported from China as of April, while 1,971 tons of the commodity was imported from India during the same period.

    Indonesia has recorded self-sufficiency in garlic production in the period between 1990 and 1998.

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  • 4.36 Percent Inflation Expected in 2017

    4.36 Percent Inflation Expected in 2017

    The Governor of Bank Indonesia Agus Martowardojo projects year-on-year inflation rate in 2017 of 4.36 percent, an increase compared to late 2016 of 3.02 percent, mostly attributable to pressure from administered prices.

    Agus said yesterday that the projection was based on the movement in the Customer Price Index (CPI) that was down in January to May 2017 and lower compared to January to April 2017.

    “At the meeting of the Board of Governor in April, the year end inflation rate is predicted at 4.63 percent (year on year/yoy). In May 2017, it will drop to 4.36 percent (yoy),” Agus said.

    Lower annual inflation forecast, according to Agus, was due to correction to inflation impacts of administered prices.

    Bank Indonesia views that inflation pressure from administered prices, particularly raise in electricity price for 900 VA category will not be as high as predicted before.

    Moreover, controls on food prices and other components in volatile foods category from January to May 2017 have convinced the central bank that inflation rate can be curbed.

    Inflation due to volatile foods as of May 2017 stood at 3.26 percent (yoy), whereas inflation contributed by administered prices hit 9.14 percent (yoy).

    “We will see the year-end inflation rate if the current forecast remains the same as has been targeted before,” he said.

    Bank Indonesia expect to set inflation target through out this year in the range of 4 percent plus or minus 1 percentage points. Inflation control is also the reason behind the central bank’s decision to hold the benchmark 7-Day Reverse Repo Rate at 4.75 percent for the eight consecutive time on May 18.

    Meanwhile, the government in the 2017 state budget (APBN) assume the inflation rate at four percent.

  • OJK to expand banking access to the Philippines

    OJK to expand banking access to the Philippines

    The Financial Services Authority (OJK) plans to expand banking access to the Philippines by signing a Letter of Intent (LoI) with the countrys central bank, Bangko Sentral ng Pilipinas (BSP).

    The cooperation will pave way for access to some Indonesian banks that already certified as “Qualified ASEAN Bank” (QAB), the authoritys Deputy Commissioner for Supervision, I Sukarela Batunanggar, said at a press conference in Jakarta on Friday.

    “Besides the positive trends in economy growth, the two countries also have similarities in the sectors of social and economy, mainly in their domestic credit ratios,” Batunanggar stated.

    Indonesia and the Philippines, he further remarked, also have great potential in terms of their population sizes.

    “The two countries still have more opportunities to continue flourishing,” he noted.

    The LoI that was scheduled to be signed on next Sunday is an initial measure for negotiating bilateral cooperation through the ASEAN Banking Integration Framework (ABIF).

    The framework, which is set by two main principles, including reciprocity and equality, is aimed at supporting the banks in expanding their business within the Southeast Asia region.

    In accordance with the framework, Batunanggar stated the authority has assessed several banks that seek to hold a QAB certification.

    Batunanggar hoped the negotiation between two countries could be completed soon, so it would enhance trade volumes between Indonesia and the Philippines.

    In 2016, the two countries trade volumes remained low, compared with other states.

    Indonesian exports to the Philippines reached less than 4 percent last year, while the imports were only about 1 percent.

    The authority had signed a similar LoI for bilateral financial cooperation with Bank of Thailand (BOT) in March last year.

    Another bilateral deal was implemented between the countrys financial authority and the Malaysian bank central in August last year.

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  • Indonesia May motorbike sales up 15.2% yoy

    Indonesia May motorbike sales up 15.2% yoy

    Motorcycle sales in Indonesia rose 15.2% in May from a year earlier, data from an industry association showed on Monday.

    These sales are also the highest growth rate since August 2014.

    Sales stood at 531,496 motorbikes in May, up from 461,506 sold in the year-ago period.

    It was also higher than the 388,045 bikes sold in April. Motorbikes are hugely popular in Southeast Asia’s biggest economy and their sales are a key indicator of consumption.

    Sales in May were led by Honda Motor , Yamaha Motor Co Ltd and Suzuki, data showed.

