AGP Executive Report

Disaster Finance: Indonesia keeps a Rp5 trillion disaster-management liquid fund ready, with Finance Minister Purbaya Yudhi Sadewa saying extra money can be added quickly if BNPB requests it, while BNPB also has about Rp500 billion on standby for emergencies. Jakarta Economy: Jakarta Governor Pramono Anung said the capital’s economy stayed resilient, growing 5.52% in Q2 2026 and contributing 16.32% to national GDP, with inflation held at 2.5%. Banking & Payments: Bank Indonesia extended a domestic credit card payment system (KKI) for individuals, challenging Visa and Mastercard’s dominance in Indonesia. Banking Leadership: DBS announced Sebastian Paredes will retire as Hong Kong CEO in March 2027, with Ng Sier Han to succeed him. AI & Work: Transform Talent 2026 highlighted that workforce change in Indonesia depends less on tools and more on inclusion, fair flexibility, and using AI to boost employees’ best work. Corporate Restructuring: Modernland Realty is seeking a second restructuring of a US$274.5m bond, proposing maturity extensions and a switch toward perpetual securities. Food & Supply Chain Investment: JBS and Indonesia’s sovereign wealth fund arm Danantara will form a meat-processing JV, with DIM committing US$2.5bn for a 25% stake and potential additional debt financing. Trade & Compliance: EU’s Packaging and Packaging Waste Regulation starts applying, raising compliance pressure for ASEAN food exporters including Indonesia. Regional Business: Cambodia’s ASEAN trade rose 20.7% in Jan–Jul 2026, with Indonesia among its top partners.

Commodity Governance: President Prabowo says a new state export firm will monitor key commodity shipments (palm oil, coal, ferroalloys) to curb under-invoicing, citing $5bn in potential export-proceeds gaps and reporting it has overseen $14bn in exports across 6,500+ monitored transactions in its first two months. Trade Enforcement: A White House report flags a “Great Transshipment Scam,” placing Indonesia among countries with significant integration with China and warning the US will target tariff-dodging via third territories and false origin claims. Minerals & Markets: Indonesia’s 2026 nickel ore output cap (about 250–260mn tonnes) is reshaping the 2026 outlook, with analysts warning of a possible feedstock squeeze for expanding smelters even as refined inventories remain high. Disaster Response: Indonesia declared a 14-day emergency response after a deadly 7.7 quake on Flores, with PLN restoring power and thousands awaiting aid as rescue efforts continue. EV Retail Expansion: VinFast and Indonesia’s Gowa Motor Group sign an MoU to build VinFast’s dealership network, targeting at least 30 showrooms and service centres. Health Supply Risk: Philippines procurement of TB drugs faces an indefinite freeze amid allegations of corruption and FX-related supplier pullouts, worsening an existing drug shortage. Digital Tax Compliance: The Philippines’ e-invoicing rollout nears (Dec 31, 2026), but many businesses still lack clear guidance on structured invoice generation and compliance steps.

Rail Fares Cut: KCIC is selling Whoosh tickets from Rp8,800 for the Jakarta–Karawang route during the Aug. 7–17 Independence Day holiday, with limited daily flash sales and Traveloka coupons. Disaster Response: Indonesia declared a 14-day emergency response in East Nusa Tenggara after the 7.7 quake on Flores, with thousands evacuated, hundreds of homes damaged, and fuel/LPG restoration underway. Energy Security: Pertamina Patra Niaga is gradually reopening Flores gas stations (32 of 52 operating) and restoring fuel distribution while monitoring damaged sites. Aerospace for Healthcare: BRIN is refining the N219 and amphibious N219A ecosystem for Prabowo’s flying ambulance plan, alongside long-endurance drone development for remote missions. EV Materials Push: BRIN is developing artificial graphite from coal waste for lithium-ion batteries to support Indonesia’s EV ecosystem. Trade & Compliance: Indonesia’s OJK is preparing rules for the Strategic Mineral and Commodity Exchange (BMKS), targeting operations on Jan. 1, 2027. MSME Export Drive: Bangka Belitung’s Muntok white pepper push targets 1,200 restaurants in 63 countries via the SAPA UMKM platform. Regional Policy Tension: The US flagged Singapore and other hubs as potential routes for “Great Transshipment Scam” goods, prompting Singapore’s trade ministry to stress strict origin declarations. Fraud Crackdown: India’s DRI dismantled an areca nut network misdeclaring Southeast Asian origin as Bangladesh to claim SAFTA duty benefits, with potential losses above Rs 2,500 crore. Independence Day Commerce: Jakarta’s Monas will host Pesta Rakyat with 1,200 MSMEs and free food packages for an expected 600,000 visitors.

