BI: Digitalization Of Regional Government Finances Proven To Boost PAD

JAKARTA - Bank Indonesia (BI) revealed that the implementation of the digitalization system in regional government financial transactions has boosted Regional Original Income (PAD) by up to 7.5 percent.

Deputy Director of the Payment System Policy Department of Bank Indonesia, Yosamartha, said that out of a total of 200 local governments implementing digitalization in 2021, it is known that their PAD is much higher than regions that have not implemented digitalization.

"This happened during a pandemic for these local governments (digital local governments). Meanwhile, those who have not digitized are actually under pressure from their PAD," said Yosamartha at the South Sumatra Digital Financial Economy Festival webinar "Digital Kito Galo" held by BI Sumsel, Tuesday.

Therefore, BI considers that digitalization is very important to be implemented by local governments with the hope that all local governments can implement it no later than the end of 2022.

Moreover, the latest BI data shows that regional governments that have implemented it are able to realize the APBN and APBD to above 87 percent, while regions that have not been digitized are even struggling, especially during the pandemic.

Luckily for South Sumatra, he continued, currently a Team for the Acceleration and Expansion of Regional Digitization (TP2DD) has been formed in all its regencies/cities.

Based on the final evaluation in 2021, out of a total of 18 districts/cities, only two regions experienced a setback in terms of financial performance. According to Yosamartha, this is because the area is in the process of adapting financial reporting in the digital era.

"We consider it good in terms of non-cash payments in South Sumatra, because it has been electronified. Maybe what needs to be added in terms of retribution payments must also be non-cash, "he said.

He did not deny that there are still a number of obstacles to speeding up this process, including the unequal availability of infrastructure (internet) to the weakness of the local government's human resources, and the public's low interest and understanding for digital transactions.

However, BI sees this as an opportunity because if the top two problems are resolved, then all that remains is to increase people's literacy.

As is known, he continued, the digital ecosystem is currently moving remarkably in the country with an increase in the number of digital consumers reaching more than 20 million, and more interestingly, 72 percent of the distribution occurs in small cities.

Therefore, regions play an important role in digitizing this payment system and local governments are expected to be agents of change because until now digitalization is believed to be a solution and make the economic process better, he said.