Jakarta. Indonesia has increased its regional government transfer allocation to Rp 715.34 trillion ($40.3 billion), up from the initial budget of Rp 693 trillion, to help local administrations address disaster-related needs and cover employee salaries.

Finance Minister Suahasil Nazara said on Friday that the government had added Rp 29.5 trillion to regional transfers (TKD) following consultations with local administrations.

The additional funding includes Rp 10.6 trillion for disaster response in Sumatra and Rp 18.9 trillion to help regional governments struggling to pay salaries for government employees under fixed-term employment agreements (PPPK).

“Therefore, the current regional transfer allocation stands at Rp 715.34 trillion. We will continue to monitor it and ensure timely disbursement so that regional governments can continue carrying out their activities,” Suahasil said at the Finance Ministry’s September 2026 State Budget Performance and Facts (APBN KiTa) press conference in Jakarta.

As of Aug. 31, the government had disbursed Rp 504.3 trillion in regional transfers, equivalent to 72.8% of the initial Rp 693 trillion budget. The disbursement was down 11.8% year-on-year.

“Regional transfers amounting to Rp 504.3 trillion have been disbursed against the initial allocation of Rp 693 trillion,” Suahasil said.

He described regional transfers as part of the government’s broader fiscal strategy, emphasizing that the state budget (APBN) and regional budgets (APBD) work together to support development and public services across the country.

“The Rp 504.3 trillion allocated to regional budgets comes from the state budget. That is why we view the APBN and APBD as one unified effort,” he said.

The Finance Ministry attributed the disbursement to improved budget absorption and output delivery by regional governments, the shift to monthly teacher allowance payments from quarterly disbursements, and additional general allocation funds and revenue-sharing funds to cover salaries for regional civil servants.

The regional transfers support the salaries of 4.3 million regional civil servants and provide operational funding for 42.3 million school students and 5.8 million early childhood education students.

The funding also supports 15,553 Sekolah Rakyat (People’s Schools), 992,000 equivalency education students and 616,000 teachers receiving allowances.

Other supported services include strengthening 50 regional public hospitals and handling 285.2 kilometers of roads.

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