Captures has widened its scope to include news related to all the members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. Besides the ASEAN Member States, this includes Australia, New Zealand, China, Japan, and South Korea. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

THAILAND
Thailand aims to finalize US trade agreement before Prime Minister Anutin meets with President Trump
(15 September 2026) Thailand aims to finalise the substance of a US tariff agreement before Prime Minister Anutin Charnvirakul speaks with President Donald Trump around 17–18 September, with Bangkok potentially seeking a slightly lower rate. Thailand’s Commerce Minister is due to hold talks with the Office of the US Trade Representative on Tuesday to resolve remaining details. Thailand currently faces a 12.5% US tariff on most covered exports under Section 301 and is seeking terms comparable with its Southeast Asian peers. Indonesia and Malaysia face 10% tariffs, while the Philippines, Singapore and Viet Nam face 12.5%. Thailand recorded a USD 51.4 billion trade surplus with the US last year and has offered to eliminate tariffs, accept US standards for beef, lamb and alcoholic beverage imports, and accelerate legislation banning goods made with forced labour. The Trump administration is also investigating manufacturing overcapacity in Thailand and other economies. Anutin will begin a weeklong overseas trip on 20 September, travelling to Japan, the US and UK. In New York, he will address the UN General Assembly on 24 September and meet investors and business executives.

THAILAND
Baht’s 8% decline from five-year high in January 2026 should support exports and tourism
(15 September 2026) Thai Vice Finance Minister said the baht’s roughly 8% decline from its five-year high in January should support Thailand’s exports and tourism by improving price competitiveness. The currency’s weakening followed broader US dollar strength, Thai measures against speculative gold trading and relaxed capital-outflow rules. The Vice Minister said policymakers do not target a specific exchange rate and have not needed to adjust interest rates in response to baht movements. The Bank of Thailand kept its policy rate at 1% in August for a third consecutive meeting, with the Vice Minister saying borrowing costs are unlikely to rise even if the US Federal Reserve increases rates. The Thai bond yield curve has steepened mainly because of higher short-term yields, while the spread between two-year and 10-year yields reached 106 basis points on Monday, up from 93 basis points a month earlier. Benchmark 10-year Thai bond yields have risen 67 basis points this year, compared with about 80 basis points for US 10-year yields. The Vice Minister said Thailand’s longer-term yields have risen less than those in many other countries, reflecting the country’s macroeconomic stability and investor appeal.

THAILAND
Thailand mulls 30% import tax on fully-imported electric vehicles
(15 September 2026) Thailand could impose an excise tax of around 30% on fully imported electric vehicles, with Thailand’s Finance Minister saying the government could finalise the rate as early as September. The proposed levy is intended to encourage automakers to invest locally and develop Thai supply chains after low import barriers increased imports of inexpensive Chinese EVs and intensified competition. The Finance Minister said Thailand cannot simply raise tariffs because of its free-trade agreements, making excise taxes the main available tool to favour local production. The EV policy board has approved in principle a three-tier excise structure, with the highest rate for fully imported vehicles, the lowest for vehicles manufactured in Thailand and an intermediate rate for locally assembled models using imported components. Some automakers importing vehicles from China and Europe have already approached the government about investing in Thailand to qualify for lower rates. Nine EV manufacturers have established operations in Thailand, with some already exporting locally produced vehicles.

INDONESIA
Indonesia replaces finance minister in move towards greater policy stability
(15 September 2026) Indonesia’s replacement of Finance Minister Purbaya Yudhi Sadewa with Suahasil Nazara is being viewed by investors as a move towards greater policy stability after months of uncertainty. Nazara, a former deputy finance minister for seven years who served under both former president Joko Widodo and current president Prabowo Subianto, is now responsible for preparing the 2027 state budget and has pledged stability, prudence and a fiscal deficit below the legal ceiling of 3% of GDP. The change follows a recent leadership transition at Bank Indonesia, where Destry Damayanti became governor. Indonesian equities initially recovered after the finance ministry change, while bond yields remained stable, although stocks subsequently fell with regional markets and the rupiah weakened. Indonesia has experienced about USD 1.9 billion in capital outflows this year, while the rupiah has recovered about 3% from its June record low, foreign investors have bought local bonds for four consecutive months and the Jakarta Composite Index has entered a technical bull market. Investors are expected to assess Nazara’s independence, fiscal management and handling of President Prabowo’s growth and social-spending agenda. Key areas of focus include the 2027 budget deficit, Bank Indonesia’s policy independence and the role of sovereign wealth fund Danantara in state finances. MSCI is scheduled to review Indonesia’s progress on market-access issues in November, after regulators raised minimum free-float requirements and addressed concentrated ownership.

MALAYSIA
Global energy shock to impact Malaysia’s electricity generation costs
(17 September 2026) Global energy supply disruptions that initially affected petrol prices in March are now spreading to natural gas and coal, with a delayed impact on Malaysia’s electricity generation costs. Malaysia’s Economy Minister said the effect is particularly affecting consumers using more than 600 kWh per month through the Automated Fuel Adjustment (AFA), which reflects fuel costs. Natural gas prices typically take three to four months to affect electricity tariffs, meaning July and August consumption is now reflecting higher fuel costs. He said most domestic consumers using below 600 kWh remain protected under the current tariff structure, with tariffs unchanged. Prime Minister Anwar Ibrahim is expected to chair a special meeting to reassess electricity tariffs and measures to reduce the impact on consumers. Akmal also said unfavourable weather was contributing indirectly to higher daily electricity consumption as people spend more time indoors.

VIET NAM, UNITED STATES
Vietnamese and US companies to announce 29 agreements during General Secretary’s visit to US
(16 September 2026) Vietnamese and US companies are expected to announce 29 agreements in New York on 23 September during Communist Party General Secretary To Lam’s visit, according to an internal planning note and two documents reviewed by Reuters. Many agreements are expected to be non-binding and cover energy, aviation, technology and financial services. Murphy Oil and Chevron are expected to sign agreements with state-owned Petrovietnam, while ExxonMobil is scheduled to reach an accord with Vietnam Refinery and Petrochemical Corporation. Vietjet is expected to announce leases for up to 22 aircraft from four aviation leasing companies, comprising 17 Boeing 737s and five Airbus A321neos. Vietjet also plans an agreement with SpaceX to provide Starlink satellite internet to 120 aircraft and memoranda of understanding with US jet-engine maintenance firms. Other planned agreements include one between Meta and Vietnam’s Ministry of Culture and another between Qualcomm and telecoms company VNPT. Visa, Mastercard and Citibank are expected to announce agreements with Vietnamese financial and hospitality partners. To Lam is due to address the UN General Assembly on 22 September and meet US companies, while his schedule has not been officially confirmed. His visit is also intended to advance US-Viet Nam trade negotiations, including a possible agreement that has been under negotiation for more than a year. A meeting between To Lam and US President Donald Trump remains uncertain.

SINGAPORE
Singapore’s non-oil domestic exports rise 46.2% year-on-year in August 2026 amidst AI demand
(17 September 2026) Singapore’s non-oil domestic exports (NODX) rose 46.2% year-on-year in August, extending July’s 24.1% growth, with electronic exports increasing 131.8% amid continued AI-related demand. Electronic NODX was driven by disk media products, personal computers and integrated circuits, which rose 290.2%, 237.9% and 90.9% respectively. Enterprise Singapore said NODX to the US, China and South Korea increased, while exports to the 27 EU countries declined. Non-electronic NODX also returned to growth, rising 12% after a 2.4% decline in July. For the first eight months of 2026, NODX increased 22.4% year-on-year. Non-oil re-exports rose 53.3%, led by a 68% increase in electronic re-exports and 32.9% growth in non-electronic re-exports. Total merchandise trade increased 44.5% to SGD 156.9 billion, comprising SGD 84.7 billion of exports and SGD 72.2 billion of imports. OCBC chief economist Selena Ling said the August growth rate was partly inflated by a low base, as NODX stood at SGD 13.3 billion in August 2025, and highlighted memory prices, advanced packaging demand and AI server orders as indicators for future export performance.

Captures has widened its scope to include news related to all the members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. Besides the ASEAN Member States, this includes Australia, New Zealand, China, Japan, and South Korea. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

MALAYSIA
Malaysia’s Anwar Ibrahim announces new cost-of-living measures in light of recent electoral defeats
(08 September 2026) Malaysian Prime Minister Anwar Ibrahim’s latest cost-of-living measures signal a more voter-focused fiscal strategy following three successive coalition defeats in state elections in Sabah, Johor and Negeri Sembilan, with the next general election due by early 2028. Announced on 30 August and implemented days later, the measures raise the monthly subsidised fuel quota for more than 16 million Malaysians to 300 litres from 200 litres, increase diesel assistance for eligible pickup trucks and jeeps to 400 litres from 200 litres, and provide a MYR 200 million grant for hawkers, small traders and home-based businesses. The annual revenue threshold for mandatory e-invoicing was raised from MYR 1 million to MYR 3 million, which the Small and Medium Enterprises Association of Malaysia estimates will exempt another 80,000 small businesses, although many affected companies had already prepared for implementation. Anwar said cost-of-living pressures could not wait until the October 2027 Budget, despite second-quarter economic growth of 6%, record trade and investment, and a stronger ringgit. The Asia Group said political urgency was rising, but Anwar was not in a strong position to call a snap election, making the 2027 Budget a likely opportunity to rebuild support. The Federation of Malaysian Manufacturing (FMM) survey of 670 companies found softer business conditions and demand in the first half of 2026. Among companies affected by geopolitical disruptions, 74% reported raw material shortages or cost increases and 72% cited higher freight, logistics and shipping expenses, while 53% of all respondents identified higher input costs as a key second-half challenge. The FMM said economic gains were concentrated among multinational and large companies, with many SMEs unable to benefit or integrate into supply chains. The expansion of fuel assistance also highlights a trade-off between immediate cost relief and longer-term subsidy reform, with the Asia School of Business estimating that doubling the subsidised fuel quota for about 58,000 ride-hailing drivers to 600 litres could cost around MYR 32 million and weaken incentives to switch to electric vehicles.

MALAYSIA, SINGAPORE
Malaysian ringgit falls 0.2% against Singapore dollar on 09 September 2026
(09 September 2026) The ringgit fell 0.2% against the Singapore dollar to 3.2162 on 09 September, its lowest level since November, as foreign stock outflows continued for a second consecutive month. Global funds sold USD 122 million of Malaysian domestic stocks in September, following USD 486 million in August. The Singapore dollar was supported by the Monetary Authority of Singapore’s tightening stance, including a July increase in its rate of appreciation against the trade-weighted currency basket, while markets expected further tightening at the October meeting. BNY said renewed geopolitical uncertainty was also supporting the Singapore dollar’s safe-haven status. Malaysia’s strong economic growth, supported by the artificial intelligence boom, could provide ringgit support, while Bank Negara Malaysia signalled a more hawkish policy stance last week. Investor caution has increased over fiscal concerns, particularly the impact of restored subsidised fuel quotas on Malaysia’s fiscal position. Prime Minister Anwar Ibrahim is scheduled to unveil the 2027 Budget on 09 October.

