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
Inflation eases in the Philippines and Thailand in May due to lower global oil prices
(05 June 2026) Inflation eased in the Philippines and Thailand in May, providing greater flexibility for their central banks in assessing further interest rate increases. Philippine consumer inflation slowed to 6.8% year-on-year from 7.2% in April, while Thailand’s inflation rate eased to 2.79% from 2.89%. Lower global oil prices reduced energy, transport and food inflation in both countries, while consumer spending also softened as households controlled costs. Despite the moderation, both governments warned that inflationary pressures could rise again due to the unresolved Iran conflict and Southeast Asia’s reliance on Middle Eastern oil imports. Barclays said the latest inflation data reduces the urgency for off-cycle tightening by the Bangko Sentral ng Pilipinas (BSP). However, they expect Philippine inflation to remain above the BSP’s 2%-4% target range through April 2027, supporting the possibility of a further 25-basis-point rate increase at the June meeting. Barclays also expects Thai inflation to exceed the Bank of Thailand’s 1%-3% target range in the second half of the year. The Bank of Thailand may nevertheless keep its policy rate unchanged at 1% and look through the supply-driven inflation shock.

ASEAN
Southeast Asia credit rating stable despite continued currency depreciation pressures
(08 June 2026) Moody’s Ratings expects overall credit strength among Southeast Asian non-financial companies to remain stable over the next 12–18 months, despite continued currency depreciation pressures. The agency said 83% of rated issuers either have no material foreign-exchange exposure or possess sufficient financial buffers to absorb further currency weakness. Currency depreciation across the region intensified during 2025 and 2026 due to the escalating West Asia conflict, higher oil prices, US tariffs and foreign capital outflows. Over the past year, Indonesia’s rupiah, India’s rupee and the Philippine peso have depreciated by 10%–12% against the US dollar, while Malaysia’s ringgit and Thailand’s baht have appreciated, supported by commodity exports and manufacturing-related capital inflows. Moody’s said the credit impact varies according to companies’ revenue and cost currency profiles. Airlines face the greatest pressure because of high US dollar-denominated costs and predominantly local-currency revenues. Companies in mining, commodities and information technology services benefit from US dollar-linked revenues, which provide a natural hedge, support local-currency profit margins and improve export competitiveness. Firms with substantial US dollar debt and mainly domestic revenue bases face higher debt-servicing and repayment costs when local currencies weaken. However, companies reliant on foreign-currency debt may face higher hedging costs if the US dollar remains strong, increasing overall financing expenses despite stable base interest rates.

VIET NAM
VinFast reports first-quarter revenue of VND 23.11 trillion amidst strong Southeast Asian demand
(08 June 2026) Vietnamese electric vehicle (EV) manufacturer VinFast reported first-quarter revenue of VND 23.11 trillion (USD 877.24 million), up nearly 42% from VND 16.31 trillion a year earlier, driven by strong electric vehicle demand in key Southeast Asian markets. The company has increasingly focused on Viet Nam, India and Indonesia as growth markets amid weaker EV demand in countries such as the United States. First-quarter net loss widened about 59% year-on-year to VND 28.11 trillion as VinFast continued investing in new factories and expanding production capacity to meet demand. In May, the company agreed to supply GSM, a taxi operator founded by VinFast founder and chief executive Pham Nhat Vuong, with around one million electric vehicles and four million e-scooters between 2026 and 2030. VinFast also announced plans last month to sell its Viet Nam manufacturing facilities to a buyer group that includes Vuong as part of a restructuring of its domestic operations.

