Economy
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Indonesia's Finance Ministry outlines regulatory overhaul and priority spending push

Indonesia's Finance Ministry outlined plans on October 14, 2025, to simplify business rules and licensing while preparing a team to address slow spending on President Prabowo Subianto's flagship programs.

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Reviewing programs and redirecting spending

At the October press conference, Febrio Kacaribu, the ministry's director general for economic and fiscal strategy, said the government was drafting a Presidential Regulation for the Priority Program Acceleration Team. Coordinating Minister for Economic Affairs Airlangga Hartarto and Finance Minister Purbaya Yudhi Sadewa were to lead the team, with the Ministry of Investment and Downstreaming also participating.

Its task would be to examine delayed flagship programs, especially those that had spent little of their budgets, and assess their contribution to national development. The aim was to improve the execution of spending on the president's priorities.

Purbaya had described two possible responses to those reviews in comments reported by CNBC Indonesia in September 2025: transfer a lagging program's budget to another program, or speed up its spending if it remained a presidential priority.

As another measure to accelerate state spending, Purbaya placed Rp200 trillion in government funds previously held at Bank Indonesia into five domestic banks. Under Finance Ministerial Decree (KMK) No. 276 of 2025, BRI, BNI and Mandiri received Rp55 trillion each, while BTN received Rp25 trillion and BSI received Rp10 trillion, CNBC Indonesia reported.

Licensing deadlines and fewer business barriers

The team's remit also covered deregulation. In September 2025, Airlangga said it would help advance Government Regulation (PP) No. 28 of 2025 on Risk-Based Business Licensing, according to CNBC Indonesia.

Kacaribu said removing regulatory bottlenecks would give businesses more certainty. Among the measures being promoted was the "silence is consent" approach to licensing, which requires officials to answer permit applications within a specified period so applicants have clarity about their status.

Other changes included clearer requirements for products' domestic component level, known as TKDN, and looser restrictions on industrial raw-material imports. Kacaribu said the Finance Ministry and tax and customs authorities would continue consulting businesses to identify other rules obstructing development.

Changes to fertilizer distribution and prices

Kacaribu cited fertilizer distribution as an example of deregulation already affecting agriculture. He said the government had removed 145 regulations earlier in 2025, making fertilizer easier and quicker for farmers to obtain. He identified January 1, 2025, as the starting date for direct purchases and immediate use, and said the policy was expected to support national grain production and Prabowo's agricultural goals.

In a later account carried by ANTARA News, Deputy Coordinating Minister for Food Affairs Hanif Faisol Nurofiq said those 145 regulations had been consolidated into three. The simplified distribution route ran from the Agriculture Ministry through state-owned producer Pupuk Indonesia and then directly to farmers. Presidential Regulation (Perpres) No. 113 of 2025 established the change by amending Perpres No. 6 of 2025 on Subsidized Fertilizer Governance.

Hanif also said a 20 percent reduction in subsidized fertilizer's maximum retail price, or HET, took effect on October 22, 2025. It applied to urea, NPK, NPK for cocoa, ZA and organic fertilizer, with prices previously around Rp2,000 per kilogram.

In January 2026, Prabowo said the distribution reform had replaced a requirement for 13 signatures with a single instruction. Farmers could then receive fertilizer directly using only their identification, he said.

Prabowo also reported a 700,000-ton increase in subsidized fertilizer distribution volume alongside a reduction of up to 20 percent in the highest retail price. The Cabinet Secretariat separately described a 700,000-ton increase in the subsidized fertilizer allocation.

Subsequent reports on farm output and incomes

Prabowo said in January 2026 that the Farmer's Exchange Rate had climbed from 106 in September 2022 to 125 in December 2025. He described the December level as the highest in Indonesia's history.

In an October 2026 statement, the Cabinet Secretariat reported that national rice production had reached 34.69 million tons in 2025. It said Indonesia had achieved rice self-sufficiency ahead of the four-year target.

#Bank Indonesia#State-Owned Enterprises#Prabowo Subianto
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