CAMBODIA
Boycott of Thai products after border clashes accelerates demand for local alternatives
(08 September 2026) Cambodia’s boycott of Thai products following the July 2025 border clashes has accelerated demand for local alternatives, with Mee Chiet reporting that it has almost replaced Thai brands in the instant noodle segment. Ministry of Commerce data showed sales at soup powder maker Jie Jie’s Kitchen and snack producer Epic Chips Cambodia rose 376% and 323%, respectively, in the first half of 2026 compared with the same period of 2025. Prime Minister Hun Manet said 2,353 new Cambodian products were registered in the first five months of 2026, compared with 2,158 in all of 2024 and 3,625 in 2025. Cambodia imported USD 1.19 billion of Thai goods in the first seven months of 2026, down 37% from USD 1.91 billion in the same period of 2025. The Federation of Association for Small and Medium Enterprises of Cambodia estimated that local products’ share of the nationwide market had risen from about 2%-3% before 2025 to around 30%. In 2025, 700 new factories employing more than 100 workers opened, more than double the 2024 figure, while local SMEs reportedly hired an estimated 30,000-50,000 additional workers in the second half of last year. Kirisu Farm increased its dairy herd to 1,400 cows after bringing in 200 more from Australia in July, raising daily production from 13,000 litres to up to 18,000 litres, with a target of 21,000 litres by next year. The company said its stock, of which 25% had previously remained in storage, was now being sold to the market. New local ventures include Sabay Cinema’s acquisition of Thai-run Major Cineplex Group’s operations, Peace Petroleum Cambodia replacing PTT stations, and Cambrew’s launch of Cambodia Cola. The government’s February #MadeInCambodia campaign connects small producers with supermarket chains and mini-marts, while Hun Manet has waived certain taxes and offered free land for dairy farming. Authorities have seized products made outside Cambodia but labelled as local, while businesses have reported a proliferation of counterfeit goods. In July, Hun Manet stressed correct labelling, and the Ministry of Commerce said it would strengthen fair competition, consumer protection and intellectual property protection.

THAILAND
Consumer confidence index rises for third consecutive month in August to 53.2
(08 September 2026) Thailand’s consumer confidence index rose for a third consecutive month in August to 53.2, up from 51.8 in July and its highest level in six months, according to a University of the Thai Chamber of Commerce survey. The university attributed the improvement to the Thais Help Thais Plus co-payment scheme, steady interest rates and higher prices for key agricultural products, which supported purchasing power. The University of the Thai Chamber of Commerce said planned energy-sector reforms could help sustain growth after the consumer subsidy scheme ends on 30 September. He also said the expected passage of the 2027 budget would support the economy through public spending after September. Consumers were less concerned about the Middle East conflict, although the university said political stability and living costs remained concerns if oil prices rose again.

THE PHILIPPINES
Philippine President Ferdinand Marcos to attend BRICS Summit in India on 12-13 September
(09 September 2026) Philippine President Ferdinand Marcos Jr. will attend the BRICS Summit in India on 12-13 September as this year’s chair of the Association of Southeast Asian Nations (ASEAN), seeking closer ties between the two groupings. A spokesperson for the Foreign Affairs Department said the visit is intended to monitor emerging economic frameworks and represent regional priorities and perspectives. Marcos is scheduled to meet Indian Prime Minister Narendra Modi and business executives. Ratonel said he would seek to ensure that modern partnerships remain open, resilient and capable of delivering prosperity. China’s Xi Jinping and Russia’s Vladimir Putin are also expected to attend the summit.

VIET NAM
Mortgage rates rise sharply, putting homeownership increasingly out of reach
(10 September 2026) Vietnamese mortgage rates have risen sharply, with average rates reaching 12%–14% and floating rates as high as 15%–16%, compared with introductory rates of 5%–7% for buyers under 35 in 2025. The increase reflects growing bank funding pressures as the government accelerates infrastructure investment to support its 10% economic growth target. In August, bank lending was growing faster than deposits, with the funding shortfall estimated at USD 77 billion, increasing competition for funds. Real estate lending rose 42% in 2025, more than twice overall credit growth, but the World Bank said this mainly increased property prices rather than broader economic output. The State Bank of Vietnam has urged lenders to curb property lending, which accounts for about a quarter of outstanding advances, and prioritise small and medium-sized businesses. It warned that the credit imbalance could pose risks to financial and monetary stability, with “very limited room” for monetary policy to support growth. Agribank has tightened property-loan scrutiny, including checks on project legality and developers’ repayment capacity, while prioritising social housing over speculative and high-end projects. Higher mortgage costs and limited affordable supply contributed to a 36% year-on-year decline in property transactions in Q2, to about 100,000, increasing pressure on developers’ cash flow and inventories. More than 70% of new residential supply in the first six months of 2026 was high-end, while Hanoi’s affordable housing supply has declined by about 28% annually since 2022. Rising land-clearance and development costs and lengthy approvals are further constraining affordable supply and contributing to speculation and higher prices. For borrowers, the higher rates are making home purchases increasingly unaffordable, while existing homeowners face higher repayments when fixed-rate loans expire.

INDONESIA
Global investors cautiously returning to Indonesian assets following market stabilization measures
(10 September 2026) Global investors are cautiously returning to Indonesian assets following measures to restore market stability, with foreign funds buying local bonds for a fourth consecutive month, the rupiah up more than 3.5% from its June low and equities approaching their first quarterly inflow of 2026. Invesco, PPM America and other asset managers have reduced underweight positions, while UOB Asset Management Indonesia has moved to neutral and Allianz Global Investors has rebuilt a tactical overweight in front-end government bonds and the rupiah. President Prabowo Subianto has pledged to contain the budget deficit, regulators have introduced further measures addressing MSCI’s market-transparency concerns, and newly appointed governor of Bank Indonesia has signalled policy continuity. However, investors remain concerned about policy execution, Prabowo’s interventionist agenda and the external environment, including higher oil prices and increased expectations of US Federal Reserve rate hikes amid renewed US-Iran hostilities. Foreign investors have bought USD 296 million of Indonesian equities this quarter, compared with almost USD 4 billion of net outflows for the year. Bond inflows have also slowed from June’s USD 1.3 billion, despite Bank Indonesia measures to improve the appeal of local debt. Investors have questioned fiscal transparency because revenue and spending are increasingly being channelled through Danantara, the sovereign wealth fund established by Prabowo, outside government budget reporting. Indonesia’s market turmoil began after MSCI warned in early 2026 of a potential downgrade to frontier-market status over investability concerns, before Bank Indonesia’s off-cycle rate increase and other measures supported a recovery. MSCI subsequently delayed its review after Indonesia introduced transparency reforms, but investors are awaiting the November review and greater evidence of consistent policy implementation before materially increasing exposure.

Captures has widened its scope to include news related to all the members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. Besides the ASEAN Member States, this includes Australia, New Zealand, China, Japan, and South Korea. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

INDONESIA
Export arm of Indonesia’s sovereign wealth fund Danantara launches export monitoring platform
(31 August 2026) Danantara Sumberdaya Indonesia (DSI), the export arm of Indonesia’s sovereign wealth manager Danantara, is launching an export monitoring platform on 01 September covering coal, palm oil and ferro-alloys with combined annual trade flows exceeding USD 70 billion. The platform will verify export quantity, quality, classification, pricing, destinations, payment terms and repatriation of export proceeds, using integrated data from government agencies to identify potential under-invoicing and transfer pricing. DSI will act as an intermediary rather than the sole exporter, scaling back the government’s original proposal, with full implementation targeted by the end of 2026. Since beginning operations in June, DSI has monitored more than 6,500 export declarations covering about USD 14 billion in shipments. The framework could eventually expand to other commodities, although DSI said this would be gradual. Exporters and industry groups have sought greater clarity on reporting obligations, treatment of existing contracts, transition arrangements, pricing benchmarks and potential fees. Concerns are particularly significant for ferro-alloy producers because products such as ferro-nickel are traded through bilateral contracts with varying grades and specifications. President Prabowo Subianto’s plan to establish an Indonesian mineral and commodity exchange could eventually link DSI’s monitoring infrastructure to broader efforts to increase Indonesia’s influence over commodity pricing.

VIET NAM
Foreign franchises struggle to compete in Viet Nam’s beverage market
(01 September 2026) Viet Nam’s modern coffee and tea chain market reached an estimated USD 1.34 billion in 2025, with coffee chains growing 27% year-on-year to USD 725 million and tea chains rising 28% to USD 617 million, but foreign franchises continue to struggle to achieve large-scale expansion. Starbucks had 125 stores by end-2024 and surpassed 150 in January 2026, compared with 985 Highlands Coffee outlets by end-2025 and roughly 2,500 Milano Coffee locations. Chagee’s expansion was constrained after a March 2025 boycott over imagery containing China’s “nine-dash line” on its digital channels, while Café Amazon closed its remaining Vietnamese outlets in November 2025 after five years. Mixue has consolidated its Vietnamese store network following rapid franchising and intra-brand cannibalisation, while Gong Cha, KOI Thé, The Alley and Tiger Sugar remain at approximately 50 to 70 outlets each. Domestic operators increasingly compete across mass-market and premium segments, while Vietnamese consumers show willingness to pay premium prices for product quality, atmosphere and social experience rather than foreign brand origin alone. The article identifies market saturation, rapid local imitation, entrenched domestic supply chains and real-estate networks, and geopolitical reputational risks as major constraints on international expansion. It concludes that strong product-market fit alone is insufficient for foreign chains to achieve category-defining scale in Vietnam’s highly localised and competitive beverage market.

VIET NAM, THE PHILIPPINES
Viet Nam and the Philippines intensify engagement to address issues in bilateral rice trade
(30 August 2026) Viet Nam intensified engagement with Philippine authorities from 19-21 August to address issues in their bilateral rice trade, particularly the Philippines’ safeguard investigation into imported rice. A Vietnamese inter-sectoral delegation led by the Deputy Minister of Industry and Trade met the Philippines’ DTI, DFA, Tariff Commission and Department of Agriculture. Both sides agreed to continue implementing the existing MoU on rice trade cooperation, maintain information exchanges and minimise adverse effects on bilateral trade. Viet Nam proposed upgrading the MoU or establishing a more legally binding and stable framework for long-term rice cooperation, which the Philippine side agreed to study. The Tariff Commission said the safeguard investigation would be conducted fairly and transparently under WTO and ATIGA rules and requested continued Vietnamese participation in a public hearing scheduled for September 2026. Viet Nam urged the commission to consider Philippine import policies, including lower tariffs and SPS import clearances, and the role of imported rice in supply, price stability, and food security. The Philippine side reiterated that Viet Nam remains a stable major rice supplier despite efforts to diversify import sources. The Vietnam Food Association and Philippine Rice Industry Association also agreed to strengthen information sharing, business links and coordination on commercial difficulties.

