As the Indonesian economy is severely affected by the COVID-19 pandemic, the business players face significant challenges, not only in demand aspect but also in supply and logistic aspects. Many companies or business players have to close their business, unable to secure their financial condition.
In semester I-2020, based on data from the Participant Reporting Information System or Sistem Informasi Pelaporan Peserta (SIPP), there are 263 cases of Postponement of Debt Payment Obligation or Penundaan Kewajiban Pembayaran Utang (PKPU) and Petition for Declaration of Bankruptcy. If compared to 176 cases in the previous year, the case number in semester I-2020 is increasing by 49.43% or 87 cases, with an interval of 22% to 48% per month.
The significant increase occurred in February, May, and June, when the government started to implement the large-scale social restriction protocol (PSBB) to minimize the outbreak of COVID-19.
Based on the type of classification, 225 cases are “Bankruptcy and Suspension of Obligations for Payment of Debt,” and the other 38 cases are “Petition for Declaration of Bankruptcy.”
Of the total cases, the largest number came from regions covered by SIPP Jakarta Pusat (68%). Meanwhile, the other cases came from SIPP Surabaya (14%), SIPP Semarang (11%), SIPP Medan (6%), and SIPP Makassar (1%). As business competition in DKI Jakarta —as the center of business activities in Indonesia— is tight, so obviously the possibility of business players in the province to get bankrupt during this Covid-19 pandemic is also very high.
During the first semester of 2020, the highest number of cases came from the property and construction sector (38% of the total cases). The fragile condition of this sector is not only because of the uncertainty of the business and the dominant control of large-scale players but also because of the impacts of COVID-19 pandemic, which started to occur in the early year 2020. As is known, the players in the property and construction sector are very vulnerable to social and physical contact among the workers. Thus, related to social distancing and work from home regulation, the property players have to stop all operations. Moreover, the reallocation of government budgets to be bailout funds for overcoming the Covid-19 pandemic has caused the stop to many construction and infrastructure projects in 2020. Automatically, the property and construction players could not have any income at all during the pandemic.
There are 16 PKPU cases or 6% of total PKPU cases registered in SIPP. Apparently, the disadvantaged business development during this pandemic has caused financial service companies with less strong foundations to lose many investors. This situation also causes disruption of their financial condition. During this pandemic, they have to limit their services to anticipate a high risk. Thus, their business performance is now stagnant, not strongly remarkable as in the previous year.
Next to sectors shown above, other sectors such as the mining sector, IT, Steel, and trading sectors are also affected by the pandemic.