Earthquake Response: A 7.7-magnitude quake off Flores island has killed at least 47 people, with rescuers still searching for survivors amid damaged homes, schools and health facilities; a tsunami warning was lifted and aid is being rushed to temporary shelters. Energy Transition: President Prabowo says Indonesia will add 30 GW of solar capacity and phase out 13 GW of diesel-fired power in 2026, aiming to cut fuel imports and improve electricity access for remote areas. Indonesia Budget Watch: The 2027 Draft State Budget targets 6% growth and 2.5% inflation, with the rupiah pegged at 17,500 per US dollar and a 2.4% deficit plan, as Finance Minister Purbaya flags continued global uncertainty. Investment & Finance Hub: Indonesia is moving ahead with plans for an Indonesia Financial and Investment Center, with Jakarta and Bali set to host IIFC-branded estates first, focused on investment, fintech, and dispute resolution. Trade & Commodities: Indonesia exported 8.2 tons of Muntok white pepper to the Netherlands, showing how MSME clusters are being plugged into international supply chains via major ports. Digital Payments/Policy: BRICS is discussing linking instant payments and digital currencies to lower cross-border transaction costs, with India pushing the agenda as chair. Tech Regulation: Google is rolling out stricter Android sideloading rules in Indonesia and other markets, requiring developer verification to curb scam-prone apps.

Indonesia Quake Response: A 7.7-magnitude earthquake off Flores has killed at least 38 people, injured dozens, and triggered mass evacuations as a tsunami warning was later lifted; rescuers face landslides and damaged roads while PLN and Pertamina restore power and fuel distribution in East Nusa Tenggara. Minerals Market Rules: Indonesia is pushing to finish regulations for its planned Mineral and Strategic Commodities Exchange in 2026, aiming to start operations on Jan 1, 2027, with the exchange set to publish domestic reference prices and reduce reliance on overseas benchmarks. Budget & Growth Targets: President Prabowo’s 2027 draft budget targets 5.8–6% growth with a 2.40% deficit, alongside higher spending for MSMEs, village cooperatives, food security and the free nutritious meals program; a Shadow Cabinet group says the assumptions are overly optimistic. SOE Governance Push: The government says Prabowo’s talk of possible amnesty for state-owned enterprise executives is meant to spur governance reform, not to open an amnesty process yet. Trade Compliance Watch: Singapore’s MTI says firms transshipping through the country must accurately declare origin after a US report flagged tariff-evasion risks, while Malaysia’s PKFZ rejected claims that Chinese-linked cargo presence alone proves fraud. Tourism Demand: Indonesia targets more Australian visitors beyond Bali and Jakarta under its “Go Beyond Ordinary” campaign, aiming for 2.23 million Australian arrivals in 2026.

Minerals & Markets: President Prabowo said Indonesia will set up a Strategic Mineral and Commodities Exchange by early 2027, aiming to bring producers, farmers, exporters, buyers and investors onto a single, tightly regulated trading platform as a next step after the single-gate export policy. Budget & Growth: Indonesia proposed Rp4.09 quadrillion for 2027, targeting 6.0% growth and a 2.40% GDP deficit, with priorities including food sovereignty, energy/water self-sufficiency, education, health, downstreaming and industrialisation. AI Strategy: Indonesia outlined a “full-stack” AI development plan in Yogyakarta built on five layers—energy, infrastructure, chips, talent and applications—so the country can contribute beyond software adoption. Energy & Renewables: Global data showed solar overtook wind in electricity generation for the first time in 2025, with renewables supplying about one-third of world power. Subsea LNG: Bidders are competing for major subsea packages for Inpex’s Abadi LNG project, with tenders under way ahead of a mid-2027 final investment decision. Regional Security: China and Indonesia completed a naval exercise east of Taiwan, drawing renewed US and Taiwan attention. Trade Risks: A US report alleges a “shadow transshipment network” helping China evade tariffs, flagging multiple countries including Indonesia. Data Center Cooling: Malaysia is developing palm oil-based immersion cooling fluid to cut water and energy use in data centers.