THE PHILIPPINES
Philippine peso falls to record low against US dollar amidst pressure of high oil prices
(31 August 2026) The Philippine peso fell 37.7 centavos to a record closing low of 62.265 per US dollar on Friday, extending three straight weeks of losses for the peso and surpassing the previous record of 61.888 set the previous day. The peso has lost nearly 8% since the Iran war began on 28 February, with higher oil prices increasing pressure on the Philippines’ import-dependent economy and inflation outlook. The Bangko Sentral ng Pilipinas raised its benchmark interest rate by 25 basis points to 5%, bringing total tightening in the current anti-inflation campaign to 75 basis points, but the currency remained under pressure. The Philippines’ Governor described the increase as pre-emptive, while policymakers forecast average inflation of 6.1% in 2026 and 5.4% in 2027. Citi analysts said external pressures, including higher energy prices, a widening current-account deficit and weaker services balance, could persist, with infrastructure spending expected to keep imports elevated. A weaker peso may increase the local value of remittances and improve export competitiveness, but it will raise import costs and increase peso-denominated repayment costs for foreign-currency debt.

BRUNEI DARUSSALAM, MALAYSIA
Malaysia-Brunei Darussalam bilateral trade reaches MYR 5.86 billion in 2025
(01 September 2026) Brunei Darussalam was Malaysia’s sixth-largest ASEAN trading partner in 2025, with bilateral trade reaching MYR 5.86 billion, while trade totalled MYR .38 billion in January-June 2026. Malaysia’s High Commissioner to Brunei Darussalam highlighted a newly signed memorandum of understanding between the National Chamber of Commerce and Industry of Brunei Darussalam and the National Chamber of Commerce and Industry of Malaysia to strengthen business networks and commercial exchanges. He encouraged Malaysian businesses in Brunei Darussalam to use the platform to identify new opportunities and support bilateral economic growth. Prime Minister Anwar Ibrahim’s 22 August visit to Brunei Darussalam for the 27th Annual Leaders’ Consultation provided the highest-level bilateral platform for both countries to discuss mutual interests and future cooperation. During the visit, Sultan Hassanal Bolkiah conferred the Darjah Kerabat Laila Utama Yang Amat Dihormati (D.K.) on Anwar, which the high commissioner described as reflecting the strength of bilateral relations.

MALAYSIA
Bank Negara Malaysia keeps overnight policy rate at 2.75%, with eye on price stability and continued growth
(03 September 2026) Bank Negara Malaysia (BNM) kept the overnight policy rate (OPR) at 2.75% at its fifth of six scheduled reviews for 2026, in line with expectations from 20 of 22 economists polled by Bloomberg. BNM said the current policy stance remains consistent with continued price stability and sustainable economic growth. Malaysia’s economy expanded 6.0% year-on-year in the second quarter of 2026, accelerating from 5.4% in the first quarter, supported by resilient household spending and strong exports. BNM expects solid momentum to bring 2026 growth to around 5%, with sound fundamentals supporting resilient growth in 2027. The external sector is expected to benefit from improved global prospects, robust demand for electrical and electronics goods, continued strength in technology-related exports and sustained tourist spending. BNM noted that higher costs and strong economic growth are creating increasing inflation pressures. Consumer price increases have so far been contained by domestic policy measures, stable demand and limited spillover from external-sector strength into wages.

THAILAND
Fitch Ratings assessing whether to restore Thailand to stable rating
(03 September 2026) Fitch Ratings is assessing whether Thailand’s improving political and economic conditions justify restoring a stable outlook on its BBB+ sovereign rating, after lowering the outlook nearly a year ago. The senior director of Fitch said the balance of risks has improved, citing greater political stability and economic resilience. Prime Minister Anutin Charnvirakul’s government has consolidated power following February’s election, while periods of political stability have strengthened the credibility of medium-term fiscal plans and potential reforms. Gross general government debt has stabilised at about 60% of GDP, above the 57% median for BBB-rated sovereigns, after rising by about 25 percentage points since 2019. The government expects about USD 12 billion (MYR 48.54 billion) of emergency borrowing linked to the Middle East conflict to remain within its fiscal framework and keep debt below the 70% ceiling. Fitch is likely to raise its 1.8% 2026 growth forecast, supported by fiscal stimulus and stronger investment, while the Ministry of Finance has raised its forecast from 1.6% to 2.5%. Fitch is assessing whether improvements in growth, debt dynamics and the political environment can be sustained over the medium term. Infrastructure improvements and a stronger business climate could support higher growth, although the longer-term economic impact of increased data-centre investment remains uncertain. New revenue measures, including a delayed value-added tax increase, appear unlikely while the government continues to favour stimulus. Fitch’s previous review was published on 24 September 2025, and they did not indicate when the next assessment would take place.

Captures has widened its scope to include news related to all the members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. Besides the ASEAN Member States, this includes Australia, New Zealand, China, Japan, and South Korea. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

ASEAN
ASEAN data centre investments to increase from USD 15.72 billion in 2025 to USD 35.08 billion in 2031
(25 August 2026) According to Chicago-based research firm Arizton, Southeast Asia has 306 operational data centres and 173 in the pipeline, while regional data centre investment is forecast to increase from USD 15.72 billion in 2025 to USD 35.08 billion by 2031, a 14.32% CAGR. Arizton forecasts 1,435 MW of regional capacity and 5.83 million sq ft of white-floor space by 2031. Malaysia has the largest announced pipeline, exceeding 6 GW of IT load, including about 4.0 GW in Johor as of November 2025, of which 700 MW was under construction and 3.3 GW remained planned or announced. Malaysia’s market is forecast to reach USD 11.40 billion and 679 MW by 2031, supported by lower electricity and construction costs than Singapore and investment incentives. However, new data centre tariffs introduced in July 2025 could increase energy costs by 10–14%, with facilities above 100 MW facing an additional USD 15–20 million in annual costs. Singapore has 45 operational data centres and six upcoming facilities, with future development focused on efficiency and density; it also approved a 700 MW low-carbon data centre park on Jurong Island last October. Thailand is forecast to be the fastest-growing market, rising from USD 1.44 billion to USD 6.28 billion by 2031 at 27.78% CAGR, with a pipeline exceeding 2.87 GW and four projects approved for about 376 MW last November. Indonesia is forecast to grow from USD 2.82 billion to USD 6.09 billion by 2031 and has 88 operational and 25 upcoming facilities, with Batam attracting cloud and AI infrastructure investment including a planned 360 MW Firmus facility. Arizton expects regional AI computing requirements to increase nearly tenfold by 2030, driving capacity to almost triple, while submarine connectivity is also expanding across Singapore, Indonesia and Malaysia.

VIET NAM, AUSTRALIA
Viet Nam and Australia focusing on strengthening bilateral trade and investments
(26 August 2026) The Australia-Vietnam Policy Institute Forum in HCM City on 25 August focused on strengthening bilateral trade and investment to support Viet Nam’s rapid growth agenda. The Australian Consul-General said Viet Nam recorded 8% growth in 2025 and is shifting towards innovation-led growth, with Resolution 10 prioritising high-quality investment, skills development, technology transfer and national resilience. Australia aims to become a trusted long-term economic partner and identified the Australia-Vietnam Comprehensive Strategic Partnership and South-East Asia Economic Strategy to 2040 as key policy frameworks for deeper cooperation. The Permanent Vice Chairman of the HCM City People’s Committee, said leaders reaffirmed bilateral priorities in the economy, trade, investment, and science, technology and innovation during General Secretary To Lam’s 9–12 August visit to Australia. The Vice Chairman said the National Assembly’s passage of the Urban Development Law on 24 August provides a legal framework to mobilise domestic and international resources for urban and special economic zone development, potentially supporting greater Australian investment in HCM City.

VIET NAM, MYANMAR
Viet Nam and Myanmar agree to raise bilateral trade to USD 1 billion from USD 591 million in 2025
(27 August 2026) Viet Nam and Myanmar agreed to raise bilateral trade to USD 1 billion from USD 591 million in 2025, an increase of about 69%, during the Vietnamese Foreign Minister’s visit to Naypyidaw. Two-way trade reached USD 395 million in the first seven months of 2026, up 25% year on year, indicating a recovery from USD 591 million in 2025 and USD 873.9 million in 2018. The two countries had previously approached the USD 1 billion target, with trade reaching USD 952 million in 2019. Myanmar pledged favourable conditions for Vietnamese companies, particularly in telecommunications, education and training, agriculture and food processing. Vietnamese firms already operating in Myanmar include Mytel, BIDV and Hoang Anh Gia Lai. The two sides also agreed to simplify customs procedures and expand cooperation in telecommunications, agriculture and digital transformation. They will reconvene their Joint Committee on Bilateral Cooperation in 2027, the first such meeting since 2019. Myanmar President Min Aung Hlaing thanked Viet Nam for supporting Myanmar’s cooperation with ASEAN. The visit was Le Hoai Trung’s first bilateral visit to Myanmar since the 2021 military takeover.

MALAYSIA
Malaysia mulling regulations for e-commerce platforms, including registration requirements
(26 August 2026) Malaysia is considering immediate measures to regulate e-commerce platforms, including a registration requirement, following complaints from users and merchants. Malaysia’s Communications Minister said on 26 August that some platforms operating in Malaysia have not registered their companies locally, although he did not identify them. Prime Minister Anwar Ibrahim instructed the Finance and Communications Ministries to examine regulatory measures during a Cabinet meeting. Malaysia’s internet regulator has received 1,964 complaints about e-commerce platforms since January 2025, covering scams, electrical and electronic products, and halal certification issues. Fahmi said enforcement would begin immediately but did not provide details of the proposed measures. Popular platforms in Malaysia include Shopee, TikTok Shop and Lazada.

MALAYSIA
Business confidence for third quarter of 2026 improves to 5.9% from -1.8% in previous quarter
(27 August 2026) The Department of Statistics Malaysia (DOSM) reported that business confidence for 3Q2026 improved to 5.9%, from negative 1.8% in 2Q2026, with all major sectors recording stronger readings except for a slight easing in services. Industry posted the largest improvement, rising to 8.2% from negative 3.7%, while construction moved to 4.1% from negative 9.5% and wholesale and retail trade to 1.2% from negative 7.5%. Services remained positive at 5.2%, compared with 6.2% previously. The overall six-month outlook also strengthened, with the net balance increasing to 12.9% from 7.9%. Construction had the strongest six-month outlook at 23.3%, followed by industry at 14.3%, services at 13.1% and wholesale and retail trade at 5.3%. For 3Q2026 revenue, 31.9% of businesses expect an increase, 47.4% expect no change, and 20.7% anticipate a decline. Employment expectations remained broadly stable, with 78.3% of businesses expecting no change in workforce, while 13.9% plan to increase hiring and 7.8% expect reductions. At the state level, Terengganu recorded the highest confidence reading at 10.5%, followed by Kuala Lumpur at 9.5% and Negeri Sembilan at 9.4%. Melaka and Labuan were the only states with negative readings, at negative 3.9% and negative 5.4% respectively.

THAILAND
Bank of Thailand keeps policy rate unchanged at 1.00% on 26 August
(26 August 2026) The Bank of Thailand’s monetary policy committee unanimously kept its policy rate at 1.00% on Wednesday, marking the third consecutive meeting without a change. The decision reflects subdued domestic demand, high household debt and weak, below-potential growth, which give policymakers scope to prioritise economic recovery despite higher energy costs linked to the Middle East conflict. The BOT said exports and investment have benefited from the technology and artificial-intelligence cycle, but these gains rely heavily on imported inputs and have limited spillovers to the wider economy. The central bank forecasts GDP growth of 2.3% in 2026 and 1.8% in 2027. It now expects headline inflation to be lower than previously assessed because of fluctuations in global energy prices, compared with earlier forecasts of 2.8% in 2026 and 1.4% in 2027. The BOT will monitor the Middle East conflict, the extent to which businesses pass higher costs to consumers and medium-term inflation expectations. The committee said the current 1.00% rate remains appropriate to support economic recovery. Capital Economics expects rates to remain unchanged for the rest of 2026, with easing potentially resuming in 2027 if inflation declines as forecast.

