Vietnamese legislators on Wednesday voted in support for a government's plan to issue US$3 billion worth of bonds in overseas markets from now to the end of next year to refinance existing loans.
More than 79 percent of the National Assembly approved the plan, which previously raised concerns among several lawmakers and economists. Some believed the massive issuance could threaten the country's debt sustainability.
The bonds will be issued with maturities of 10-30 years, according to the plan, which was proposed amid a huge budget deficit and low bond sales in the local market.
Legislators have also allowed the government issue another VND60 trillion ($2.63 billion) worth of bonds at home next year to fund public projects. Of these local bonds, 30 percent will be in short or medium terms of three to five years.
Earlier the government sought permission to diversify sovereign bonds, saying that local investors were not interested in long-term debts of more than five years.
Vietnam's public debt is expected to reach 61.3 percent of gross domestic product at the end of December, while foreign debt is set to hit at 41.5 percent.
The legislature on Wednesday capped next year's state budget deficit 4.95 percent of GDP, almost equal to this year's estimate of 5 percent. It also ordered the government to continue tightening public spending.
The government was also required to maintain strict financial discipline and improve the state budget's transparency.
The National Assembly allowed the government to spend up to 25 percent of the estimated proceeds of VND40 trillion ($1.75 billion) from selling its shares in state-owned enterprises to cover budget shortfalls, if necessary.
The rest must be assigned for public projects next year, it said.
Legislators also approved a state revenue target of VND1,014 trillion ($44.5 billion) next year, up 11.3 percent, and a spending target of VND1,273 trillion ($55.87 billion), also up 11 percent year.