Budget & Growth Outlook: Indonesia’s President Prabowo told parliament he’s targeting a 2.4% of GDP fiscal deficit for 2027 (down from 2.85% expected in 2026) while aiming for 6% growth, alongside “food and energy self-sufficiency,” domestic industry building, and education—moves that helped lift bonds and stocks after his speech. State Firms & Downstreaming: He also flagged a big jump in SOE dividends—up 67% to Rp142.3 trillion in 2025—crediting governance reforms, as part of funding for a downstreaming push. US Trade Pressure: Indonesia faces a US 10% reciprocal tariff on its goods under a Section 301 forced-labour probe, with Jakarta seeking further cuts via negotiations. Shipping Costs Turn Up: Drewry’s intra-Asia container rates rose 6% to $1,028 per 40ft, driven by weather disruptions and Middle East unrest, with Shanghai–Jakarta up 5%. BRICS Payments Push: BRICS is exploring integration of instant payment systems and central bank digital currencies to cut cross-border transfer costs, with India’s RBI governor leading discussions. Rural Economy Plan: Prabowo set a target of 30,000 “Red-and-White” village cooperatives fully operational by end-2026, aiming to reduce farm and fisheries spoilage via guaranteed buying and transport. Green Economy: Indonesia highlighted its Carbon Unit Registration System (SRUK) and carbon value exchange as it pushes a carbon-market framework to let communities benefit from emissions cuts. Health & Risk: Public health warnings on dengue and chikungunya stress mosquito control as hot, rainy conditions boost breeding.

Indonesia EV Push: President Prabowo launched the Molinas national electric motorcycle initiative, aiming to cut fuel dependence and boost energy security, with plans to explore lower financing rates, remove down payments, and add trade-in schemes for petrol bikes. Capital Markets & Index Watch: Indonesia’s GoTo is set to be dropped from MSCI indexes on liquidity concerns, while IDX says it will keep communication with MSCI after the August review. Carbon Market Build-Out: Indonesia is promoting a comprehensive greenhouse-gas reduction ecosystem, pairing carbon trading with results-based payments and upgrading its carbon credit registration system (SRUK) to improve integrity and avoid double counting. Trade & FX Signals: Ringgit held near-flat ahead of Malaysia’s GDP data, while Indonesia-focused coverage also flagged Indonesia’s push to deepen local currency and financial ties. Customs Crackdown: Indonesia foiled a US$3.52m gold smuggling attempt at Soekarno-Hatta, arresting seven Chinese nationals and an Indonesian ground-handling employee. Defense & Regional Links: India and Indonesia held 12th army-to-arm staff talks in Lucknow to strengthen defense cooperation and joint training. Tech & Infrastructure: Huawei wrapped up its Asia-Pacific Network Summit in Bali, unveiling an upgraded Xinghe intelligent network solution under “secure and intelligent connectivity,” as AI agents expand and cyber threats rise.

Free Meals Funding Crunch: Indonesia’s flagship free meals programme is leaving remote kitchen investors buried in debt as reimbursements lag and payment rules keep changing, Reuters reports, with at least 400 investors funding 1,500 kitchens and hundreds still awaiting final inspections. EV Push: President Prabowo says Indonesia aims to start mass production of home-grown electric cars by 2028, with a West Java factory complex planned to scale from 50,000 vehicles a year to up to 300,000. MSCI Index Shake-up: MSCI is set to drop GoTo from Indonesia’s benchmarks on liquidity concerns, while other Indonesian stocks face removal, prompting investors to reassess exposure. Central Bank Leadership: Indonesia’s central bank governor nomination and market-calming steps remain in focus after Destry Damayanti’s selection as the sole candidate. Trade & Retail: The Trade Ministry and Shopee launch a Local Products Acceleration programme to boost MSME market access via e-commerce. Energy Transition & Climate: A climate group urges a windfall tax on coal profits to fund wildfire recovery as Bromo Tengger Semeru firefighting drags on. Infrastructure Updates: Jakarta’s LRT Velodrome–Manggarai line is nearly ready at 97.99%, with remaining signaling work targeted to be finished by Aug. 20. Regional Connectivity: ASDP Indonesia Ferry says the Batam–Johor Ro-Ro service could start mid-2027, pending port readiness and regulations.

