Learning from the negative impact of government spending efficiency on economic growth, the Ministry of Finance has changed its approach to preparing the 2026 State Budget (APBN). Instead of cutting the budgets of ministries/agencies on a large scale, the government chose to maximize the momentum of the issuance of Government Securities (SBN) and the use of the National Socio-Economic Single Data (DTSEN) for the implementation of priority spending.
The change was conveyed by Director General of Financing and Risk Management Suminto and Budget Director for Economic Affairs Tri Budhianto to journalists participating in the Ministry of Finance's Media Gathering "Peel Through the 2026 State Budget" in Bogor, West Java, Friday (10/10/2025). Both shared a similar view that efficiency can be interpreted differently next year.
Suminto explained that, like taxes, debt is an instrument, not a goal. The government goes into debt not because it wants to, but because it needs financing to cover the state budget deficit set at Rp689.1 trillion or equivalent to 2.68% of GDP in 2026. This need is inseparable from the basic fiscal functions of allocation, distribution, and stabilization.
"There are still many development goals that we must achieve, with aspirations to become a more prosperous, more advanced country, having a higher income. So a large and sufficient cake is needed so that we can make allocations properly, measured, and carefully," said Suminto.
Currently, with a total central government debt of Rp9,138.05 trillion with a debt-to-GDP ratio of 39.86%, the government is quite free with a fairly low debt ratio compared to other countries. Of this amount, Rp1,157.17 trillion came from bilateral, multilateral, commercial, and domestic loans, while Rp7,980.87 trillion came from the issuance of SBN.
Suminto ensured that in terms of currency equivalence, Rp6,554.95 trillion or 71.73% of government debt is denominated in rupiah, so it is not affected by the recent exchange rate fluctuations. The rest, with a percentage of 28.27%, government debt worth IDR2,583.1 trillion is spread in US dollars, yen, euros, and others.
Healthy and manageable debt
With a healthy debt portfolio, Suminto explained some of the government's strategies to maximize financing, starting from managing the risk of SBNs that use floating rates and fix rates alternately, as well as suppressing debt in foreign currencies so that it is not too exposed to exchange rate movements.
In addition, the maturity profile of the debt is also considered. Debts with short tenors have lower interest rates, but large installments. On the other hand, debts with long tenors have higher interest rates but friendlier installments.
"So we are looking for debt with an optimal maturity period, between 7-8 years, which is not too short and not too long, so that it is always flexible and can be adjusted to the needs of the state budget, market developments, and cash position management," he explained.
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The SBN market is active, always liquid, and has ample space for movement, according to Suminto, which is a valuable momentum. The government uses this momentum to issue SBN at any time with a variety of tenors, while paying attention to the cash position that remains sufficient for proportional spending.
"Our approach is a strategy of collecting more, spending better, with sustainable, prudent, and creative financing, the three are an integrated series that will always be pursued efficiently, productively, and sustainably," said the first echelon.
Joining the virtual gathering session via Zoom teleconference, Minister of Finance Purbaya Yudhi Sadewa reiterated that government debt should not necessarily be measured in nominal terms, but also as a ratio to GDP. Indonesia's debt of nine thousand trillion, according to him, is still safe by international standards.
"Debt should not be used [to create] negative sentiment to our economy, because we are quite prudent. We will reduce it as much as possible. Even if the debt must be maximized, there should be no leaks that waste state money," said Purbaya.
Big spend must be right
In addition to ensuring that debt is managed in a healthy and maximum manner, the 2026 State Budget expenditure set at Rp3,842.7 trillion is ensured to target 8 priority agendas, including food security, energy security, free nutritious meals, education, health, village development, defense, and accelerated investment.
In order for the eight agendas to be carried out in an integrated manner, the 2026 State Budget expenditure is divided into 11 functions, with the largest expenditure allocated to economic expenditure of Rp823.7 trillion, public service expenditure of Rp794.4 trillion, and education expenditure of Rp459.7 trillion.
Of the total expenditure, the government determined that Rp1,377.9 trillion worth of expenditure would be the benefits received directly by the community through 18 programs, ranging from the Family Hope Program, Free Health Checks, school revitalization, MBG, to Fishermen's Villages and Aquaculture.
With a very wide range of programs that are prone to abuse, Budget Director for Economic Affairs Tri Budhianto emphasized that the use of DTSEN is very important, considering that the database already has a record of each recipient including name, address, and deciles that determine eligibility.
"The Ministry of Finance collects various data and we combine them with all programs so that they are right on target. We are not reducing subsidies, but reforming them. Again, efficiency is not cutting, but diverting the budget that does not touch the layers of society, to those that touch the community directly," said Tri.
Tri does not deny that the government's current programs are considered populist and short-term oriented. According to him, implementation problems need to be underlined, but that should not be an excuse to stir up unhealthy antipathy.
"If we want to be honest, those who feel the benefits of government programs are silent. If we pay attention, if the recipients convey their hearts, we will know that this program is actually good. This means that we need to keep this program running properly and achieve its goals," he said.
The strategy of utilizing the free debt ratio to issue SBN in a measured manner and utilizing DTSEN in APBN spending is a sign that the government has learned from experience so far. The inaccuracy of debt financing due to leakage and spending that is not on target is an important evaluation in moving forward.
Previously, Center of Reform on Economics (CORE) Indonesia researcher Yusuf Rendy Manilet had stated that the integration of single data is crucial to ensure the accuracy of state spending allocations. The validity of the recipient's identity can also be better guaranteed with the collaboration of the Ministry of Finance and the records of the Population and Civil Registry Office.
"Digitalization of the distribution system will play a big role in closing the leakage gap. The Presidential Instruction is an initial framework, but it needs to be followed up by utilizing a transparent and accountable digital platform to detect manipulation and streamline with other sectors," explained Rendy when contacted by SUAR, Monday (30/9/2025).
Agreeing with Rendy, Head of Macroeconomics and Market Research Permata Bank Faisal Rachman assessed that the realization of government spending, which is less than optimal even though it has entered the fourth quarter of this year, encourages next year's big target to be realized more efficiently.
"Expenditure realization will be efficient if it has a high multiplier effect for growth acceleration, such as goods and capital expenditures for logistics and infrastructure needs that can accelerate the implementation of MBG priority programs, food security, and energy," Faisal told SUAR, Monday (23/9/2025).
