THE DEVELOPMENT OF SUSPENSION OF DEBT PAYMENT OBLIGATION (PKPU) IN Q3/2022
As previously predicted, the number of Suspension of Debt Payment Obligations (PKPU) cases in Q3/2022 recorded an increase again compared to the previous quarter.
Based on data from the District Court – Commercial Court, there was an increase in the number of cases by 12.23% from the total cases for the same period in 2021. This illustrates that the business world is still not fully recovered. Indonesia’s economic growth in Q3 and Q4/2022 is projected not to be easy. The war between Russia and Ukraine has yet to show signs of ending. This geopolitical condition has also become a negative sentiment for global economic growth, including Indonesia. For this reason, the government must be very clever in finding ways to encourage economic growth, especially in the coming quarters.
Based on the Case Search System (SIPP) updated in Q3/2022, there were 156 registered cases with details of 133 cases of Bankruptcy and Suspension of Debt Payment Obligations and 23 cases of Petition for Declaration of Bankruptcy.
DEVELOPMENT IN Q3/2022
Based on the development of PKPU cases in Q3/2022, the growth in the number of cases in August rose significantly to 62 cases from 53 cases in the previous month. The spike in August saw the highest cases recorded in the Central Jakarta Commercial Court (PN), Semarang District Court and Surabaya District Court. And although in September it fell to 41 cases, this condition is still not consistent and can be maintained until the end of the year.
WHICH INDUSTRY WAS THE MOST INVOLVED IN PKPU CASE IN Q3/2022??
After processing and analyzing the data, most of the subjects involved in the case came from the Real Estate Activities sector (18.71% of the subjects involved), Construction (12.23%), and Manufacturing (10.79%). This sector is a business sector where the occurrence of PKPU cases is the largest compared to other business sectors.
This year’s property growth has just bounced back from the pressures of the Covid-19 pandemic. However, this sector is again facing the threat of declining performance due to bad macroeconomic conditions.
The property sector previously faced pressure from the imminent threat of the Russia-Ukraine war, uncertain global economic conditions, domestic inflation that touched 4.94%, and rising fuel prices. On the other hand, September is the last month of giving incentives. Value Added Tax (VAT) borne by the government (DTP) of 50% is given for the sale of houses and flats with a maximum value of IDR 2 billion and 25% for houses and flats above IDR 2 billion to IDR 5 billion. (ekonomi.bisnis.com).
The Covid-19 pandemic has caused many property developers to be involved in bankruptcy cases and Suspension of Debt Payment Obligations (PKPU). These developers propose to the court how to pay so as not to go bankrupt. If approved by the court, the developer is given 45 days for a temporary PKPU.
LIST OF MANUFACTURING SECTOR INVOLVED IN THE CASE OF PKPU Q3/2022
It was noted that there were as many as 22 manufacturing companies involved in the PKPU case. Based on the type of industry, most of the companies came from the Textiles and Paper and paper products sector with 18.18% respectively, Plastics Materials; Silverware, Plated Ware, and Stainless Steel Ware; Fabricated Metal Products, and other non-metallic mineral products each accounted for 9.09%. And the rest is 4.55% of the total.
THE PREDICTIONS OF THE UPCOMING GLOBAL RECESSION EFFECT ON PKPU
It must be admitted that the global inflation rate is still increasing. Hopefully, it is estimated that inflation will begin to decline in Q4/2022. The existence of global uncertainty, especially regarding geopolitics, such as the war between Russia and Ukraine, adds to the economic challenges in the third and fourth quarters of this year. Not to mention the added provocation of the United States (US) by coming to Taiwan, namely the Speaker of the US House of Representatives Nancy Pelosi. The China vs Taiwan conflict could also lead to even higher uncertainty, the heated geopolitics that was previously only in Europe now shifts to Asia. From the financial side, it is said that the aggressiveness of the Fed’s interest rate hike will continue until there are signs of abating of inflationary pressure in the US. The Fed targets that aggressiveness will be stopped if US inflation reaches 2%, while now it is in a position of more than 9%. This condition has resulted in disruption of global trade supply chains and triggered a surge in inflation in various countries.
Meanwhile in the US, inflation has touched 9.1% (yoy) even though normally inflation in the country is in the 2-2.5% range. Inflation has also spiked in Europe, where inflation has reached 8.6%. Similarly, Japan’s inflation penetrated 2.3% and Singapore’s 6.7%. (https://www.beritasatu.com/economy/)
Based on a McKinsey & Co survey in June 2022, it shows that inflation is the main concern for business players in the world. (https://www.beritasatu.com/economy/)
From inflation in developed countries where the supply factor is 66% and the rest is from demand 33.75%. It is the same pattern in developing countries. If we look at the contribution of supply driven inflation continues to increase due to the Russia-Ukraine war, which causes the cost of input of commodity prices to increase. It can be seen that the pressure on the global economy due to the supply shock has become more evident since Q2/2022. (https://www.beritasatu.com/ekonomi/)
Therefore, the government and business players still need to continue to observe and be aware of various developments because the peak of global inflation is likely to continue. Business players must anticipate the possibility that the performance of the world economy will weaken due to high inflation and rising interest rates and try to avoid bankruptcy lawsuits. Because the impact of bankruptcy lawsuits is very heavy because it can destroy the reputation and image of business players. Meanwhile, their companies will not necessarily be declared bankrupt.