THE PHILIPPINES
Companies adjusting as inflation and weak growth pressures consumer spending
(26 August 2026) Philippine companies are adjusting pricing, product inputs, expansion and promotions as inflation, a weak peso and subdued growth pressure consumer spending. Shakey’s Pizza Asia Ventures reported a one-third decline in first-half profit and is slowing expansion, becoming more selective on investment and restructuring its Peri-Peri chicken chain. Jollibee Foods cut its same-store sales, profit-growth and outlet-opening forecasts despite improved customer visits in April–June, while retaining lower-priced Mix & Match meals and implementing a PHP 2.8 billion-peso cost-containment programme. Monde Nissin is switching to lower-cost ingredients and staggering 1–5% price increases by product. Century Pacific Food raised prices 4–5% after holding them unchanged for two years and plans smaller increases in the third quarter. San Miguel Food and Beverage is controlling costs, expanding capacity where demand is stronger, and maintaining lower-priced food lines. PLDT’s Smart Communications increased selected prepaid packages to PHP 109 from PHP 99 while adding data and benefits, while PLDT Home introduced additional lower-cost broadband speed options. Globe Telecom is using free service periods, speed upgrades, and targeted discounts, including 30 days free, triple speeds and PHP 100 discounts for selected customers. Philippine Seven expects to benefit from consumers shifting towards cheaper products and nearer stores, and is expanding provincial branches while increasing its focus on ready-to-eat food and proprietary drinks.

Captures has widened its scope to include news related to all the members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. Besides the ASEAN Member States, this includes Australia, New Zealand, China, Japan, and South Korea. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

ASEAN
Viet Nam surpasses Thailand to become ASEAN’s second-largest aviation market in August 2026
(16 August 2026) Viet Nam became Southeast Asia’s second-largest aviation market for the second consecutive month, with 7.3 million scheduled seats in August, surpassing Thailand’s 7.2 million, according to British aviation analytics firm OAG. Indonesia remained the largest market with around 11 million seats, up 4.3% year-on-year. Southeast Asia’s total airline capacity reached around 51 million seats, an annual increase of 0.8%. Malaysia ranked fourth with 5.4 million seats, followed by the Philippines with 4.8 million. Indonesia also remained the region’s largest domestic market, with 8.8 million seats, up 5.4% year-on-year. Viet Nam recorded the fastest capacity growth among the five largest markets at 10%, while Thailand, Malaysia and the Philippines declined 1.7%, 6.5% and 5.7%, respectively. Lion Air was scheduled to provide around 2.33 million seats, ranking third in Southeast Asia behind Vietnam Airlines and AirAsia, although its capacity fell 11.1% year-on-year. Batik Air was among the airlines supporting growth in the region’s full-service segment. International capacity from Southeast Asia to Europe and North America increased 10.8% and 9%, respectively, while capacity to the Middle East declined 4.6%.

MYANMAR
Myanmar President Min Aung Hlaing departs for Russia on 17 August for first official visit
(17 August 2026) Myanmar President Min Aung Hlaing departed for Russia on 17 August for his first official visit since assuming the presidency in April. The visit includes a Myanmar-Russia business forum attended by the chief minister of Tanintharyi region and the head of Myanmar’s aerospace agency. Russia is seeking to expand energy investments in Myanmar following a 2025 agreement to build a small-scale nuclear power plant and a February 2025 memorandum on investment cooperation for the Dawei Special Economic Zone covering a port and oil refinery. The visit marks Min Aung Hlaing’s fifth foreign trip as president, following visits to India, China, Lao PDR and Thailand. Defence cooperation has continued to deepen, with Russia providing military training, university scholarships and arms supplies, while earlier this year agreeing to help train Myanmar’s first cosmonaut.

THAILAND
Economy grows 1.9% year-on-year in April-June quarter, marking weakest growth in three quarters
(17 August 2026) Thailand’s economy grew 1.9% year-on-year in the April-June quarter, slowing from 2.8% in the previous quarter and marking its weakest growth in three quarters, according to the NESDC. Growth was supported by strong electronics exports linked to global demand for AI-related products and a government shopping subsidy, while higher energy prices and disruptions to travel weighed on activity. Private consumption growth slowed to 1.9% from 3.3%, while private investment accelerated to 13.4% from 10.1%. Government investment contracted 1.6% after expanding 9.4% in the first quarter. Foreign tourist arrivals totalled 18.4 million in January-July, down 3% year-on-year, with arrivals from the Middle East, Europe and nearby markets affected by flight cancellations. The NESDC raised its full-year growth forecast to 2.0%-2.5% from 1.5%-2.5%, but said uncertainty remained, particularly over the Middle East conflict and energy prices. Economists state that second-half growth will be difficult to predict. In comparison, second-quarter growth slowed in Indonesia to 5.29% from 5.61% and the Philippines to 2.3% from 2.8%, while Singapore grew 5.9%, Viet Nam 8.4% and Malaysia 6.0%.

MALAYSIA
Inflation eases to 1.8% year-on-year in July 2026 from 1.9% in June
(17 August 2026) Malaysia’s inflation eased to 1.8% year-on-year in July 2026 from 1.9% in June, with the Consumer Price Index rising to 137.1 points from 134.7 a year earlier, according to DOSM. Transport remained the main contributor, although its inflation rate slowed to 1.4% from 2.8%. Inflation also moderated in personal care, social protection and miscellaneous goods and services to 2.9%, restaurant and accommodation services to 2.0%, and insurance and financial services to 1.1%. In contrast, information and communication inflation rose to 3.4% from 2.4%, while food and beverages and housing, water, electricity, gas and other fuels increased to 1.8% from 1.4%. Of 573 items, 374 or 65.3% recorded price increases, with 367 registering increases of 10% or less, while 157 items declined and 42 were unchanged. Seven states recorded inflation above the national rate, led by Negeri Sembilan at 2.5%, followed by Kedah and Pahang at 2.3% each and Kuala Lumpur at 2.2%. Month-on-month headline inflation was unchanged in July, while food and beverages inflation increased 0.3%.

VIET NAM
Viet Nam accelerates preparations for 6G, including global standard-setting and domestic tech development
(17 August 2026) Viet Nam is accelerating preparations for 6G, with the Ministry of Science and Technology establishing a steering committee to support early participation in international standard-setting, domestic technology development and eventual deployment. The deputy director of the Vietnam Telecommunications Authority said it took Viet Nam more than eight years to master 4G technology and produce equipment after the 4G standards were issued, with this period shortened to about two years for 5G. By early 2026, Viet Nam had deployed more than 40,000 5G base stations covering 90% of the population, including about 250 stations using equipment designed and manufactured domestically. The government plans to increase the use of Vietnamese-made telecommunications equipment and raise the domestic share of research, development and technology products. Viettel has become the first global partner in Qualcomm Technologies’ 6G Early Access Program, with the companies targeting the first pre-commercial 6G call in early 2029 using Viettel-developed and manufactured systems and equipment. Under its digital infrastructure plan, Viet Nam aims for nationwide fibre-optic access at speeds of at least 1Gbps by 2030, 99% 5G population coverage and readiness to conduct 6G network trials.

VIET NAM, THE PHILIPPINES
Semiconductor boom pushes Viet Nam and the Philippines closer to ‘high-income’ status
(19 August 2026) Viet Nam and the Philippines entered the World Bank’s upper-middle-income category in July, with the next challenge being a shift from low-cost manufacturing towards higher-value industries. The World Bank defines the category as 2025 per-capita GNI of USD 4,636–USD 14,375, with Viet Nam and the Philippines approaching Indonesia in GNI. Viet Nam is expanding its semiconductor industry through foreign investment, including LG Innotek’s planned USD 1 billion semiconductor substrate plant, while Samsung Electronics and Intel are reportedly expanding or establishing facilities. Domestic firms Viettel and FPT are also considering semiconductor production, with Viet Nam targeting domestic capabilities spanning chip assembly, front-end processing, design and development. The government plans to train 50,000 semiconductor professionals by 2030 and upgrade related education, with former Prime Minister Pham Minh Chinh having stated in August 2025 that Viet Nam should be able to design, manufacture and test semiconductors by no later than 2027. The Philippines is upgrading its semiconductor sector, which is concentrated on back-end processes, and joined the US-led Pax Silica initiative in April; semiconductors and other electronics account for more than 50% of its goods exports by value.

CAMBODIA
Malaysia-Cambodia bilateral trade increases 51.1% year-on-year in first half of 2026
(17 August 2026) Malaysia-Cambodia bilateral trade increased 51.1% year-on-year to MYR 3.32 billion in the first half of 2026, while Malaysian exports to Cambodia rose 40.9% to MYR 2.45 billion, led by petroleum products, metal manufactures, textiles, apparel and footwear, chemicals and processed food. Matrade is leading 26 Malaysian companies on an Export Acceleration Mission to Phnom Penh from 18–21 August, covering food and beverages, fast-moving consumer goods, automotive parts and components, and lifestyle products. The CEO of Matrade said the delegation is nearly three times larger than the nine-company mission in 2025, which generated MYR 41.3 million in export sales through 104 B2B meetings, exceeding its MYR 34 million target. The 2026 mission is intended to secure new business opportunities, diversify export markets, and strengthen commercial links between Malaysian companies and Cambodian buyers, importers, and distributors. The mission includes a business seminar to be officiated by Cambodia’s Minister of Commerce, with speakers from the Ministry of Commerce, General Department of Customs and Excise, and Malaysian Business Chamber in Cambodia covering regulations, customs procedures, market trends and business opportunities. Participating companies will also hold pre-arranged B2B meetings and visit key commercial and distribution hubs in Phnom Penh.

Captures has widened its scope to include news related to all the members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. Besides the ASEAN Member States, this includes Australia, New Zealand, China, Japan, and South Korea. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

ASEAN
Palm oil harvesting in Malaysia and Indonesia disrupted by higher fuel costs
(07 August 2026) Palm oil harvesting in Malaysia’s Sabah and Sarawak states and Indonesia’s Sumatra is being disrupted by higher fuel costs and diesel supply shortages, reducing fruit collection and raising concerns over lower output. In Sabah and Sarawak, where 43.9% of Malaysia’s 20.28 million tonnes of crude palm oil output was produced in 2025, unsubsidised diesel prices have risen almost 120%, while the subsidised allocation of 200 litres per month remains below farmers’ estimated operational requirement of at least 500 litres. The Sarawak Dayak Oil Palm Planters Association said harvesting frequency has fallen from around 2.5 rounds per month to about 1.5 rounds, increasing the risk of abandoned fields and lower productivity. The association estimated harvesting delays could reduce Sarawak’s yields by 15% to 20%. Smallholders in Sabah and Sarawak also reported higher costs for transport, power generators and machinery, and called for revisions to diesel subsidy policies. In Indonesia, where Sumatra accounts for 55% of national palm oil output, diesel shortages since mid-July have disrupted fruit transportation, forcing farmers to extend harvesting intervals to eight to 12 days from the usual eight to 10 days. The disruptions coincide with palm oil futures rising more than 15% this year and concerns that an expected El Niño event later in 2026 could further reduce yields. Industry representatives warned that prolonged harvesting disruptions could weaken palm oil production in both countries.