MALAYSIA
Malaysia records MYR 92.8 billion in approved investments in first quarter of 2026
(08 June 2026) Malaysia recorded MYR 92.8 billion in approved investments in the first quarter of 2026, down marginally from MYR 93 billion a year earlier, across 1,249 projects, while expected job creation rose 46.7% to 50,226 positions from 34,240. Foreign investments totalled MYR 56.2 billion, representing 60.5% of approvals, while domestic investments increased 13% year-on-year to MYR 36.6 billion. Japan was the largest foreign investor with MYR 21.5 billion in approved investments, up from MYR 1.6 billion a year earlier, followed by China and the United States at MYR 10.1 billion each, Singapore at MYR 6.7 billion and Thailand at MYR 2.5 billion. Selangor led with MYR 33.5 billion in approved investments, nearly tripling from MYR 11.8 billion in 1Q2025, followed by Johor and Kuala Lumpur with MYR 16.9 billion each. The services sector accounted for MYR 60.8 billion, or 65.5% of total approvals, driven by information and communications investments of MYR 38.9 billion, including MYR 34.6 billion in data centre and cloud computing projects across 33 developments. Manufacturing approvals fell 20.8% year-on-year to MYR 24.1 billion, although Mida said investments increased 1% excluding a MYR 6.6 billion basic metals project approved in 1Q2025. Manufacturing projects are expected to generate 30,468 jobs, representing 60.7% of total projected employment, with 17.9% of new jobs offering monthly salaries above MYR 5,000. The primary sector recorded RM7.9 billion in approved investments, up from RM1.5 billion a year earlier, driven entirely by offshore oil and gas development and exploration projects, mainly in Sarawak. As of 05 May, Mida was facilitating 182 potential projects worth MYR 38.3 billion and was in active discussions on a further MYR 91 billion of potential investments.

MALAYSIA, THAILAND
Malaysia awaiting Thai response on questionnaire regarding shrimp imports in light of recent import ban
(08 June 2026) Malaysia is awaiting Thailand’s response to a questionnaire on shrimp imports before determining whether the country complies with Malaysia’s biosecurity requirements. The Agriculture and Food Security Ministry submitted the questionnaire through Malaysia’s agricultural representative office in Bangkok and will assess Thailand’s compliance once a complete response is received. No deadline has been set for Thailand’s reply. Malaysia has also strengthened biosecurity controls on Thai sea bass imports by requiring a Certificate of Analysis (CoA), mirroring restrictions and full inspections imposed by Thailand on Malaysian sea bass exports. On 16 May, Malaysia tightened controls on Thai fishery products by introducing CoA requirements for sea bass and imposing a temporary ban on five shrimp species effective from last Monday. The affected species are Penaeus esculentes, Fenneropenaeus merguiensis, Penaeus vannamei, Penaeus monodon and Penaeus stylirostris. Thailand has indicated it may raise Malaysia’s temporary suspension of the five shrimp species at the World Trade Organisation and ASEAN forums if bilateral negotiations do not resolve the dispute.

INDONESIA
Indonesia’s financial markets weaken further on 08 June despite new measures to support rupiah
(08 June 2026) Indonesia’s financial markets weakened further on Monday despite new measures announced by Bank Indonesia (BI) and the government to support the rupiah and attract capital inflows. The 10-year government bond yield rose 36 basis points to its highest level in more than a year at 7.24%, while the rupiah fell 0.9% to a record low of 18,180 per US dollar and the benchmark stock index extended losses, leaving it down 37% year-to-date. The rupiah has depreciated more than 8% this year, while foreign investors have withdrawn a net USD 3.6 billion from equities and USD 422 million from bonds amid concerns over President Prabowo Subianto’s fiscal spending plans, interventionist economic policies and rising risk perceptions. Over the weekend, BI Governor Perry Warjiyo and Finance Minister Purbaya Yudhi Sadewa pledged to maintain market liquidity, raise returns on government-related deposits and support higher bond yields to attract inflows. Analysts said the bond sell-off reflected continued foreign outflows and insufficient confidence in the government’s measures. BI raised interest rates by 50 basis points last month and has continued currency intervention, contributing to a decline in foreign-exchange reserves for a fifth consecutive month to USD 144.9 billion in May. Strategists suggested the rupiah may require a rate increase exceeding 50 basis points, with one analyst forecasting a 75-basis-point hike. Investor concerns have also been fuelled by expanded parliamentary oversight of BI, a corruption investigation, new commodity export rules and uncertainty over potential changes to economic policymakers. Finance Minister Purbaya recently told S&P Global Ratings that Indonesia would maintain its fiscal deficit below the legal ceiling of 3% of GDP.

