TEMPO.CO, Jakarta - Deputy Coordinator of the Special Staff to the Governor of Jakarta, Yustinus Prastowo, stated that the plan to issue Rp3.5 trillion in regional bonds is not driven by the city's current cash position. "Jakarta isn't issuing bonds because it's short of cash," he wrote in an Instagram post on Saturday, July 25, 2026.
The Jakarta Provincial Government aims to issue the municipal bonds in June next year, coinciding with the 50th anniversary of Jakarta City. The plan was proposed under the General Policies of the Regional Budget and Priorities and Temporary Budget Ceilings (KUA-PPAS) for the 2027 Regional Budget.
Yustinus explained that the provincial government cannot rely solely on the Regional Revenue and Expenditure Budget (APBD) for development financing.
Furthermore, Yustinus noted that Jakarta's fiscal space is facing fresh pressures. He highlighted adjustments to the central-regional transfer mechanism, which carry implications for the Revenue Sharing Fund (DBH).
At the same time, he stated that regional spending demands continue to rise, particularly to improve public services.
Reflecting on these conditions, Yustinus argued that relying on a single financing instrument like the APBD would be inefficient for funding every development project. Therefore, the Jakarta administration is considering municipal bonds as an alternative financing option.
The Special Staff to the Minister of Finance for Strategic Communication emphasized that issuing bonds is not meant to cover consumptive deficits, but rather as a vehicle for funding long-term investment projects with intergenerational benefits. These include public transit infrastructure like the MRT, clean water networks, flood control systems, hospitals, schools, modern waste management facilities, and government digital transformation initiatives.
Yustinus stated that the bond issuance aligns with the modern financial doctrine known as the matching principle. Under this concept, he believes that the public who will benefit from infrastructure in the future will also share in its costs proportionally.
According to him, municipal bond financing enables accelerated development without compromising long-term fiscal sustainability. Moreover, as Jakarta will no longer be the nation's capital, its competitiveness will no longer depend solely on the APBD, but on high-quality infrastructure that can attract investment, create jobs, and raise living standards.
Yustinus stressed that bond proceeds must be funneled strictly into productive projects with measurable economic and social returns, backed by sound feasibility studies, transparent governance, and assured repayment capacity.
He reiterated that bonds are a development tool rather than a mechanism to fund routine operational expenditures. "To be clear, bonds are not a blank check; fiscal discipline remains a key requirement," he said.
Yustinus noted that relying on this financing model is standard practice in global hubs like New York, Tokyo, London, Paris, and Seoul.
He added that these major metropolises do not issue municipal bonds due to empty coffers, but because they recognize that modern urban development demands a balanced mix of revenue, assets, liquidity, and long-term financing.
Furthermore, backed by credible governance, he believes municipal bonds can be an instrument to broaden public and institutional investor participation in urban development. "In fact, failing to seize this opportunity would be unfair to the future," he said. Tempo had reached out to Yustinus for permission to quote his Instagram post for this story.
Read: Jakarta Eyes Rp3.5 Trillion Bond Issuance in June 2027
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