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Government allocates education endowment fund to finance COVID-19 measures
The state budget now targets to secure Rp 1.76 quadrillion in revenues, lower than the Rp 2.23 quadrillion previously set in the 2020 budget.
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The government’s plan will not have much of an impact on scholarships from the endowment fund. (Shutterstock/File)
T
he government has set aside Rp 60 trillion (US$3.69 billion) from the endowment fund for education (LPDP), among other financial resources, to finance the nation’s battle against the COVID-19 outbreak.
Finance Minister Sri Mulyani Indrawati said on Tuesday that the government may use the endowment fund if needed, adding that it would also use accumulated cash surpluses (SAL) and funds from public service agencies (BLU) for non-debt financing.
“These three financing sources will use funds from government agencies. We are being extra careful,” Sri Mulyani told reporters over a teleconferenced briefing. “We will use the safest financing sources at a minimal cost.”
“We will also optimize the use of SAL to reduce financing from the market, as we also have cash in hand,” the minister said, adding that the three sources would reduce new government debt.
The state budget now targets to secure Rp 1.76 quadrillion in revenues, lower than the Rp 2.23 quadrillion previously set in the 2020 budget, according to newly enacted President Regulation (Perpres) No. 54/2020 on the 2020 state budget revision issued on April 3. Most of the revenue, around Rp 1 quadrillion, will be sourced from new debt issuances.
Read also: Indonesia announces Rp 405 trillion COVID-19 budget, anticipates 5% deficit in historic move
Expenditures have jumped to Rp 2.61 quadrillion from Rp 2.54 quadrillion previously targeted. Priorities include spending for health care, social safety nets and relief efforts for small and medium businesses battered by the COVID-19 outbreak.
Center of Reform on Economics (Core) Indonesia research director Piter Abdullah said that the government’s plan would not have much of an impact on scholarships from the endowment fund because not all of it will be spent.
“During this emergency situation, the fund will be used to finance fiscal stimuli to combat COVID-19,” Piter told The Jakarta Post. “But not all of it, so the scholarships will continue.”