  • Bank Mandiri Lends Rp1.5tn to Indonesia Infrastructure

    Bank Mandiri Lends Rp1.5tn to Indonesia Infrastructure

    State-owned Bank Mandiri is lending Rp1.5 trillion to Indonesia Infrastructure Finance (IIF) to help the non-bank financial institution support the acceleration of infrastructure development in Indonesia.

    IIF president director Arisudono Soerono said the loan will used to finance several infrastructure projects that are commercially viable and feasible.

    Bank Mandiri also gives IIF a treasury line facility with US$50 million limit to hedge the company’s transactions using foreign currencies.

    The bilateral term loan is a non-revolving credit with that will mature in three year.

    Bank Mandiri’s government & institutional director Kartini Sally said this is the second time the bank provided lending to IIF. In 2015, Mandiri disbursed Rp1 trillion loan to help IIF fast-track the completion of infrastructure projects in Indonesia.

  • Government to establish electronic toll collection consortium

    Government to establish electronic toll collection consortium

    The Public Works and Public Housing Ministry (PUPR), in cooperation with Bank Indonesia, will establish an electronic toll collection (ETC) consortium to set up a non-cash payment system on toll roads, which is targeted to operate thoroughly in Oct 2017.

    The shareholders of the consortium will consist of various stakeholders from bank companies, toll road enterprises, and switching companies.

    The consortiums role is to manage electronic payment facilities and infrastructure on toll roads, such as system and procurement of “reader,” data synchronization, and proportional profit sharing.

    “It will also play a major role in the integration of the toll road segments as well as in improving the business model and technical aspects of electronics,” BI Governor Agus Martowardojo told the press here on Wednesday.

    The establishment of the consortium is in line with governments target to change every payment in the toll roads using non-cash or electronic mechanism.

    BI has set a target to manage non-cash payment system in 35 toll roads in Oct 2017. Currently, only 25 percent of total payments in 35 toll roads in Indonesia are using non-cash payment.

    “Hence, this consortium is one of the required institutional aspects to be established,” Martowardojo noted.

    In addition to the institutionalization, electronicfication of all toll roads will also change the business model of various participating companies on the highways.

    Among some changes is the business commission that the bank must pay to the operator for the non-cash payment application of 0.3 percent, which will be replaced by a merchant discount rate (MDR) system. MDR will be implemented after the ETC consortium is officially established.

    To add incentives for banks to integrate, BI will also allow banks to charge additional commissions to customers when charging an electronic money balance used to pay for toll services. Such fee will be regulated in the revision of Bank Indonesia regulation concerning electronic money.

    Technically, BI and the PUPR Ministry divide the four stages of non-cash electronication including the electronification stage of the entire toll road in October 2017, the integration of the toll road system, the integration of toll roads and the establishment of the Electronic Toll Collection Consortium (ETC) as well as the implementation of Multi Lane Free Flow (MLFF), as a process of payment of tolls which not require the drivers to take a long stop.

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  • Indonesia Eyeing Export Opportunities to Afghanistan

    Indonesia Eyeing Export Opportunities to Afghanistan

    Afghanistan has expressed interest to import Indonesian products. Indonesia and Afghanistan have already establish trade relations covering finished products albeit at a relatively small amount. Industry Minister Airlangga Hartarto said that the government has welcomed Afghanistan’s import proposal. The export will primarily include consumer goods.

    “Afghan President has come here, and now they said that they are interested in importing some commodities from Indonesia. Indonesia and Afghanistan trade volume is not quite significant yet,” Airlangga said yesterday after meeting Afghanistan Ambassador to Indonesia Roya Rahmani in Jakarta.

    Airlangga said that Afghanistan is one of Indonesia’s industrial product export destinations as the country imports almost 90 percent of its daily needs. Some products, according to Airlangga, have the potential to be exported to Afghanistan, such as textile, pharmaceutical, construction products, and food and beverages. Indonesian business delegates will be departing for Afghanistan in the near future.

    Data from the Industry Ministry show that electronics and its appliances make up the most of Indonesia’s industrial product exports to Afghanistan, reaching US$ 3.54 million last year.

    Other products with high export value are pharmaceutical, household products, cosmetics, mirror, tea and coffee, vegetable oil, rubber and chemicals. In 2016, Indonesia’s export to Afghanistan is valued at US$16.22 million.

