From a macroeconomic perspective, the second quarter of 2025 was marked by weakening domestic demand and declining exports. Household consumption moderated due to stagnant purchasing power, while export performance—particularly in the manufacturing, textile, and mining sectors—slowed because of economic deceleration in China and the European region. Simultaneously, the Indonesian Rupiah came under pressure amid the United States’ ongoing tight monetary policy. The Federal Reserve's interest rate hikes compelled Bank Indonesia to maintain its benchmark interest rate at a high level, which in turn constrained corporate liquidity across the country.
Cost-side pressures have also intensified. Geopolitical uncertainties, including tensions in the Red Sea region, and the impact of extreme climate conditions have disrupted global supply chains, driving up logistics costs and raw material prices. Companies with high exposure to imports and lacking effective hedging mechanisms against exchange rate fluctuations are among the most vulnerable. This has significantly worsened the operational cost structure, particularly for labor-intensive and export-oriented industries.
The impact of the global economic slowdown, compounded by geopolitical instability, has posed significant challenges to the Indonesian business landscape. Nevertheless, recent data published by the Case Search Information System (SIPP) for the second quarter of 2025 reveals a notable shift in the number of Suspension of Debt Payment Obligation (PKPU) cases, offering a new perspective on the evolving financial conditions of corporations in the country.
In the second quarter of 2025, Indonesia recorded a total of 152 Suspension of Debt Payment Obligation (PKPU) cases—an increase of 15.15% compared to 132 cases in the previous quarter (Q1 2025). Although this figure has not yet reached the peak of 216 cases seen in Q3 2023, the upward trend warrants close attention. Amidst an uneven global economic recovery and persistent domestic and external pressures, this surge underscores the financial strain that businesses across various sectors are once again beginning to experience.
According to the latest data from the Case Search Information System (SIPP) for Q2 2025, there were 152 registered cases, comprising 130 classified under Bankruptcy and Suspension of Obligations for Payment of Debt and 22 under Petition for Declaration of Bankruptcy. This composition highlights the continued function of PKPU as a legal tool for early intervention in managing corporate debt risks—prior to companies reaching a state of insolvency. Rather than serving merely as a formal legal pathway, PKPU also reflects a company’s financial condition that, while strained, may still be recoverable through judicial support and constructive negotiations.
The relatively low proportion of bankruptcy petitions in Q2 2025—accounting for only approximately 1 in 7 cases—suggests that relationships between creditors and debtors within the national business sector have not entirely deteriorated. There remains a degree of goodwill from both parties to reach mutually beneficial solutions. This sends a positive signal that most businesses still possess the potential for continuity, provided they are given room to renegotiate and reschedule their financial obligations.
Nevertheless, the high number of PKPU filings must be interpreted with caution. While the surge indicates ongoing restructuring efforts, it also raises concerns over potential misuse of the mechanism by debtors seeking merely to delay payments without genuine intent to fulfill their obligations. As such, the effectiveness of the PKPU process is highly contingent upon the integrity of the judicial proceedings, the professionalism of court-appointed administrators (curators), and the supervision by the commercial courts. To ensure that restructuring proposals are implemented as agreed, it is imperative for the government and the Financial Services Authority (OJK) to establish a robust post-PKPU monitoring system.
According to CRIF Indonesia, the current proportion of PKPU cases reflects a legal environment that still favors constructive debt resolution over permanent business termination through bankruptcy. At the same time, this trend highlights the importance of enhancing financial reporting transparency, encouraging open communication among stakeholders, and developing early warning systems for financial distress. Such measures are crucial to ensuring that the PKPU process remains a legitimate tool for business recovery, rather than being reduced to a mere delay tactic.
The monthly trend of Suspension of Debt Payment Obligation (PKPU) cases in Indonesia between July 2024 and June 2025 reveals a pattern of notable fluctuations. The highest number of cases was recorded in October 2024, reaching 68, followed by a significant decline to the lowest point in March 2025 with just 33 cases. Subsequently, the number of filings rose again to 60 cases in February 2025 and 55 in April 2025, before stabilizing at 50 cases in June 2025.
This pattern reflects a tendency for financial distress to intensify toward the end of the fiscal year and the beginning of the new budget cycle. The surge in filings during these periods is likely driven by deteriorating corporate cash flows, mounting debt repayment obligations, and year-end financial reviews that often trigger the need for debt restructuring. These seasonal dynamics underscore the importance of proactive financial planning and liquidity management among businesses to avoid legal distress and ensure long-term sustainability.
The accompanying chart illustrating the regional distribution of PKPU cases reaffirms that the Central Jakarta Commercial Court continues to serve as the primary hub for debt restructuring proceedings in Indonesia. Over the past twelve months, Central Jakarta has consistently recorded the highest volume of cases, averaging between 30 and 45 cases per month. This is expected, given Jakarta’s role as the country’s core center for corporate activity, financial services, and large-scale industry.
However, a notable development is the rising number of PKPU cases emerging from Semarang and Surabaya, particularly in September and October 2024, where the two regions registered 11 and 8 cases respectively. This trend signals that financial distress is beginning to extend beyond the Greater Jakarta area into secondary industrial zones. The increase in filings from these regions reflects the broader economic pressures affecting businesses across the archipelago, highlighting the need for decentralized economic resilience and stronger regional financial safeguards.
Other cities such as Medan and Makassar have reported relatively lower numbers of PKPU cases, ranging from 1 to 6 per month. While these figures may appear modest, the fluctuations suggest that corporate solvency issues are not confined to Jakarta alone. They are also surfacing in regions with a strong presence of mid-sized businesses, particularly in local distribution and manufacturing sectors.
