Central Government Transfers to South Sumatra Plummet to Rp3.3 Trillion in 2026

South Sumatra province anticipates a significant decrease in central government transfer funds, expecting to receive Rp3.3 trillion in 2026. This figure represents a sharp decline from the Rp5.2 trillion allocated for 2025, according to confirmation from the South Sumatra Regional Finance and Asset Management Agency (BPKAD).

Yossi Hervandi, head of BPKAD Sumsel, clarified that the official budget for 2026 is Rp3.3 trillion, correcting earlier reports that suggested Rp4.5 trillion. "In 2026, we will receive Rp3.3 trillion in central transfer funds. This is a decrease from Rp5.2 trillion in 2025," Yossi stated.

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In 2026, we will receive Rp3.3 trillion in central transfer funds. This is a decrease from Rp5.2 trillion in 2025.

Facing this budget shortfall, the provincial government is focusing on more selective financial management. Yossi stressed that the administration prioritizes the quality and targeted impact of its spending rather than simply achieving high absorption rates. "The governor is implementing a focus on quality, targeted spending that benefits the community," he explained.

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The governor is implementing a focus on quality, targeted spending that benefits the community.

Despite the fiscal challenges, the provincial government assures that priority programs will continue. Current budget realization stands at approximately 55 percent, with funds directed towards essential areas like employee spending, basic infrastructure development, and public services.

The reduction in central transfers serves as a catalyst for South Sumatra to enhance its fiscal independence. The province is urged to maximize its own revenue sources (PAD) to bridge the financial gap. Yossi noted that the composition of PAD now exceeds central transfer funds, indicating growing fiscal self-reliance. Meanwhile, the province awaits nearly Rp1 trillion in unpaid revenue sharing funds (DBH) for 2023-2024, with only about Rp18 billion disbursed so far.

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Because central transfer funds are cut, we are forced to be fiscally independent because they are reduced from the center, so we must optimize regional original income.