VIET NAM
Government seeks 30% reduction in income tax for small firms and household businesses
(10 August 2026) Viet Nam’s government plans to seek parliamentary approval this month for a 30% reduction in income tax for household businesses, individual business operators and micro-enterprises with annual revenue of up to VND 10 billion (USD 380,000). The proposed measure would apply during 2026 and 2027. According to a government statement, the tax cut is intended to encourage household businesses, individual operators and small and medium-sized enterprises to expand production and business activities. The government said the proposal is part of efforts to support economic growth. The measure aligns with Viet Nam’s objective of achieving annual GDP growth of more than 10% for the remainder of the decade.

VIET NAM
Shein significantly scales back Viet Nam expansion plans due to changes in US trade policy
(10 August 2026) Shein has significantly scaled back its Viet Nam expansion plans, reducing its leased warehouse space near Ho Chi Minh City from 15 hectares to approximately 6 hectares, according to sources familiar with its operations. The bonded logistics hub, previously the largest of its kind in Viet Nam and employing thousands of workers, began mass layoffs in April, with some teams retaining only one-quarter of their staff. Sources indicated that only a third of the originally planned site is currently in use. The retrenchment follows changes in US trade policy, including the termination of the US de minimis duty-free exemption for shipments under USD 800 from all countries in 2025 and a reduction in the tariff advantage previously enjoyed by Vietnamese-made apparel over Chinese products. Additional US tariffs of 12.5% imposed last month on imports from both China and Viet Nam over alleged forced-labour compliance issues further weakened the rationale for relocating production to Viet Nam. Sources also cited operational challenges in Viet Nam, including lower labour efficiency and difficulties replicating Shein’s highly flexible Chinese supply chain. Several suppliers that had established operations in Viet Nam have reportedly returned production to China. Guangzhou authorities reportedly discouraged significant order transfers out of the region in mid-2025, while the chief executive of Shein pledged more than CNY 10 billion (USD 1.5 billion) in February to develop a smart supply-chain system in Guangdong. Shein’s draft prospectus showed a 14% decline in US revenue in the first quarter following the end of the de minimis exemption. Suppliers reported stagnant or only modest order growth, while some have shifted business to platforms such as Temu and Amazon or ceased working with Shein due to low margins and small order volumes.

THE PHILIPPINES
Philippines’ central bank prepared to tighten monetary policy further despite weak growth
(10 August 2026) Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona said the central bank is prepared to tighten monetary policy further, “as much as necessary”, to return inflation to its target level. Remolona stated that while the economy can withstand additional interest rate increases, weaker-than-expected economic growth in the second quarter has reduced pressure for further tightening. The BSP has already raised interest rates by 50 basis points this year and is scheduled to hold its next policy meeting on 27 August. Remolona reiterated that the BSP’s primary mandate is price stability, with economic growth viewed as a consequence of achieving that objective. He acknowledged short-term growth challenges but maintained the focus on reducing inflation. Although inflation eased further in July, it remains above the central bank’s 3% target for the year. The Deputy Governor of the BSP said core inflation, which excludes certain food and energy items, may have already plateaued. The Philippines recorded the weakest April–June economic growth among Southeast Asian economies that have reported second-quarter data. Elevated inflation and weak investment conditions continue to weigh on economic activity.

INDONESIA
Indonesia’s Consumer Confidence Index declines in July for third consecutive month
(10 August 2026) Indonesia’s Consumer Confidence Index declined to 116.8 in July from 117.8 in June, according to Bank Indonesia, marking a third consecutive monthly decline. The July reading was the lowest since September 2025, when the index stood at 115. This is the first instance of three successive monthly declines in consumer confidence since March 2025. Bank Indonesia did not specify reasons for the latest decrease but stated that consumer confidence in economic conditions remains stable. The central bank said consumer optimism continues to be supported by positive perceptions of current economic conditions and expectations for future economic conditions.

SINGAPORE
Government raises 2026 GDP growth forecast to 4.5% to 5.5%
(11 August 2026) Singapore’s Ministry of Trade and Industry raised its 2026 GDP growth forecast to 4.5–5.5% from 2–4% following stronger-than-expected first-half economic performance and a stronger global AI investment boom. Singapore’s economy grew 5.9% year-on-year in Q2 2026, slightly above the 5.7% advance estimate, while quarter-on-quarter growth reached 1.4%, bringing first-half GDP growth to 6.1%. Singapore’s Permanent Secretary for Trade and Industry said AI-related capital expenditure and demand had exceeded expectations and were supporting production and exports across technology-linked economies. Manufacturing expanded 12.5% year-on-year in Q2, driven by electronics and precision engineering demand linked to AI, while wholesale trade grew 8.3% and finance and insurance rose 6.2%, supported by stronger machinery and electronics sales, lending activity, fee income and fund management commissions. Chemicals and biomedical manufacturing recorded a second consecutive quarterly contraction, while food and beverage services declined due to higher outbound travel and lower visitor arrivals. The government said the impact of the Middle East conflict had been less severe than initially expected, although elevated energy and input costs are likely to persist through the remainder of 2026. Singapore does not currently expect significant effects from the 12.5% US tariff on exports, which affects about one-third of exports to the US, equivalent to approximately SGD 9.4 billion annually. Core inflation is expected to remain within 1.5–2.5%, with fuel, fertiliser and food prices posing greater inflation risks than AI-related investment. Maybank raised its 2026 GDP forecast to 5.2% from 4.8%, while UOB increased its forecast to 5.0% from 4.8%. RHB maintained a 4.5% forecast, citing risks from geopolitical tensions, US trade policy and a potential slowdown in AI-related investment.

THAILAND, MYANMAR
Thailand and Myanmar expanding energy cooperation, including in natural gas and petroleum
(11 August 2026) Thailand and Myanmar are expanding energy cooperation, including plans to extend natural gas supply contracts and explore investment in new petroleum resources, as Thailand seeks to diversify energy sources and reduce supply risks. Thailand’s Energy Minister and relevant agencies recently held discussions with Myanmar’s Union Minister for Electricity and Energy on natural gas exploration and production, gas trading and electricity-grid connectivity. The talks covered extensions of contracts for gas fields approaching the end of their current terms and potential investment in new resources, including the A6 field, which could supply gas to Thailand through existing pipeline infrastructure. A Thai government spokeswoman said Myanmar has been a key gas supplier to Thailand for nearly 40 years, with the Yadana and Zawtika fields previously meeting 15–20% of Thailand’s natural gas demand. Thailand and Myanmar are also expected to prepare a new memorandum of understanding on energy cooperation to provide a framework for future collaboration. The Thai government said the cooperation would strengthen energy security, provide additional supply options, reduce dependence on any single source and help manage electricity and production-cost risks that affect economic competitiveness. The Thai government also defended continued engagement with Myanmar, stating that bilateral relations involve security, economic, social and energy considerations.

Captures has widened its scope to include news related to all the members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. Besides the ASEAN Member States, this includes Australia, New Zealand, China, Japan, and South Korea. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

ASEAN
Southeast Asia’s manufacturing sector strengthens in July 2026
(03 August 2026) Southeast Asia’s manufacturing sector strengthened in July, with the S&P Global ASEAN Manufacturing PMI rising to 52.8 from 50.5 in June, the highest level since the Middle East conflict began and above the 50-point expansion threshold. Growth in new orders and production accelerated to their fastest pace since the start of the conflict, while firms increased purchasing activity and employment. Business confidence improved, with manufacturers reporting their strongest optimism for production growth in more than three years. Thailand recorded the highest PMI reading in the region at 54.2, followed by Vietnam at 52.9, while all ASEAN economies remained in expansionary territory except Myanmar, which registered 49.3. An economist for S&P Global Market Intelligence said the sector had moved beyond the weaker March–June period and returned to activity levels comparable with the start of the year, although still below February’s record high.

MALAYSIA
Malaysia assessing whether to lift moratorium on exports of unprocessed rare earths
(03 August 2026) Malaysia is assessing whether to partially lift its 2024 moratorium on exports of unprocessed rare earths as it seeks to strengthen its position in global critical minerals supply chains. Malaysia’s Deputy Minister of Natural Resources and Environmental Sustainability said pressure for policy changes is coming from Malaysian states and investors, with interest from the US, Australia, France and India. Any future exports would be subject to conditions including inbound investment commitments, technology transfers and use for research and development activities outside Malaysia. The deputy minister said Malaysia aims to become a regional critical minerals hub by 2030 and is seeking investment across the value chain, from mining to downstream processing. Malaysia holds 16.1 million tonnes of inferred rare earth reserves, previously valued by the government at MYR 970 billion, although much of the resource is located in protected forest areas. The government is mapping deposits and studying extraction methods that minimise biodiversity impacts. Malaysia’s recognised reserves account for around 1% of global reserves, compared with more than 50% for China, but the sector has attracted growing foreign interest. Australia’s Lynas Rare Earths, which operates a refining facility in Malaysia, has expressed interest in local deposits, while France’s Carester SAS plans a rare-earth separation plant in Perak through a venture with Malaco Mining Group. The deputy minister said Malaysia would continue engaging Chinese companies for potential technology sharing despite limited progress in expanding Chinese participation in the sector.

MALAYSIA
AI infrastructure boom sees more Malaysian companies in Forbes Asia’s 2026 Best Under A Billion list
(04 August 2026) Forbes Asia’s 2026 Best Under A Billion list includes 200 top-performing listed small and mid-sized companies across the Asia-Pacific region, with Malaysian representation more than doubling to 19 companies. Forbes Asia stated that more than half of the Malaysian firms on the list benefited from the country’s artificial intelligence infrastructure expansion. The publication noted that companies featured on the list have navigated geopolitical tensions and volatile energy markets, with many aligned to technology-related growth and the global AI boom. China had the highest number of companies on the list with 28, followed by India with 27. Malaysian cable manufacturer Southern Cable Group made its debut on the list, supported by demand from the data centre industry, which contributed 15% of its MYR 1.8 billion revenue in 2025. The ranking selected 200 companies from approximately 19,000 publicly listed firms in the Asia-Pacific region with annual sales between USD 10 million and USD 1 billion. Software companies and suppliers of semiconductor-related electronic components and tools accounted for 25% of qualifying firms. Forbes Asia also highlighted companies benefiting from growing adoption of electric vehicles and renewable energy through the provision of specialised equipment and services.

