On October 16, 2025, the Standing Committee of Vietnam’s National Assembly convened under the direction of Vice Chairman Nguyen Duc Hai to debate a sweeping draft amendment to the Public Debt Management Law. The session marked a critical juncture in the nation’s ongoing efforts to modernize public finance, streamline administrative procedures, and empower local authorities—moves that, lawmakers hope, will unlock new resources for growth and development while keeping debt risks in check.
According to coverage from dbnd and Tap Chi Tai Chinh, the proposed changes are nothing short of substantial: the draft law seeks to amend or supplement 24 out of 63 articles—modifying 17, repealing provisions in 5, and introducing new regulations in another 5. The scope is broad, touching everything from the mechanics of ODA (official development assistance) and concessional loan management to the approval process for local government bonds and the delegation of debt-related powers within the government.
At the heart of the proposal is a push for greater decentralization. The draft law would grant the Prime Minister and the Ministry of Finance expanded authority over key debt management tasks, while simultaneously increasing the initiative and responsibility of local governments in budget decisions and usage. As Deputy Minister of Finance Tran Quoc Phuong explained in his presentation, these measures are designed to “enhance the autonomy and accountability of local authorities in deciding and using their budgets,” a shift that reflects Vietnam’s broader drive to streamline its bureaucracy and improve governance efficiency.
One of the most notable changes involves the process for local governments to issue bonds. The current requirement for Ministry of Finance approval on the terms and conditions of local government bonds—including volume, par value, currency, and maturity—would be scrapped. Instead, provincial People’s Committees would report directly to their respective People’s Councils for approval of bond issuance projects, ensuring that borrowing stays within limits already approved by the National Assembly. This, officials say, will reduce red tape and speed up local access to funding.
Another significant reform targets the procedures for accessing ODA and concessional loans. Under the draft law, ministries, provincial People’s Committees, state-owned enterprises holding 100% charter capital, and their subsidiaries would be able to propose loan projects directly to the Ministry of Finance for appraisal and submission to the Prime Minister. The information required in these proposals would be streamlined—focused on four core elements and, if available, the sponsoring agency’s letter of interest—cutting down the paperwork burden that has long frustrated project sponsors.
These changes are not just about efficiency. They also aim to harmonize Vietnam’s legal framework with international treaty obligations and address practical obstacles that have emerged during negotiations for foreign financing. The draft law proposes that all ODA and concessional loans of the government be issued to localities receiving central budget supplements, while those not receiving such supplements—as well as public service units and qualifying enterprises—would borrow back from these funds. For public service units, the law would expand eligibility for refinancing to those that can cover their own recurrent expenses and part of their investment costs, with a view to fostering greater responsibility in loan usage and repayment.
“The draft law is intended to create a stronger legal foundation for capital mobilization, resolve negotiation difficulties, and ensure that procedures are both simplified and transparent,” the Economic and Financial Committee’s standing members stated in their appraisal report, as cited by dbnd. The Committee largely endorsed the government’s decentralization proposals but urged that revisions focus on “urgent, large-scale obstacles” and that any provisions not yet fully assessed for impact be reserved for future, more comprehensive overhauls.
Transparency is a recurring theme throughout the draft. The law would assign the Prime Minister annual authority to approve loan limits and government guarantees, in connection with public borrowing and repayment plans, to streamline approvals and keep public debt within safe bounds. The Vice Chairman of the National Assembly, Nguyen Duc Hai, called for continued review to ensure the law’s amendments “meet the objectives set out—especially mobilizing resources to achieve the double-digit growth target for the next period and resolving difficulties in public debt mobilization and repayment.”
He didn’t stop there. Nguyen Duc Hai also pressed for rigorous evaluation of the effectiveness of commercial bank refinancing loans for public service units that do not bear credit risk, suggesting that this provision might be worth adding to the law. Furthermore, he emphasized the need for clear, singular responsibility in the process of government guarantee appraisal, stating that “each task should be assigned to only one agency to clarify accountability.”
Other provisions in the draft law seek to simplify Vietnam’s public financial management landscape. The requirement for provincial approval of local bond issuance projects is streamlined, as is the process for proposing and appraising ODA and concessional loan projects. The draft also proposes to eliminate the three-year public debt management program, remove the mechanism for borrowing from the state financial reserve fund, and transfer the inspection function entirely to the Government Inspectorate—measures intended to align the Public Debt Management Law with the revised State Budget Law and reduce overlapping responsibilities.
For certain public service entities—particularly scientific organizations and public universities—the government is considering waiving collateral requirements for refinancing, a move that dovetails with Resolution 57-NQ/TW from the Politburo encouraging support for these sectors. The Ministry of Finance would be tasked with issuing detailed guidance on this exemption, further reducing barriers to much-needed investment in research and education.
Throughout the day’s session, lawmakers returned repeatedly to the twin imperatives of decentralization and transparency. The Economic and Financial Committee stressed that while more local autonomy can drive efficiency and responsiveness, it must be paired with robust mechanisms for oversight and risk control. The Vice Chairman echoed these concerns, urging the government to “continue reviewing to ensure that decentralization and delegation go hand-in-hand with objectivity, transparency, and effective management of loan mobilization and usage.”
As the meeting drew to a close, Nguyen Duc Hai directed the government to collect further feedback from all relevant agencies and to work with the Economic and Financial Committee for a formal appraisal. The finalized draft will then be submitted to the National Assembly for consideration and decision—a process that, if successful, could mark a new chapter in Vietnam’s fiscal management and economic development story.
Vietnam’s lawmakers face a delicate balancing act: empowering local governments and streamlining procedures, while maintaining tight control over debt risks and ensuring that every dong borrowed is put to productive use. The debate over the Public Debt Management Law’s amendment is more than a bureaucratic exercise—it’s a test of the country’s ability to adapt its institutions to the demands of a fast-changing world.
With the National Assembly’s final decision still pending, the outcome of these reforms will be watched closely by policymakers, investors, and ordinary citizens alike, all keenly aware that the stakes for Vietnam’s economic future could hardly be higher.
