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IN a decisive push towards a high-value, inclusive economy, Malaysia will channel significant resources into upskilling local talent, revamping Islamic finance, and advancing the halal industry under Budget 2026, unveiled today by Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim.
“To meet the demands of high-growth industries, more local talent is needed in the field of TVET,” Anwar said. “The National TVET Council will strengthen the TVET ecosystem holistically, including a proposed TVET Act.”
The 2026 budget allocates RM7.9 billion for Technical and Vocational Education and Training — a modest increase from RM7.5 billion in 2025 — with a clear focus on preparing the workforce for AI, electric vehicles, and semiconductors. Among the initiatives:
The National TVET Council will receive RM45 million to embed digital and AI knowledge into 10,000 tahfiz and pondok students through the IPT@Komuniti programme.
The Ministry of Education’s TVET institutions will be allocated RM1.3 billion to train 79,000 students, while HRD Corp will offer three million training slots with RM3 billion in funding, especially in high-tech and energy transition sectors.
The Skills Development Fund Corporation (PTPK) will provide RM650 million in financing to support more than 25,000 trainees, with a focus on NIMP-related sectors such as AI and semiconductors.
The Department of Skills Development will receive RM34 million for its Industry-Based Academy Programme, aimed at reducing reliance on low-skilled foreign labour.
GiatMARA will offer training for over 13,000 individuals, including gig workers, while Community Colleges will deliver lifelong learning programmes for marginalised communities including people with disabilities, single mothers, the elderly, and Indigenous communities.
Infrastructure upgrades are also in the pipeline. A new aircraft maintenance hangar will be built at ADTEC Shah Alam, while a Teaching Shipyard Complex will be constructed at UMT to support maritime skills development. A new vocational college is also planned for Sabah.
Reimagining Islamic Finance for the 21st Century
Islamic finance is also set for transformation. “The Islamic financial system must not be stagnant or shackled by tradition. It must evolve to meet today’s demands and offer strong solutions for the wellbeing of the ummah,” said Anwar.
The government is piloting risk-sharing finance models including *musyarakah* and *murabahah*, as well as blended finance structures. Labuan IBFC is positioning itself as a Digital Islamic Finance Hub, introducing a Global Tokenised Sukuk initiative to digitise sukuk with increased transparency and accessibility for retail investors.
Climate sukuk will also be launched to fund green projects, offering returns in the form of carbon credit dividends. Additionally, the iTEKAD programme will be expanded with RM35 million in matching grants to help low-income individuals upskill and achieve stable employment.
Reviving Wakaf for Social Development
Echoing the MADANI ethos, wakaf initiatives are also gaining traction. UDA Holdings is leading the redevelopment of wakaf land in Penang, including Taman Wakaf Seetee Aisah (Phases 2 and 3) and Taman Sultan Sallehuddin (Phases 1B and 2B), with investments nearing RM250 million.
A new tokenised cash wakaf sukuk will also be introduced to fund social impact projects such as special education, autism centres and palliative care, enabling individual donations to be converted into long-term financing for public benefit.
Halal Industry as Growth Catalyst
With global demand for halal goods rising, Malaysia is also enhancing its halal certification and financing ecosystem.
JAKIM will expedite halal certification processing, while the Halal Development Corporation will continue encouraging compliance among businesses.
SME Bank is offering RM100 million in dedicated financing for halal SMEs, while SJPP will double government-backed loan guarantees for halal companies from RM1 billion to RM2 billion.
To anchor the industry geographically, the government will also develop a RM124 million Halal Industrial Park in Manjung, Perak. - October 10, 2025
Taken together, these measures reflect Malaysia’s strategic pivot to human capital development and economic equity — rooted in tradition, yet forward-looking in design. - October 10, 2025