The chart above reveals that the Mining and Quarrying sector recorded the highest number of PKPU cases, with 15 filings (12.5%), followed closely by the Construction sector with 14 cases (11.7%). The dominance of these two capital-intensive sectors reflects their inherent exposure to large-scale project cycles and long-term financing structures. Mining companies, in particular, are highly vulnerable to global commodity price volatility and regulatory uncertainties, while the construction sector continues to grapple with liquidity constraints and delayed payments from both private and government projects.
Interestingly, the Agriculture, Forestry, and Fisheries sector ranked third, with 11 cases (9.2%), followed by Real Estate with 10 cases (8.3%). The inclusion of the agriculture sector among the top three is noteworthy, given that it is traditionally seen as a more defensive industry. However, increasing climate-related disruptions, price instability of agricultural commodities, and limited access to affordable financing have intensified liquidity challenges for agribusiness operators.
The Manufacturing and Infrastructure & Alternative Energy sectors each reported 8 cases (6.7%), indicating substantial strain on the real economy. Manufacturers are facing reduced export demand coupled with rising input costs, while players in the alternative energy space are likely dealing with underdeveloped financing mechanisms and project bankability issues. Together, these trends point to the widespread financial stress affecting multiple business lines, both traditional and emerging.
The textile industry accounts for 50% of all manufacturing companies involved in PKPU proceedings, significantly outpacing other sectors. This dominance underscores the presence of deep-rooted structural pressures within the industry, including a heavy reliance on imported raw materials, volatile cotton and energy prices, and intense competition from low-cost textile producers abroad—particularly from China and Bangladesh. Additional challenges, such as rising labor costs and shifting consumer preferences toward fast fashion, are further straining the viability of domestic textile businesses.
The remaining four manufacturing subsectors—namely, home entertainment electronics, hydraulic cement, other non-metallic mineral products, and stainless steel—each contributed just 12.5% of the total cases. While these numbers are relatively modest, their presence is still notable, as they reflect ongoing stress within capital-intensive industries and manufacturing segments reliant on local raw materials.
According to CRIF Indonesia, targeted interventions such as financing restructuring, export incentives, or production efficiency support may help mitigate further spikes in PKPU cases across the manufacturing sector. Moreover, the distribution of cases across smaller subsectors highlights the broader structural pressures affecting Indonesia’s manufacturing landscape—pressures that require coordinated, cross-sectoral policy responses to safeguard the resilience of national industry.
WHAT IS THE POTENTIAL IMPACT OF THE “TRUMP TARIFFS” ON INDONESIAN COMPANIES IN THE FUTURE?
The reintroduction of high tariffs by the United States, widely known as the “Trump Tariffs,” is poised to significantly impact Indonesian businesses starting in the second quarter (Q2) of 2025. This policy introduces additional global pressures, particularly for export-oriented Indonesian companies. The manufacturing sector—especially textiles, garments, electronics, and automotive components—is likely to be the hardest hit, as these products are heavily exported to the U.S. or are part of global supply chains connected to tariff-affected countries. According to the World Bank’s Indonesia Economic Prospects report (June 2025 edition), these sectors were already grappling with volatile global demand, and the imposition of tariffs will only exacerbate existing challenges.
Furthermore, the tariff policy is expected to raise the cost of importing industrial raw materials, which Indonesia still heavily relies on, particularly intermediate goods such as steel, electronics, and chemicals. This will inevitably increase production costs, squeeze profit margins, and may lead to higher domestic prices. On another front, competition in the local market may intensify due to the spillover effect of low-cost products—especially from China—seeking alternative markets after being restricted from the U.S. market. As noted by the Brookings Institution, this is a common consequence of global trade wars and could disrupt manufacturing stability in developing economies.
Rising global uncertainty resulting from U.S. protectionist measures may also cause multinational corporations to delay expansion and investment plans. This could result in a decline in Foreign Direct Investment (FDI) inflows to Indonesia, particularly in capital-intensive sectors like manufacturing and exports. The World Investment Report 2025 by UNCTAD affirms this, stating that global investment into developing countries has begun to stagnate due to growing protectionist policies in developed nations.
Given these pressures, CRIF Indonesia warns that the financial standing of many companies—especially those already in vulnerable positions—could deteriorate further. As reflected in the Q2 2025 data on Penundaan Kewajiban Pembayaran Utang (PKPU, or Suspension of Debt Payment Obligations), there has been a noticeable increase in cases within the manufacturing and mining sectors. Notably, the textile industry, which constitutes the largest proportion of PKPU filings in manufacturing, remains highly exposed to liquidity risks. Without timely interventions, the number of PKPU cases and corporate bankruptcies may continue to rise through the end of the year.
Looking ahead, CRIF Indonesia recommends that Indonesian companies implement mitigation strategies such as diversifying export markets beyond the U.S. to regions like Europe, the Middle East, and Africa. Leveraging trade agreements such as the RCEP, IPEF, and the Indonesia–EU CEPA will be essential to unlock new market access. Domestically, industries should accelerate import substitution by strengthening local supply chains and fostering upstream-downstream integration. On the policy front, government support through fiscal stimulus, export incentives, and regulatory simplification will be crucial to maintaining the competitiveness of Indonesian businesses amid rising global protectionism.
In summary, Indonesian companies will face considerable challenges in Q2 2025 and beyond due to shifting global trade policies. Without robust risk mitigation and strategic realignment, these pressures could hamper economic growth and elevate the risk of business failure across key industrial sectors.