    In the same period, imports from Afghanistan amounted to US$ 31.1 million, meaning that Indonesia posted a US$ 16.19 million surplus. Indonesia imported some commodities from the country such as processed fruit, electronics and steel products.

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  • Garuda Indonesia soars above challenges, gears up for growth

    Garuda Indonesia soars above challenges, gears up for growth

    Ready to face their business growth that is riddled with challenges, Garuda Indonesia is optimistic that both its operational and financial performances will experience sustainable and positive growth in the next two years. This will be attributed to their business strategy, which is to focus on financial performance transition.

    Antara News quoted Garuda Indonesia President Director, Pahala N Mansury, saying that the airline would focus on performance improvement by taking 10 financial and business performance initiatives in a manner that would improve both operational and financial conditions.

    The 10 financial performance strategy initiatives are optimising usage of their fleet, lowering fleet cost, improving service related to departure and arrival time as well as reforming the service user income management services. “We are quite optimistic about achieving it in one or two years time,” he said.

    Pahala said the company is currently in a good position in term of operation and services to the public. However, the main challenge the company is facing is to find ways to improve its financial performance in a sustainable way to ensure business continuity.

    “We have identified that the phase of the business cycle that the group is undergoing is temporary. Infrastructure, human resources and products, and all business lines have a good platform to support the performance improvement,” Pahala said.

    He also lauded all sides for their input and attention into improving the group’s performance and business dynamics.

    Meanwhile, state shipping company PT Pelayaran Indonesia (Pelni) has paired up with Patra Jaya, a subsidiary of state-owned energy firm PT Pertamina, to introduce a cruise ship to boost the tourism industry.

    PT Pelni Kupang brand Head Adrian on Sunday said a memorandum of understanding was signed between the two parties, where the MoU entails the construction of a cruise ship to support the nation’s tourism industry in 10 tourists destination.

    The ten tourists destinations include Labuan Bajo and Riung, East Nusa Tenggara. The ship is currently being built in South Korea and is expected to be completed and sailing by 2018.

    Both Pelni and Pertamina had initially planned to purchase a cruise ship but the plan was halted following a regulation banning government agencies to purchase second-hand goods from abroad.

    Pelni currently operates both passenger and transport ships.

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  • BI launches food price information center

    BI launches food price information center

    The central bank of Indonesia, Bank Indonesia (BI), has launched a Strategic Food Price Center website (PIHPS) application which will serve as a reference of pricing information to help those in charge of making policy on inflation management.

    BIs Governor Agus Martowardojo said, at the PIHPS launch here on Monday, that data collection was one of important factor in controlling price to manage inflation.

    “The success of inflation policy application requires not only information but also supporting data. We follow the presidents directive, stated on April 11, 2016, to develop food information system center,” Agus stated.

    He explained that at an early stage, PIHPS will focus on 10 food commodities that contribute more than 50 percent to inflation of the volatile foods category.

    Referring to PIHPSs website at www.hargapangan.id site, the 10 strategic food commodities are rice, beef, chicken, chicken egg, red chili, cayenne pepper, onion, garlic, cooking oil, and sugar.

    Controlling the prices of these 10 food commodities has become the foundation of BI and the government to control inflation of volatile foods.

    Data presented by PIHPS is compiled from 164 traditional markets from 34 provinces. The data collected from 9.00 to 11.00 Jakarta time will be validated by BI at 10.00 to 12.00 and then published at 13.00 Jakarta time.

    PIHPS can be accessed at www.hargapangan.id or by downloading PIHPS National at android and Apple iOS operating system for free.

    In future, the Central Bank will develop the application by extending data coverage that includes modern markets, wholesalers, and producers, Agus remarked.

    “In 2018, we will collect data at the producer level for the 10 commodities, and we will also develop the site, hoping that wider access to food information will gradually lower the price fluctuations,” Agus revealed.

    Through PIHPS, the Central Bank wants to keep the inflation at 3-5 percent this year by paying particular attention to volatile foods, considering that its pressure from administered prices will be high following the energy subsidy adjustment policy that is applied this year.

    BI and the government want to keep volatile foods inflation in the range of 4-5 percent year on year from this year.

    The government has listed an overall inflation assumption of 4 percent in the 2017 State Budget.

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