Immigration & Digital Economy: Indonesia is reviewing work-visa rules and tax treatment for foreign digital nomads as remote workers increasingly base themselves in places like Bali, with officials saying current frameworks don’t fit people who physically live in Indonesia but work for overseas employers. Food Security & Budget Oversight: Indonesia’s Finance Ministry is tightening on-the-ground supervision of the free nutritious meal (MBG) program using its treasury offices across provinces, flagging site-level operational and administrative gaps for follow-up with the National Nutrition Agency. Maritime Safety: A Bali-to-Lombok ferry (Putri Yasmin) caught fire in rough seas; 211 people were evacuated and at least one died, with authorities investigating why the manifest figures may understate actual occupancy. Trade & Commodities: Indonesia urged beef importers to speed up quota realization to cool rising domestic prices, pointing to bottlenecks and pushing sourcing from cheaper overseas suppliers. Conservation: Indonesia launched its Sumatran Elephant Conservation Strategy and Action Plan, stressing it must be executable at grassroots level as active elephant enclaves reportedly fell from 42 to 21. Regional Security & Shipping: Houthi attacks in the Red Sea killed crew and rescuers in a “double tap” strike, underscoring renewed risks for global shipping routes.

Capital Markets & Policy: The Indonesia Stock Exchange (IDX) says it has received interest from potential investors as it prepares for demutualization under the P2SK Law, with ownership set to involve three state institutions including Danantara Indonesia. Infrastructure & Growth: Public Works Minister Dody Hanggodo argues toll roads should directly unlock industrial hubs, ports, airports, special economic zones and tourist destinations to spur more equitable regional development. Digital Economy & Consumer Protection: IBM reports Southeast Asia data-breach costs hit a 2026 record average of about US$4.12m, while new research shows growing public support for age assurance online and stronger platform responsibility for protecting minors. Energy Transition & Environment: Indonesia’s Environment Ministry says village cooperatives could join carbon trading by restoring forests and mangroves and registering carbon units for sale. Trade & Security: Indonesia warns it must not become a transit hub for illegal goods, after a major ketamine seizure in Batam. Regional Shock to Shipping: Houthi attacks in the Bab al-Mandeb Strait killed crew including Indonesians and Pakistanis, raising fresh risks for maritime trade.

Indonesia–Kuwait Trade: Indonesia’s ambassador to Kuwait said bilateral trade rose to $606m in 2025 (from $547.5m in 2024), with exports at $193m and imports at $412.5m, and pushed for faster growth plus an Indonesia–GCC free trade deal. Tourism & Regulation: Bali is tightening scrutiny of foreign content creators, with calls for clearer visa rules that distinguish independent creators from commercial productions. Maritime Risk: Fresh Houthi attacks in the Bab al-Mandeb/Red Sea killed at least six, including an Indonesian and multiple Pakistanis, raising uncertainty for shipping and food supply routes. Anti-Corruption Cooperation: Indonesia’s ICPC push for stronger international cooperation highlighted sharing anti-graft experience with partners abroad. Energy & Power Execution: ASEAN energy leaders warned the region faces a capital coordination gap for the energy transition; meanwhile, a study says Southeast Asia’s gas-fired pipeline is constrained and far less capacity is likely to reach operation by 2030. Business & Tech Adoption: Indonesia’s AI adoption is shifting from hype to measurable returns, with firms demanding productivity and cost benefits rather than “pilot purgatory.” Capital Markets: Indonesia’s gold ETF push and broader bullion market deepening efforts continue, alongside moves to expand payment and financing access for MSMEs.

Central Banking & Markets: President Prabowo has nominated BI acting governor Destry Damayanti as the sole candidate for the permanent Bank Indonesia governor role, aiming to calm market uncertainty after Perry Warjiyo’s resignation. Capital Markets: The IDX launched Indonesia’s first physical gold ETF, with officials pitching it as a way to deepen the bullion ecosystem and broaden investment access. SME Finance: Coordinating Economic Minister Airlangga Hartarto proposed lifting the MSME credit disbursement target to Rp2,000 trillion from about Rp1,500 trillion, citing rising financial inclusion. Trade Balance: Indonesia’s trade deficit narrowed to US$0.45bn in June as exports rose to US$25.46bn, led by non-oil and gas. Digital Economy & AI: Indosat launched “Zankore by Indosat” with Ooredoo, Nokia and NVIDIA to build AI infrastructure capacity, while Pluang prepares an agentic trading platform for wider retail access. Creative Exports: Indonesia is pushing video game exports, citing Rp750bn in 2024 game value largely driven by global users. Energy & Commodities: Oil prices jumped as hopes for a Strait of Hormuz deal faded; CIMB raised 2026-27 CPO forecasts on El Niño-linked supply risks and biodiesel demand. Agribusiness: Central Sulawesi shipped 7,344 tons of frozen durian to China in Jan–Jul, with exports via Pantoloan Port. Enforcement: Customs and excise seized 8.96 million illegal cigarettes at Tanjung Priok, targeting a rail-to-islands smuggling route. Social Protection: The Social Affairs Ministry suspended aid for about 1.5 million families flagged for online gambling transactions.

