(Mr. Phung Xuan Minh, Chairman of the Board of Directors of Phat Thinh Group & Saigon Ratings).
The bond issuance mechanism will be most meaningful when the mobilized capital is linked to infrastructure assets capable of generating long-term socio-economic value. For Ho Chi Minh City, a developed municipal bond market can help bridge the gap between long-term savings in the economy and the city’s long-term capital needs. This is particularly important for three groups of projects.
Firstly, there is the issue of transportation infrastructure and urban rail. Resolution 09 sets a target of completing approximately 200 km of urban rail by 2030. Urban rail not only solves traffic problems but also has the potential to restructure urban space through the TOD (Transit-Oriented Development) model. The Law on Urban Development also provides a basis for urban development oriented towards public transport, using railway connection points as centers for the concentration of residents, commerce, services, and offices.
Secondly, there is the logistics infrastructure, seaports, and free trade zones. The law creates a foundation for the development of free trade zones, integrated logistics zones, high-tech zones, and new economic models, thereby creating an interconnected ecosystem between production, trade, logistics, and financial services in Ho Chi Minh City.
Thirdly, there is green infrastructure, digital infrastructure, and smart cities. A city aiming for double-digit growth while simultaneously pursuing sustainable development will require significant investment in public transportation, clean water, wastewater treatment, energy, digital infrastructure, flood control, and climate change adaptation.
In these cases, raising capital through the bond market has a fundamental advantage: the cost of infrastructure assets can be spread over time, more in line with the period during which people and businesses benefit from those assets. However, this is also where a clear distinction needs to be made between “capital mobilization” and “effective investment.” If bond capital is channeled into projects with high investment costs, long timelines, low revenue generation potential, or disproportionate socio-economic benefits, the debt repayment obligation will persist for many years afterward.
HO CHI MINH CITY INTERNATIONAL FINANCIAL CENTER: FROM TRANSACTION LOCATION TO CAPITAL MOBILIZATION INFRASTRUCTURE
The fact that the Urban Development Law places the bond issuance mechanism in direct connection with the International Financial Center is a very noteworthy point.
According to Resolution 222/2025/QH15 of the 15th National Assembly, the International Financial Center in Vietnam is a unified system located in Ho Chi Minh City and Da Nang, with a product development orientation tailored to the strengths of each location. The goal is to form a financial ecosystem capable of connecting with international financial centers and markets, promoting investment flows into Vietnam.
Government Decree 323/2025/ND-CP further defines the International Financial Center as a unified legal entity operating in two locations, with Ho Chi Minh City being oriented towards developing a comprehensive financial ecosystem encompassing capital mobilization, investment, payments, issuance and trading of financial products, asset management, fintech, and green finance.
The Urban Development Law further expands this connection. The authority to regulate the conditions, procedures, and processes for licensing the establishment of banks with investment banking activities and the issuance of international financial products at the Center is assigned to the City People’s Council, based on the opinions of the Ministry of Finance and the State Bank of Vietnam. Members of the Center are also provided with financial services and support services to domestic organizations to facilitate transactions and attract international capital, while complying with the Government’s requirements on foreign exchange, anti-money laundering, and public debt management.
This opens up a broader perspective on the role of VIFC-HCMC. A successful international financial center should not be measured solely by the number of banks, fund management companies, or financial institutions that have offices there. A greater value lies in the center’s ability to act as a financial intermediary infrastructure connecting Vietnam’s capital needs with domestic and international funding sources.
Within that structure, Ho Chi Minh City’s capital needs for urban infrastructure represent a potential source of “investment assets.” If the city can develop projects with transparent financial records, clear legal frameworks, and reliable debt repayment capabilities, VIFC-HCMC can play a connecting role between these projects and investment banks, asset managers, investment funds, and other financial institutions.
Opportunities to raise capital must go hand in hand with fiscal discipline and risk management.
From the perspective of an independent credit rating agency, Saigon Ratings believes that expanding the borrowing and bond-issuing authority of a municipal government always has two sides. On the one hand, it contributes to improving the city’s ability to raise capital, preventing it from delaying strategically important infrastructure projects simply because the budget at a given time is insufficient. On the other hand, as debt increases, so does the responsibility to ensure full and timely repayment of future debt obligations.
Therefore, the next phase requires not only guidance on “how to issue” but also a robust risk management system. From a credit analysis perspective, at least seven issues need special attention:
Debt repayment capacity: Principal and interest obligations must be considered in relation to stable budget revenue, project cash flow, and the city’s essential expenditure obligations. Maturity structure: The term of the capital source needs to be compatible with the lifecycle of the invested asset, limiting the pressure of concentrated maturity in a few years. Interest rate and exchange rate risk: If raising funds from foreign institutions or issuing products related to foreign currency, the city needs a mechanism to manage exchange rate fluctuations and capital costs. Project quality: Debt-financed projects must have a clear economic and financial profile, a reasonable total investment, and an effective monitoring mechanism.
Simultaneously, contingent liabilities: PPP projects, guarantees, support commitments, or obligations arising from related enterprises/public sectors need to be fully monitored, rather than just looking at direct debt. Transparency and information disclosure: investors need to be regularly provided with information on budgets, debt, repayment obligations, project progress, and capital utilization.
FROM “AUTHORITY TO ISSUE BONDS” TO “RAISING CAPITAL AT A REASONABLE COST”
The Urban Development Law opens up a broader institutional space for Ho Chi Minh City, but its true value will only be tested during the implementation process. For the bond market, the most important factor is not the number of financial instruments allowed to be issued, but the credit quality behind each debt instrument.
Two bonds with the same maturity do not necessarily have the same interest rate. Investors will determine the value based on the issuer’s ability to repay debt, the quality of the financed assets, the level of transparency, the legal framework, project risk, market liquidity, and the economic and fiscal outlook of the City. With an economy of approximately US$123 billion, contributing about 23.5% of the national GDP and more than one-third of the total national budget revenue according to figures released at the Ho Chi Minh City Party Congress in 2025, the City possesses a significant economic and fiscal foundation for developing an urban capital market.
Simultaneously, the target of 10-11% annual GRDP growth by 2030, social investment equivalent to 35-40% of GRDP, and large-scale infrastructure projects indicate that the city’s medium- and long-term capital needs will continue to increase significantly. In this context, the Urban Development Law could create a crucial shift: from a “capital allocation” mindset to a “mobilization and effective management of medium- and long-term investment capital” mindset.
But this transformation also demands significantly higher capabilities. Ho Chi Minh City will need to establish a modern debt management system; build a reliable yield curve and issuance history; standardize information disclosure; improve project governance quality; and develop long-term relationships with institutional investors.
In particular, with the parallel development of the Vietnam International Financial Center in Ho Chi Minh City, the city has the opportunity to gradually integrate urban capital mobilization needs into a financial ecosystem of higher scale and standards. This could be the intersection of three major strategies: the Ho Chi Minh City development strategy – the infrastructure development strategy – and the strategy for building the Vietnam International Financial Center.
Saigon Ratings. [09:30-AM, August 27, 2026]