VIET NAM
Viet Nam records trade deficit of USD 3.59 billion in July 2026
(03 August 2026) Viet Nam recorded a trade deficit of USD 3.587 billion in July, widening from USD 2.64 billion in June, as imports continued to outpace export growth. July exports increased 25% year-on-year to USD 53 billion, while imports rose 41% to USD 56.67 billion. For January–July, exports grew 21.7% to USD 320 billion and imports surged 34.8% to USD 340 billion, resulting in a trade deficit of USD 20.5 billion, exceeding the previous full-year record deficit of about USD 18 billion in 2008. Foreign direct investment inflows during the first seven months of the year rose 11.8% year-on-year to USD 15.2 billion. Consumer price inflation eased to 4.45% in July from 4.69% in June, remaining close to the government’s 2026 target of 4.5%. Industrial production expanded 14.5% year-on-year in July, while retail sales also increased 14.5%. Higher fuel costs continued to contribute to import growth, with crude oil import volumes falling 11.9% but values rising 18%, while refined fuel imports increased 6% in volume and 67.6% in value. The data comes as Viet Nam pursues economic growth of more than 10% this year while facing a widening trade deficit, inflationary pressures and a new 12.5% US tariff imposed on 24 July under a Section 301 forced labour investigation, which Hanoi has rejected.

THAILAND
Thailand’s economic activity remains broadly stable in June 2026
(03 August 2026) Thailand’s economic activity remained broadly stable in June, with stronger private consumption and exports offsetting weaker manufacturing output and tourism-related services, according to the Bank of Thailand. Private consumption increased 1.1% month-on-month, supported by government measures and higher spending on consumer goods, while electric vehicle sales rose amid elevated fuel prices and increasing demand for green mobility. Private investment grew 0.5%, supported by higher exports of technology-related goods linked to the global electronics cycle and data centre investment. Manufacturing output declined due to reduced petroleum production during partial refinery maintenance shutdowns and lower production of non-electric vehicles. Tourism-related activity weakened as both tourism receipts and foreign visitor arrivals fell, particularly from short-haul markets, reflecting weaker demand and reduced flight services amid higher energy costs. The Assistant Governor of the Bank of Thailand said Thailand’s economy softened in the second quarter of 2026 compared with the previous quarter, largely because of higher energy prices and travel disruptions associated with the Middle East conflict. The central bank expects growth to continue, supported by exports, electronics-sector investment and government consumption-support measures. Key risks identified include geopolitical tensions, global trade policies, the recovery of the tourism sector, the impact of government policies and El Niño weather conditions.

THE PHILIPPINES
Lending growth among universal and commercial banks slows to 9.8% year-on-year in June 2026
(03 August 2026) Bank lending growth among Philippine universal and commercial banks slowed to 9.8% year-on-year in June 2026 from 12.1% in May, according to Bangko Sentral ng Pilipinas data. Business lending growth eased to 9.2% from 11.7%, reflecting more cautious corporate borrowing. Credit expansion remained concentrated in real estate, energy utilities, wholesale and retail trade, manufacturing, transport and agriculture. Overall growth was constrained by weaker borrowing in the construction, education and other services sectors. Consumer lending growth also moderated to 17.8% in June from 19.0% in May, driven by slower growth in credit card balances and motor vehicle loans. Total outstanding loans to resident corporate entities and individuals increased 10.3% year-on-year and continued to account for the majority of bank credit. The central bank said it would continue to align lending conditions with its mandate to maintain price and financial stability while monitoring credit growth as a key monetary policy transmission channel.

SINGAPORE
Singapore records 4,500 retrenchments in the April-June 2026 period
(03 August 2026) Singapore recorded 4,500 retrenchments in April–June 2026, up 17% from the previous quarter and the highest quarterly total in more than five years, according to preliminary Ministry of Manpower data. The increase was concentrated in outward-oriented sectors, particularly information and communications and manufacturing, and was mainly driven by business restructuring. The ministry said the rise remained below retrenchment levels seen during the 2009 Global Financial Crisis and the Covid-19 pandemic. Overall labour market conditions remained resilient, with employment increasing by 10,700 during the quarter and unemployment holding at around 2%. Singapore’s economy expanded 5.7% year-on-year in the second quarter, compared with 6.3% in the previous quarter, but remained above the government’s full-year forecast. Labour market sentiment improved in June, with 43.9% of surveyed firms expecting to increase headcount over the next three months, up from 40.6% in May. The proportion of firms planning wage increases rose to 29.3% from 23.7%, while those expecting layoffs fell to 2.7% from 3.2%. The ministry said the data indicated continued labour demand, although hiring and wage expectations remained below February levels and suggested businesses would adopt a cautious approach to workforce and pay decisions in the near term.

Captures has widened its scope to include news related to all the members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. Besides the ASEAN Member States, this includes Australia, New Zealand, China, Japan, and South Korea. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

ASEAN, UNITED STATES
United States positioning itself as energy partner of choice for Southeast Asia
(29 July 2026) The United States announced a USD 1.5 billion financing commitment through the International Development Finance Corporation (DFC) on 22 July to support energy infrastructure across the Indo-Pacific, described as the largest project investment in the agency’s history. The announcement was made during US Secretary of State Marco Rubio’s visit to Manila for the ASEAN foreign ministers’ meeting, and was accompanied by a broader USD 2.5 billion investment commitment covering energy security and future technologies. The US Ambassador to ASEAN said Washington intends to expand engagement on energy security by offering US liquefied natural gas (LNG), grid technologies and cooperation on small modular nuclear reactors (SMRs), while supporting initiatives such as strategic petroleum reserves. Analysts said the funding is intended to mobilise private capital rather than provide direct grants to ASEAN governments and remains an investment platform rather than a portfolio of approved projects. Discussions have reportedly begun with Viet Nam on grid modernisation and Indonesia on energy security, while the Philippines is considered the most advanced potential project location through a fuel terminal at Subic Bay operated by DFC partner I Squared Capital. Analysts noted that the initiative could help diversify Southeast Asia’s energy sources and reduce exposure to supply disruptions, but cautioned that transmission constraints, regulatory uncertainty, project execution challenges and continued dependence on fossil fuels remain significant issues. The US is also promoting SMR cooperation with ASEAN governments, following a trilateral SMR agreement with Japan and South Korea earlier this month. Analysts highlighted potential applications for SMRs in Indonesia and the Philippines due to their dispersed island grids, and in Malaysia and Thailand to support growing data centre and artificial intelligence-related electricity demand. However, regulatory approvals, financing and public acceptance are expected to determine the pace of deployment.

ASEAN, UNITED STATES
US imposes new tariffs of 10-12.5% on seven ASEAN economies citing forced labour practises
(26 July 2026) The US imposed new Section 301 tariffs of 10-12.5% on 60 economies, including seven Southeast Asian countries, citing forced labour practices identified in recent investigations. Among ASEAN members, the Philippines, Singapore, Thailand and Viet Nam face the highest tariff rates, while Malaysia, Indonesia and Cambodia received lower rates after being assessed as having made greater enforcement efforts. The US Trade Representative said the measures were intended to address human rights abuses and trade distortions. The tariffs were announced one day after US Secretary of State Marco Rubio told ASEAN foreign ministers in Manila that the US was “with ASEAN 100 per cent”, prompting analysts to highlight a disconnect between US diplomatic messaging and trade actions. ASEAN governments, including the Philippines, Singapore and Indonesia, reiterated their opposition to forced labour and stated that they would continue engagement with Washington. Exemptions apply to semiconductor-related components and products already covered by existing tariffs, including automobile parts. Analysts said the measures are unlikely to trigger retaliation from ASEAN countries but may reinforce perceptions of the US as an unreliable economic partner. Economic impacts are expected to vary, with Viet Nam and Cambodia considered more exposed because exports to the US account for a larger share of GDP. Thailand could face greater pressure as key exports such as frozen seafood, rubber products and household appliances are not exempt. Despite the tariffs, analysts expect ASEAN countries to continue pursuing dialogue with the US, given its importance as a trade destination and source of foreign direct investment.

VIET NAM, UNITED STATES
US customs officials conduct spot checks at China-linked factories in Viet Nam over transshipment concerns
(28 July 2026) US customs officials have conducted spot inspections at China-linked factories in Viet Nam, reviewing documents, raw material sourcing, production processes and potential software intellectual property violations to assess the extent of value added before exports to the US. The inspections have heightened concerns that Washington could impose additional tariffs on Viet Nam, although officials have reportedly not found significant evidence of Chinese goods being illegally transshipped through the country. The inspections come as Viet Nam and the US continue difficult negotiations on a trade framework agreement reached in October, with disagreements centred on transshipment and other non-tariff barriers. Viet Nam has intensified efforts to address US concerns over trade fraud and intellectual property protection, including the seizure of 50,000 counterfeit Nike products and the submission of a 3,581-page report to the US Trade Representative detailing nearly 20,000 infringement cases handled between 2021 and 2025. Viet Nam is also facing three separate Section 301 investigations by the US, including probes into alleged intellectual property violations, excess manufacturing capacity, and allegations of forced labour in the supply chains. The US is seeking commitments beyond reducing the USD 178 billion bilateral trade gap, including stronger action on transshipment, economic security cooperation and intellectual property protection. Additional pressure emerged after Viet Nam was included among 60 economies subjected to new US tariffs over alleged shortcomings in preventing forced labour in supply chains, a claim rejected by Viet Nam’s foreign ministry.

VIET NAM
Viet Nam seeking USD 76 billion a year from capital markets to reduce reliance on banking
(29 July 2026) Viet Nam approved a comprehensive financial-market reform programme on 27 July, consolidating reforms across banking, equities, bonds, insurance and emerging financial products into a single framework extending to 2045. The programme aims to reduce reliance on bank lending by increasing capital-market fundraising to an average of VND 2 quadrillion (USD 75.95 billion) annually by 2030 and raising capital markets’ share of realised social investment to 30–35% between 2031 and 2045. Businesses are targeted to raise VND 5.4 quadrillion through the stock market during 2026–2030, while stock-market capitalisation is projected to reach 120% of GDP by 2045 from 82.3% at end-2025. Outstanding bond value is targeted to increase to 60% of GDP by 2030 from 30.7% in 2025. Planned measures include encouraging listings of foreign-invested companies, accelerating state divestments, introducing new derivatives products, launching a central counterparty clearing mechanism in 2027, piloting crypto-asset and carbon-credit markets, establishing a trading platform for innovative start-ups, and exploring a gold exchange and central bank digital currency. The programme also calls for full Basel III adoption, wider use of artificial intelligence in banking, expansion of insurance as a long-term funding source, and allowing insurers to invest in infrastructure bonds and real estate investment trusts. Bond issuance will be diversified through green, sustainability-linked and floating-rate instruments. By 2030, the government targets foreign investors’ capital-market assets at around 15% of GDP, stock investment fund assets at 5% of GDP, and pension fund assets to grow by an average of 11.5% annually between 2026 and 2030, alongside easier market access for foreign investors.

MALAYSIA
OECD encourages Malaysia to reintroduce GST and phase out fuel subsidies
(28 July 2026) The OECD’s latest Economic Survey of Malaysia recommends that Malaysia reintroduce the Goods and Services Tax (GST), broaden the personal income tax base, strengthen tax administration and gradually phase out fossil fuel subsidies to reinforce fiscal sustainability as the country approaches high-income status. The report recommends replacing broad energy subsidies with targeted cash transfers and adopting carbon pricing while using the government’s social registry to protect vulnerable households. The OECD said Malaysia’s tax revenue remains below 13% of GDP and that a broad-based consumption tax would provide a more stable revenue source to support higher spending on education, social protection, public investment and an ageing population. It projects Malaysia’s GDP growth at 4.9% in 2026 and 5.0% in 2027, with inflation at 2.1% this year, but warned that elevated public debt and gradual fiscal consolidation leave the country exposed to external shocks, including higher energy prices. The report also stated that although Malaysia is expected to attain high-income status between 2028 and 2030, fewer than half of Malaysians are likely to earn above the high-income threshold by then, with average household incomes needing to roughly double. It further highlighted slowing productivity growth, weaker education outcomes and underdeveloped social protection as priorities requiring structural policy reforms beyond sustaining economic growth.