Banking & Confidence: Indonesia’s central bank leadership is in focus after Acting BI governor Destry Damayanti was nominated as the sole candidate for permanent governor, with the presidential letter submitted to the DPR and next steps set under existing law. Digital Economy & Creative Industries: Indonesia’s communications ministry unveiled a “3C” framework (connectivity, catalyst, competency) to grow the game industry, pairing fibre expansion and internet village rollout with innovation and skills training. EV & Infrastructure: Malaysia’s EV charging operator launched JomChargeX, branding ultra-fast DC charging from 200 kW up to a planned 1,200 kW, while also noting most vehicles can’t actually use the full headline power. Trade & Food Exports: Indonesia exported its first marinated catfish shipment to Taiwan (10.5 tons) under strict safety standards, with a larger follow-up planned for September. Energy & Industry: BP is advancing its Offshore Tangguh Future project, seeking contractors for geophysical and geotechnical surveys to support platform and pipeline design for additional LNG feed gas. Governance & Social Policy: Teachers warn an education law revision could reopen funding paths for the free nutritious meal program by allowing health services at schools to be treated as part of education. Regional Security: A senior Pentagon official urged Asian allies to boost defence spending while stressing the US is “digging in” in Asia, with a visit itinerary that includes Indonesia.

Central Banking Shake-Up: President Prabowo nominates Destry Damayanti as Bank Indonesia governor, naming her as the sole candidate after Perry Warjiyo’s July resignation; DPR will decide when it reconvenes, keeping BI independence in focus. Capital Markets Push: OJK and IDX launch Indonesia’s first physical Gold ETF, Sharia-compliant and backed by tangible gold via Electronic Gold Receipts, aiming to deepen the bullion ecosystem and liquidity. State-Backed Market Moves: Danantara says it will prepare SOE IPOs within 6–12 months and is also preparing to buy an IDX stake as part of the exchange’s demutualization under the 2026 financial-sector law. Policy Research for Planning: BRIN and the Finance Ministry launch “Prima” to fund 177 applied research projects so ministries base policies on science-driven studies. Jobs & Skills Data: Manpower Ministry upgrades labor market information to better match education outputs with industry demand. Food Security Stance: Indonesia reiterates food self-sufficiency will stay compatible with open, rules-based trade. BRICS Agricultural Trade: Indonesia urges BRICS to expand industrial cooperation into agriculture to grow value-added agro exports. Tourism & Media Tech: InJourney trains Mandalika tourism workers ahead of MotoGP; Indonesia launches its first FAST media alliance to expand connected-TV distribution.

Central Banking Watch: Prabowo has not yet sent formal nominations to the House for the vacant Bank Indonesia governor post, but Destry Damayanti remains the interim frontrunner—an investor-sensitive decision on policy continuity. Nuclear & AI Pipeline: BRIN pitched Prabowo on building strategic tech capabilities, including nuclear readiness, modular housing, coastal protection, waste management and desalination. Indonesia-Regional Trade: Indonesia and Thailand set a US$20bn bilateral trade target for 2030, with 1H26 trade already at US$9.8bn. Energy Execution Gap: Wood Mackenzie says Southeast Asia will deliver under one-third of planned gas-fired power capacity by 2030, citing financing, turbine and LNG bottlenecks. Jakarta Mobility & EVs: Busworld coverage underscores Jakarta’s push to move locally built battery-electric buses from trials into Transjakarta corridors. Shipping & Logistics: Drewry’s Intra-Asia Container Index edged up to $970/40ft, while dry bulk sentiment improved as Capesize rates strengthened. AI Weather Tech: Google opened WeatherNext 2 and cyclone models to researchers, promising roughly a day more lead time for storm planning. Corporate Social Responsibility: IMIP’s CSR programs won awards at Indonesia’s Social Responsibility Awards, highlighting economic empowerment, healthcare and education. Tourism Disruption: Indonesia closed Mount Bromo National Park indefinitely after wildfire spread, with firefighting ramped up via helicopters and drones.