Entering 2026, the construction sector is projected to become more inclusive, with greater participation from MSME contractors, as the role of SOE contractors is limited to projects above IDR 100 billion and budget certainty is directed toward village infrastructure, housing, and sanitation.
Gapensi expects the tender system to shift from a lowest-price basis toward quality assessment, structural durability, green construction, and technology adoption such as Building Information Modeling (BIM), although technology adoption remains challenging for smaller contractors.
Key risks include predatory pricing, lump-sum contracts without escalation clauses, and volatility in material prices. Gapensi urges tender reforms, including stricter evaluation of bids below 80% of the owner’s estimate (HPS), and calls for SOE contractors to focus on high-risk projects while allocating fair work portions to regional contractors. With regulatory and tender system improvements, the construction sector is projected to grow by 5%–6% in 2026 with more balanced participation.
— Kontan, 14 December 2025
Perbanas: Impact of Bank Rate Cuts to Be Felt in Late 2025–Early 2026
The Indonesian Banks Association (Perbanas) expects the transmission of lower banking interest rates to be felt only in late 2025 to early 2026, due to a time lag of around two months in deposit and lending rate adjustments. Despite the BI rate declining to 4.75%, banks are waiting for deposit maturities and stronger credit demand.
Transmission has begun to emerge alongside lower funding costs, support from excess liquidity (SAL), reduced LPS guarantee rates, and strengthened macroprudential liquidity policy (KLM) incentives from Bank Indonesia effective December 2025. KLM incentives are provided upfront based on credit growth commitments to encourage loan growth beyond the 7.7% YoY level recorded in September 2025.
— Bisnis, 10 December 2025
New Export Proceeds (DHE) Regulation Effective 2026: Mandatory Placement in Himbara, Rupiah Conversion Capped at 50%
The government has revised Government Regulation (PP) No. 8/2025 and introduced new rules on natural resource export proceeds (DHE SDA), effective 1 January 2026. All foreign-currency DHE must be placed 100% in special accounts at state-owned banks (Himbara), while LPEI will no longer serve as a DHE placement institution.
The new regulation also lowers the maximum conversion of DHE into rupiah from 100% to 50% and expands permitted foreign-currency usage for procurement and working capital. Exporters may also place DHE in domestic foreign-currency government bonds (SBN valas), in line with plans to issue such instruments to absorb excess foreign exchange and deepen financial markets.
— CNBC Indonesia, 8 December 2025
Health Insurance Claim Ratios Exceed 50%, OJK Highlights Medical Inflation
The Financial Services Authority (OJK) reports that health insurance claim ratios as of October 2025 are elevated, reaching 69.86% in life insurance and 83.59% in general insurance, driven by medical cost inflation and increased utilization of healthcare services.
Despite this, premium income continues to grow strongly, with life insurance health premiums reaching IDR 28.63 trillion (+17.53% YoY) and general insurance premiums IDR 9.10 trillion (+17.24% YoY). OJK emphasizes that premium repricing is only permitted at policy renewal, in accordance with draft regulations strengthening the insurance ecosystem. As of October 2025, 77 out of 144 insurers continue to market health insurance products, reflecting sustained industry interest amid rising health risk awareness and improved governance.
— Bisnis, 13 December 2025
Government Targets Coal-to-DME Project Near PTBA Mines in Tanjung Enim
Deputy Minister of Investment and Downstreaming Todotua Pasaribu stated that coal downstreaming into dimethyl ether (DME) is projected to be located near PT Bukit Asam Tbk (PTBA) mining areas in Tanjung Enim, South Sumatra. The project aims to substitute imported LPG, given Indonesia’s LPG supply deficit of approximately 8.6 million metric tons per year.
In addition to DME, PTBA will also be involved in developing synthetic natural gas (SNG) from coal in collaboration with PGN and Pusri, to be used for industrial needs and ammonia feedstock. Throughout 2025, the SNG project remains at the feasibility study stage, covering production facilities, pipeline networks, and business models.
— Antara, 19 November 2025
Government Allocates US$7 Billion for Fishermen Village Program and Modernization of 2,557 Fishing Vessels
The government has prepared the Merah Putih Fishermen Village program and a fishing vessel modernization initiative involving the construction of 2,557 vessels, valued at approximately US$7 billion. Funding will come from UK external loans (US$3 billion) and the state budget and Danantara (US$4 billion), to be implemented in phases through 2029.
The initial phase includes the construction of 1,000 vessels of 30 GT during 2026–2028, followed by hundreds of vessels of various sizes and the development of four fisheries hubs. The program aims to replace traditional vessels with modern ones to improve fishermen productivity.
The domestic shipbuilding industry has expressed readiness to capture these opportunities but calls for government support in the form of incentives, restrictions on used-vessel imports, easier financing, and clearer spatial planning to enhance competitiveness and generate significant economic multiplier effects.
— Kontan, 11 December 2025
Energy Ministry Considers Redirecting LPG Subsidies to Support DME
The Ministry of Energy and Mineral Resources (ESDM) is considering reallocating part of the 3 kg LPG subsidy to support the use of dimethyl ether (DME) as a substitute fuel. The government is currently calculating the cost of goods sold (HPP) for DME to ensure competitive pricing, with subsidies potentially sourced from efficiency gains in existing LPG subsidies.
This policy aims to reduce dependence on imported LPG and promote coal downstreaming. BPI Danantara is finalizing feasibility studies for DME projects, which require government support to align DME prices with LPG. Under the proposed development structure, PTBA will handle production facilities, Danantara Investment Management will be involved upstream, and Pertamina is expected to distribute DME to the public.
— Kontan, 12 December 2025
Nickel Downstreaming Boosts Exports Tenfold Since Ore Export Ban
The Ministry of Energy and Mineral Resources reports that exports of nickel and its derivatives surged by 927%, from US$3.3 billion in 2017 to US$33.9 billion in 2024, following the 2020 ban on raw nickel ore exports. The government reaffirmed downstreaming as a key pillar of Indonesia’s economic transformation toward Indonesia Emas 2045.
Currently, there are 365 nickel mining licenses (IUP) and 170 smelters (79 operational, 74 under construction, and 17 in planning). Mineral downstreaming is projected to attract investments of up to US$618 billion and create 3 million jobs by 2040. The government emphasizes compliance with good mining practices, including emissions control and environmental restoration.
— Kontan, 8 December 2025
IDX Notes Strengthening ESG Trends in Indonesia’s Capital Market
The Indonesia Stock Exchange (IDX) reports continued strengthening of ESG trends in the domestic capital market, reflected in a sharp increase in assets under management (AUM) of ESG-based investment products from IDR 36 billion in 2015 to IDR 7.03 trillion as of September 2025. The number of ESG products has increased from one to 26, supported by 15 asset managers.
Issuer sustainability practices have also improved, as evidenced by an increase in the average S&P Global Corporate Sustainability Assessment (CSA) score from 28.5 to 31.5 points. As of June 2025, nearly 90% of listed companies have submitted sustainability reports, indicating greater transparency and commitment to ESG practices.
— Antara, 11 December 2025