THAILAND
Government plans to cancel proposed THB 1 trillion land-bridge project due to lack of economic viability
(24 July 2026) Thailand’s government plans to cancel its proposed THB 1 trillion (USD 29.7 billion) land-bridge project linking the Gulf of Thailand and the Andaman Sea after a government study concluded it is no longer economically viable and poses significant environmental risks. Thailand’s Finance Minister said a government committee has recommended terminating the project, with the updated assessment reversing an earlier study that had projected substantial economic benefits. The review lowered the project’s expected financial return to 4.8% from 8% and forecast cargo volumes up to 16% below previous estimates, while noting that nine of the world’s 10 largest shipping lines have already invested in competing projects, limiting commercial interest. The study also warned the project could harm environmentally sensitive areas, including Ranong’s biosphere reserve, wetlands and key marine tourism sites. Instead, the government plans to upgrade Ranong Port and develop a rail connection linking the Andaman coast to Thailand’s existing rail network to improve freight transport. The recommendation will be submitted to Prime Minister Anutin Charnvirakul and the Cabinet for approval. The minister said the government incurred no financial losses from the proposal because no land acquisitions had been made and construction had not commenced.

THE PHILIPPINES
Bangko Sentral ng Pilipinas conducts limited intervention in forex market to support peso
(28 July 2026) The governor of the Philippines’ central bank said the Bangko Sentral ng Pilipinas conducted limited intervention in the foreign exchange market last week to support the peso as it weakened to a record low. The governor stated that intervention was kept small and aimed only at maintaining orderly market conditions, noting that aggressively defending the currency against a strong US dollar would unnecessarily deplete foreign exchange reserves. The peso fell to an all-time low of 61.85 per US dollar and remained near that level as of Tuesday. The governor also said there is a small possibility of more aggressive monetary tightening if needed to return inflation to target. The central bank is monitoring the risk that peso weakness could contribute to higher domestic inflation.

Captures has widened its scope to include news related to all the members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. Besides the ASEAN Member States, this includes Australia, New Zealand, China, Japan, and South Korea. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

ASEAN
Iran war and higher fuel prices reshaping tourism demand across Southeast Asia
(07 July 2026) The Iran war and higher fuel prices are reshaping tourism demand across Southeast Asia, with travellers increasingly choosing shorter, lower-cost and more flexible regional trips over long-haul holidays. Bali resorts reported fewer European visitors and domestic Indonesian repeat guests, while arrivals from Malaysia, China and Singapore have increased. Indonesia’s foreign visitor arrivals rose 5.8% year-on-year in May despite weaker domestic demand. IATA forecasts average jet fuel prices of USD 152 per barrel in 2026, nearly 70% higher than a year earlier, although average weekly prices have fallen 20% over the past month, with Asia-Pacific airlines remaining exposed because of limited fuel hedging and reliance on Persian Gulf crude supplies. The Asian Development Bank said higher fuel costs are increasing expenses across airlines, hotels, restaurants, transport and tourism businesses. Malaysia’s weaker visitor growth in recent months has been attributed to higher airfares, flight disruptions linked to the Middle East conflict and softer long-haul demand rather than reduced competitiveness as a tourism destination, with BMI forecasting almost 28 million arrivals in 2026, about 5% above last year and above pre-pandemic levels. Tourism Malaysia reported demand remains resilient, with budget-conscious travellers booking later and taking shorter trips, while higher-income visitors continue to travel. Booking.com said Asia-Pacific travellers are prioritising flexibility, safety and value for money, with 93% of survey respondents citing safety and 91% value for money as key decision factors, while search data showed double-digit growth in interest for Da Nang, Nha Trang, Kuala Lumpur and Manila. Viet Nam recorded 12.3 million international visitors in the first six months of 2026, up 14.9% year-on-year, supported by stronger demand from China, South Korea and Japan, with resorts introducing new activities and reducing rates by 5% between July and September to attract visitors. Thailand’s foreign arrivals fell 2.3% year-on-year to 14.03 million in the first five months of 2026, prompting the Tourism Authority of Thailand to lower its full-year target to 30-34 million from 40 million and refocus marketing on short-haul visitors from China, Malaysia and India.

MALAYSIA
Exports rise 45.3% year-on-year to MYR 177.89 billion in June, fastest growth in nearly four years
(20 July 2026) Malaysia’s exports rose 45.4% year-on-year to MYR 177.89 billion in June, marking the fastest growth in nearly four years despite geopolitical tensions in the Middle East. This increase was below Bloomberg’s median forecast of 47.3% and followed May’s revised 44.7% growth. The Ministry of Investment, Trade and Industry said Malaysia’s trade has remained resilient despite ongoing geopolitical risks and expects several key products and export markets to achieve record highs this year, supported by electronics and demand from major trading partners. Electrical and electronic exports, which accounted for nearly half of total exports by value, increased 57% year-on-year. Petroleum product exports rose 56% while those of liquefied natural gas surged 83%. Exports to the United States more than doubled despite US tariffs, while exports to China rose 36% by value. Imports expanded 43.9% year-on-year to MYR 163.00 billion, driven by a 67% increase in capital goods imports, a 41.3% rise in intermediate goods and a 17.2% increase in consumption goods. Malaysia’s trade surplus widened 64.9% year-on-year to MYR 14.89 billion but declined 62.7% compared with May.

VIET NAM
Global automakers shifting production to Vietnam, but local value-add remains low
(18 July 2026) Honda will relocate production of its UC3 electric motorcycle from Thailand to its Phu Tho plant, with production scheduled to begin in September 2026, joining broader expansion plans by global automakers in Viet Nam. Toyota Vietnam plans to invest an additional USD 360 million to establish the country’s first hybrid vehicle production line, Honda aims to begin assembling hybrid cars in Vietnam in 2026, and SAIC Motor expects its proposed MG assembly plant to begin by the end of 2027. Viet Nam’s automotive market is projected to grow from approximately 630,000 vehicle sales and 484,500 domestically produced vehicles in 2025 to around 700,000 vehicle sales and 550,000 locally produced vehicles in 2026, while the Ministry of Industry and Trade forecasts annual demand of 1.0-1.1 million vehicles by 2030. During the first half of 2026, Toyota and Lexus sold 36,669 vehicles in Viet Nam, up 22% year-on-year, while Toyota Vietnam contributed more than USD 482 million in taxes and exported USD 37.2 million in auto parts. Industry observers said the expansion of vehicle manufacturing will create jobs, increase tax revenue and strengthen Viet Nam’s role in regional automotive supply chains. However, analysts said Thailand retains its position as Southeast Asia’s automotive manufacturing hub because of its mature supplier network, engineering capabilities and skilled workforce. The Vietnam Association for Supporting Industries said Viet Nam’s supporting industries remain underdeveloped, with many high-value components, including engines, transmissions, electronic systems and batteries, still imported, resulting in low localisation rates and higher production costs. Economists argue that Viet Nam has attracted major foreign automakers through land and tax incentives, but most value creation remains with foreign-owned brands, technologies and core components, while domestic firms continue to focus mainly on vehicle assembly. They argue that Viet Nam’s next priority is to strengthen domestic suppliers so they capture a larger share of the automotive value chain and secure longer-term benefits from foreign investment.

VIET NAM
Viet Nam’s pharmaceutical market projected to approach USD 10 billion in 2026
(20 July 2026) Viet Nam’s pharmaceutical market is projected to approach USD 10 billion in 2026, up from about USD 7 billion a few years earlier, driven by an ageing population, a growing middle class, rising healthcare demand and expanding health insurance coverage. Annual pharmaceutical spending has reached around USD 75 per capita, remaining below Thailand and Malaysia, indicating further growth potential. Foreign pharmaceutical companies are increasing investment through mergers and acquisitions, including Taisho’s acquisition of a controlling stake in DHG Pharmaceutical, Abbott Laboratories raising its ownership in Domesco to 51.7%, and Daewoong Pharmaceutical and Mirae Asset acquiring a 40.12% stake in Traphaco for more than VND 2.35 trillion. Analysts said overseas firms increasingly prefer acquisitions over building new factories to gain immediate access to Viet Nam’s manufacturing licences, distribution networks and customer base. SHS Research said the 2025-2030 period marks a new growth phase as the industry shifts towards internationally compliant manufacturing and deeper integration into global supply chains, while Viet Dragon Securities expects merger activity to accelerate among companies with strong hospital distribution networks, advanced production facilities and capacity for strategic foreign investment. Despite the positive outlook, domestic manufacturers remain dependent on imported pharmaceutical ingredients, with 80-90% sourced from overseas, and continue to face limited research and development capabilities.

THE PHILIPPINES
The Philippine Stock Exchange seeks to attract retail investors through reforms
(17 July 2026) The Philippine Stock Exchange (PSE) is introducing measures to increase retail investor participation, such as including a new trading engine later this year that will reduce the minimum trade size as well as introducing new exchange-traded funds. The bourse also seeks to allow faster stockbroker accreditation, allow margin trading, and offer derivatives targeted at institutional investors. The PSE President and CEO said the initiatives are intended to attract retail investors currently drawn to online gambling and cryptocurrency trading, as retail investors account for only 20% of equity trading compared with 80% in Viet Nam. The Philippines had 3.64 million stock market accounts in 2025, compared with around 10 million online gambling accounts. The Philippine Stock Exchange Index has rebounded 11% since its May low after the market was among the world’s weakest performers last year. The president of the bourse said the exchange is encouraging well-known companies to list to broaden retail participation, citing the planned fourth-quarter IPO of GCash owner Mynt Inc., which could raise a record PHP 92.3 billion (USD 1.5 billion), and the planned listing of motorcycle ride-hailing company Angkas. The PSE is also inviting Global Electric Transport, which operates electric minibuses in Manila, to pursue an IPO. PSE argues that attractive market valuations and competitive corporate profit margins provide a basis for improving investor confidence in the coming months.

INDONESIA
Bank Indonesia keeps 7-day reverse repurchase rate unchanged at 5.75%
(22 July 2026) Bank Indonesia kept its 7-day reverse repurchase rate unchanged at 5.75%, contrary to market expectations of a further increase following two consecutive rate hikes. The central bank also maintained the overnight deposit facility rate at 4.75% and the lending facility rate at 6.50%. Of 33 economists surveyed by Reuters, 20 had expected a further 25 basis point increase, while 13 correctly anticipated no change. Bank Indonesia has raised interest rates by a cumulative 100 basis points since May to attract foreign capital inflows and support the rupiah, which has faced pressure from concerns over Indonesia’s fiscal position, central bank independence and commodity export policies.

