Opportunities from the Jumbo MBG Budget and Regional Budget Challenges in 2026

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The following is important information related to the development of the business universe that needs attention today based on the curation of the SUAR Team.

The 2026 Free Nutritious Meal Budget Increases by 400%, Prospects for the Business World

In the 2026 Draft State Budget (APBN), the budget for the Free Nutritious Meal (MBG) program will increase to Rp 355 trillion, or skyrocket 400% compared to the 2025 budget of only Rp 71 trillion. This could be an opportunity and a challenge for the business world.
Free Nutritious Meals (MBG) in 2026 will reach 82.9 million people. With that many recipients, this program will spend around Rp 1.2 trillion every day. One nutritional fulfillment service unit (SPPG) will manage approximately Rp 10 billion per year, 85 percent of which is used to purchase raw materials. And 95 percent of these raw materials are agricultural products.

Of the total MBG budget, 85% is allocated for the procurement of kitchen ingredients, ranging from vegetables, livestock products, fisheries, to plantations. This is a great opportunity for 29 million umkm in the food sector, especially those in rural areas, to grow and develop.

Read more here.

Reduced Regional Transfer Budget, Local Governments Need to Be Creative and Innovative

The 2026 Draft State Budget (RAPBN) stipulates the allocation of regional transfer funds (TKD) of Rp 650 trillion. This figure is a significant decrease of Rp 214.1 trillion or 24.8% compared to the outlook of the 2025 APBN, which reached Rp 864.1 trillion.
The government's decision to cut the allocation of regional transfer funds (TKD) has reaped various reactions from various heads of government in the regions. They say that this has the potential to burden regional finances and hinder regional development. Meanwhile, various experts suggest that regional heads can be more creative in exploring new potential sources of local revenue (PAD) to cover the deficit due to reduced transfer funds from the central government to the regions.

Read more here.

Falling BI Rate Boosts Growth when Fed Rate Will Fall as well

The Board of Governors Meeting of Bank Indonesia (BI) on Wednesday (August 20, 2025) decided to lower the benchmark interest rate (BI Rate) by 25 basis points to 5.00%, the Deposit Facility interest rate to 4.25%, and the Lending Facility interest rate to 5.75%. This is the second consecutive time BI has lowered the BI Rate. Previously, at the July Board of Governors Meeting, BI also lowered the BI Rate by 25 bps. Throughout this year, BI has lowered interest rates four times with a total of 100 bps.

The Board of Governors made this decision for the needs of the domestic economy while considering global conditions. The inflation rate and the rupiah exchange rate are still within the target range. From an external aspect, various data indicate a tendency for the United States (US) central bank, The Federal Reserve (The Fed), to lower its benchmark interest rate.
The decrease in the BI Rate could encourage economic growth, one of which is from the reduction in bank lending rates. Banking actors will gradually adjust interest rates, both for deposits and more accommodative loans.

Read more here.

Boost the Tax Ratio so that Tax Revenue Can Skyrocket

The tax revenue target in the 2026 State Budget Bill (APBN) is IDR 2,357.7 trillion, or an increase of 13.5% compared to the outlook for tax revenue in 2025 of IDR 2,076.9 trillion. Creative and innovative efforts are needed to achieve this target, one of which is by increasing the proportion of tax revenue to gross domestic product (GDP) or tax ratio. OECD data states that Indonesia's tax ratio in 2023 was at the level of 12%.

Efforts that can be made include improving the tax database and optimizing levies. In addition, improving the system to encourage people to pay taxes obediently.

Read more here.

Increased Budget to Support Food Self-Sufficiency

The government is increasing the allocation of the food security budget in the 2026 RAPBN by 5.9% to IDR 164.41 trillion. This demonstrates the government's serious commitment to realizing food self-sufficiency, especially rice and corn.
Indonesia's agricultural sector faces challenges in the form of declining production and the number of farmers. Data from the Central Statistics Agency (BPS) shows that rice production, which had reached 54.9 million tons in 2022, fell to 53.1 million tons in 2024. The same thing happened to corn commodities. Production also decreased from 16.5 million tons in 2022 to 15.1 million tons in 2024. This trend indicates that Indonesia is still finding it difficult to maintain consistent production of food crops that are the mainstay of food security.

Read more here.

International Licensing Conference: This licensing business conference will be held on Thursday (August 21, 2025) at JIExpo, Jakarta. The conference will take the presentation theme, "Prospects and Trends of the Global Licensing Industry 2025". The speakers at the event will be Managing Director of Greater China & Southeast Asia Licensing International Tani Wong, Chairwoman of the Indonesia Licensing Association (ASENSI) Susanty Widjaya, and Vice President and General Manager of Disney Consumer Products South Asia Pacific The Walt Disney Company.

Road to G20 Summit: F20’s Call for Just Transition and Climate Justice: The Multi-stakeholder Dialogue in the context of the Road to G20 Summit carrying the theme F20’s Call for Just Transition and Climate Justice is organized by The Habibie Center supported by the Ford Foundation and the Ministry of Home Affairs of the Republic of Indonesia. This event is a strategic discussion forum organized by F20 (Foundations Platform) as part of a series of events leading up to the G20 Summit. This event aims to discuss important issues related to a just energy transition and climate justice by involving various stakeholders, including representatives from philanthropic organizations, government, the private sector, and civil society. This dialogue can be followed online via live broadcast on The Habibie Center's YouTube channel on August 21, 2025 at 12.00 WIB.

"The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, most of all, the durability of that advantage." (Warren Buffet - Entrepreneur)