INDONESIA
Indonesia slashes 2026 budget for free meal programme to IDR 268 trillion
(22 July 2026) Indonesia has reduced the 2026 budget for President Prabowo Subianto’s free meal programme from IDR 268 trillion to IDR 229 trillion rupiah, following an earlier reduction from the original allocation of IDR 335 trillion. The secretary of the National Nutrition Agency said the revised figure is provisional, while a spokesperson stated that further cuts remain possible as the programme undergoes a one-month management review ordered by the president. The government confirmed the budget reduction will result in fewer beneficiaries, with the focus shifting from expanding coverage to improving quality, targeting recipients more effectively and preventing further food poisoning incidents. The programme currently serves 62.7 million recipients, although the number affected by the latest cuts was not disclosed. Previous cost-saving measures included suspending the programme during school holidays to save more than three trillion rupiah and reducing meal distribution from six days to five in March to save up to IDR 40 trillion amid the economic impact of the Middle East conflict. The head of the National Nutrition Agency announced her resignation for health reasons, while her predecessor and two former deputies have been accused of crimes related to the agency’s management. The programme was originally intended to reach at least 82.9 million children and pregnant or breastfeeding women.

Captures has widened its scope to include news related to all the members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. Besides the ASEAN Member States, this includes Australia, New Zealand, China, Japan, and South Korea. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

ASEAN
Amazon’s model struggles to compete with local competitors in Southeast Asia
(14 July 2026) Amazon has begun phasing out its Singapore fulfilment service from 06 July, including warehouse storage for retailers, while Amazon Fresh will cease operations and third-party sellers will also be affected. The company will retain its Singapore presence by focusing on cross-border shipments from its US, Japan and Germany stores, with Amazon Singapore citing continued demand for international products. Analysts attributed the retreat to Amazon’s centralised fulfilment model, which was considered costly and less suited to Southeast Asia than the localised logistics networks used by competitors such as Shopee, TikTok Shop and Lazada. Momentum Works said Amazon’s model struggled to adapt to regional market conditions, while Singapore’s relatively small e-commerce market and Amazon’s limited market share made the business difficult to sustain. Momentum Works estimated Singapore’s e-commerce gross merchandise value reached USD 5.9 billion in 2025, of which Amazon accounted for about USD 400 million, or 6%, while Amazon’s total Southeast Asian GMV was approximately USD 0.4 billion compared with Shopee’s USD 83.2 billion, TikTok’s USD 45.6 billion and Lazada’s USD 18 billion. Sea reported Shopee GMV of USD 37.3 billion in the January-March 2026 quarter, up 30% year on year, and reaffirmed guidance for approximately 25% annual GMV growth in 2026. TikTok Shop has expanded rapidly through livestream commerce and retail training programmes in Singapore, while Lazada has strengthened its position through local offerings such as RedMart. Amazon is increasingly positioning Southeast Asia as an export base rather than a consumer market, particularly by supporting Vietnamese SMEs to sell overseas, with the number of products sold by Vietnamese partners on Amazon increasing 35% in the 12 months to July 2025.

ASEAN
Malaysia leads Southeast Asia’s IPO market in first half of 2026
(13 July 2026) Deloitte reported that Malaysia led Southeast Asia’s IPO market in the first half of 2026 with 36 listings raising USD 1.3 billion, while Singapore recorded five IPOs raising USD 868 million. Across Southeast Asia, 47 IPOs raised more than USD 3.07 billion, down from 53 IPOs a year earlier, but total proceeds increased 117% from USD 1.41 billion as the average deal size rose from USD 26 million to USD 65 million. Deloitte said the market is shifting towards fewer but larger and more mature issuers. Three IPOs exceeding USD 500 million in proceeds—UI Boustead REIT in Singapore, Sunway Healthcare Holdings in Malaysia and Dien May Xanh Investment in Vietnam—collectively added approximately USD 8.93 billion in market capitalisation, whereas no IPO surpassed USD 500 million in the first half of 2025. Deloitte attributed Singapore’s improved performance to stronger investor confidence and support from recent capital market reforms, including the Monetary Authority of Singapore’s SGD 6.5 billion Equity Market Development Programme launched in February 2025. The report forecasts a healthy regional IPO market for the remainder of 2026, supported by a strong pipeline, improving investor sentiment and easing interest rates, although global macroeconomic uncertainty and valuation scrutiny remain risks. Deloitte Southeast Asia capital markets services leader Tay Hwee Ling said Malaysia is expected to maintain strong IPO momentum while Singapore should continue attracting sizeable institutional listings.

THAILAND
Thai stocks outperforming Southeast Asian peers as investors bet on political stability
(17 July 2026) Thailand’s benchmark SET Index has risen 30% in 2026, outperforming all Southeast Asian peers, as investors expect the government led by Prime Minister Anutin Charnvirakul to provide greater political stability following his party’s decisive February election victory. JPMorgan Asset Management recommended maintaining exposure to Thai equities, while a Bank of America survey indicated fund managers are reducing their underweight positions on Thailand. Foreign investors have made net purchases of almost USD 2 billion in Thai equities and USD 1.26 billion in bonds this year, reversing nearly USD 13 billion of equity outflows recorded over the previous three years. Improved sentiment has been supported by expectations of stronger foreign direct investment, increased participation in the global artificial intelligence supply chain, resilient exports, steady tourism and closer policy coordination between the government and central bank. Thailand has also benefited from portfolio reallocations away from Indonesia, where investors remain concerned about policy uncertainty. Earnings per share forecasts for the SET Index have increased 7% since Anutin’s election, while MSCI ASEAN earnings estimates have declined 1.9%. Official data showed foreign investment approvals increased 73% year on year to approximately THB 154 billion (USD 4.6 billion) in the first five months of 2026, reflecting faster approval processes and streamlined investment policies. Analysts cautioned that sustaining the market rally will depend on stronger corporate earnings and that risks remain from weak long-term economic growth, global headwinds, tourism uncertainty and the effects of El Niño.

MALAYSIA, INDONESIA
Malaysia emerges as fifth largest source of foreign investment into Indonesia in second quarter of 2026
(16 July 2026) Malaysia was the fifth-largest source of foreign investment into Indonesia in the second quarter of 2026, contributing USD 700 million, as Indonesia recorded total realised investment of IDR 511.8 trillion, up 7.1% year on year, creating 742,223 jobs, a 5.1% increase. Indonesia’s Investment and Downstreaming Minister said Hong Kong was the largest source of foreign investment in Q2 with USD 5.5 billion, followed by Singapore (USD 4.2 billion), China (USD 1.7 billion), Japan (USD 900 million) and Malaysia (USD 700 million), while noting that investments are recorded by the jurisdiction through which funds enter Indonesia rather than their ultimate origin. Total realised investment in the first half of 2026 reached IDR 1,010.6 trillion, up 7.2% year on year and equivalent to 49.5% of the annual target, generating 1,448,862 jobs, a 15% increase from a year earlier. Singapore remained Indonesia’s largest foreign investor in the first half with USD 8.8 billion, followed by Hong Kong (USD 7.8 billion), China (USD 3.9 billion), Japan (USD 1.9 billion) and the United States (USD 1.7 billion). The minister said the government continues to improve the investment climate through regulatory reforms, including Government Regulation No. 28 introduced in October, to provide greater certainty in licensing.

MALAYSIA, SINGAPORE
Johor Bahru-Singapore RTS Link to spur Singaporeans to spend USD 1.05 billion more in Johor Bahru
(16 July 2026) A joint study by the Singapore Business Federation, Restaurant Association of Singapore and Singapore Retailers Association projects that after the Johor Bahru–Singapore RTS Link begins operations in January 2027, Singaporeans will spend an additional USD 1.05 billion annually in Johor Bahru, around 40% more than the projected USD 756 million increase in spending by Johor Bahru visitors in Singapore. The study estimated that Singaporeans spent USD 1.7 billion in Johor Bahru in 2025, while Johor Bahru residents spent USD 1.3 billion in Singapore. Annual trips by Singapore consumers to Johor Bahru are forecast to increase 51%, with groceries, pharmaceuticals, dining and beauty products remaining the main spending categories. Among Johor Bahru respondents, 34% said they intend to visit Singapore after the RTS Link opens, while annual visits by public transport users are projected to increase 57%, with many motorists expected to switch to rail and spend more on overnight stays and entertainment. The study found that Singapore retail and food and beverage businesses expect stronger competition from Johor Bahru, particularly in price-sensitive sectors, while highlighting manpower shortages, compliance requirements and operating costs as barriers to improving competitiveness.

THAILAND
Number of beneficiaries under state welfare card programme reduced by 28%
(17 July 2026) Thailand has reduced the number of beneficiaries under its state welfare card programme by 28% to 9.5 million from 13.2 million in the 2022 registration round after the Ministry of Finance introduced stricter eligibility screening to better target low-income and vulnerable groups. The Fiscal Policy Office said eligible recipients now represent about 14% of the population, compared with the World Bank’s estimated poverty rate of around 12%. Of the 18.8 million people who registered for the 2026 programme, 5.76 million failed to meet existing eligibility criteria, while a further 3.56 million were excluded under new checks covering financial assets, company directorships, securities accounts, land ownership, credit cards and non-bank loans. The tighter screening is expected to reduce the fiscal burden by approximately THB 14.5 billion (USD 431.5 million). The changes come as Thailand’s public debt stood at 66.8% of GDP at the end of May, close to the government’s self-imposed ceiling of 70%. It has been noted that the revised recipient list reflects a more targeted approach to welfare distribution but remains above research estimates of 4 million to 5 million people in need, and called on Prime Minister Anutin Charnvirakul’s government to publish more data on recipient distribution to demonstrate that the reforms are intended to improve the fairness and efficiency of public spending rather than simply reduce expenditure.

SINGAPORE, TIMOR-LESTE
Global Group begins construction of first fuel storage terminal in Timor-Leste
(13 July 2026) Singapore-based Global Group has begun construction of its first fuel storage terminal in Timor-Leste, a USD 10 million project in Liquica expected to be completed within 10 months. The two-hectare facility will include two floating-roof tanks with storage capacity of 3.5 million litres of diesel and 2.5 million litres of petrol, with a second expansion phase planned for 2030. The terminal will support the company’s retail and wholesale fuel operations, which include nine petrol stations, fuel supplies for major construction projects and naval vessels, and a fleet of about 50 fuel trucks. The director of Global Group said the facility will strengthen inventory control, reduce reliance on third-party storage and eliminate annual throughput fees of approximately USD 1.8 million currently paid to Pertamina’s terminal. Global Group said its Timor-Leste operations generate annual turnover of USD 50-60 million and profits of USD 2-3 million, with wholesale fuel sales increasing from about 300,000 litres per month in 2014 to more than 3.5 million litres per month in 2024, supported by annual revenue growth of 8-10%. The company said it controls nearly two-thirds of Timor-Leste’s onshore fuel market and expects additional storage capacity will be required due to rising investor interest and economic development. Once completed, the terminal will become Timor-Leste’s third fuel storage facility and will reserve 150,000 litres of fuel for government use to enhance energy security. Global Group also reiterated its intention to pursue a public listing, after an earlier attempt to list its Timor-Leste unit on the Singapore Exchange’s Catalist board was unsuccessful because the market was considered too high risk, with Hong Kong identified as an alternative listing venue if required.