SINGAPORE
Government warn of increased pressure on growth and inflation in second half of 2026
(08 June 2026) Singapore Prime Minister Lawrence Wong said the economy has yet to experience the full effects of the Middle East conflict, warning of increased pressure on growth and inflation in the second half of the year. He noted that electricity, food and fertilizer prices have not yet fully reflected higher global oil prices, while the global economy has so far been supported by alternative oil supplies and inventory drawdowns following the closure of the Strait of Hormuz. Wong said a prolonged disruption lasting several months could weaken global demand and adversely affect Singapore’s trade-dependent economy. Economists surveyed by Bloomberg expect Singapore’s economy to grow 3.3% in 2026, down from an earlier forecast of 3.5% and from 5% growth recorded in 2025. Wong also warned of a developing pattern of “mutually assured disruption” between the United States and China, where retaliatory restrictions could leave both economies worse off. He welcomed the recent summit between US President Donald Trump and Chinese President Xi Jinping, saying continued communication reduces the risk of miscalculation and helps preserve strategic stability. Wong reiterated concerns that rising protectionism, geopolitical tensions and renewed US tariff threats are contributing to economic fragmentation. He said Singapore will continue diversifying its economic partnerships and expanding trade links with India, the Gulf region and Europe. Wong also defended continued engagement with a broad range of countries, noting Singapore’s recent diplomatic outreach to North Korea despite policy differences.

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 PMI rises to 51.5 in May 2026, indicating expansion
(02 June 2026) Southeast Asia’s manufacturing sector ended a three-month slowdown in May, with the manufacturing Purchasing Managers’ Index rising to 51.5 from 50.7 in April, indicating a stronger expansion in activity. Growth was driven by a solid increase in new domestic orders, which enabled manufacturers to raise production despite continued weakness in exports. Viet Nam recorded the region’s highest PMI reading at 52.8, followed by Thailand at 52.6, while the Philippines and Indonesia also remained in expansion territory. Myanmar and Malaysia registered contractionary readings of 49.3 and 49.9, respectively. S&P Global reported that purchasing activity increased across the region, but firms remained cautious about workforce expansion, resulting in a slight decline in employment during May. According to S&P Global Market Intelligence, ongoing trade disruptions and inflationary pressures linked to the current war are expected to continue weighing on growth prospects.

INDONESIA
Monthly inflation accelerates to 0.28% in May from April’s level
(02 June 2026) Indonesia’s monthly inflation accelerated to 0.28% in May from April’s level, driven primarily by higher food, beverage and tobacco prices, according to Statistics Indonesia (BPS). BPS said red chilli peppers were the largest contributor, adding 0.08 percentage points to inflation, followed by cooking oil and shallots at 0.04 percentage points each, tomatoes at 0.03 percentage points and rice at 0.02 percentage points. The BPS attributed the increase to seasonal movements in volatile food prices and changes in demand linked partly to major religious holidays. Annual inflation reached 3.08% in May, while year-to-date inflation stood at 1.35%. Bank Indonesia’s inflation target remains 2.5% with a tolerance range of one percentage point above or below the target for this year and next. Separately, BPS reported that Indonesia’s economy expanded 5.61% year-on-year in the first quarter of 2026, the strongest growth since the third quarter of 2022. The rupiah weakened to more than 17,800 per US dollar, a record low, which Bank Indonesia attributed to global tensions and seasonal factors including corporate demand for dollars to pay dividends and overseas travel by hajj pilgrims.

INDONESIA
Indonesia records trade surplus of USD 0.09 billion in April 2026
(02 June 2026) Indonesia recorded a trade surplus of USD 0.09 billion in April 2026, its smallest monthly surplus since May 2020 and well below the USD 1.5 billion expected in a Reuters poll. Exports rose 21.98% year-on-year to USD 25.3 billion, supported by higher shipments of manufactured products including palm oil and nickel derivatives, basic chemicals and jewellery. Imports increased 22.49% to USD 25.21 billion, driven by an 82.52% surge in oil and gas imports and a 42.9% rise in consumer goods imports. The statistics bureau said Indonesia’s main crude oil suppliers in April were Nigeria, Brazil and Kazakhstan, while refined oil imports primarily came from Malaysia, Singapore and Egypt. Export growth benefited from higher commodity prices following the war in Iran and the depreciation of the rupiah, which fell to a record low of 17,892 per US dollar ahead of the data release.

THE PHILIPPINES
Philippine inflation in May expected to range between 7.1% and 7.9%
(30 May 2026) The Bangko Sentral ng Pilipinas (BSP) expects Philippine inflation in May to range between 7.1% and 7.9%, compared with 7.2% in April. The projected increase is primarily attributed to higher prices for rice, vegetables and meat, as well as the weakening peso, which reached a record low against the US dollar during the month. The BSP said recent reductions in domestic fuel prices and slightly lower electricity rates could partially offset these inflationary pressures. The BSP Governor stated that the May inflation data, due for release on 05 June, will be an important factor in determining the central bank’s next policy decision. The BSP has indicated readiness to implement further monetary tightening after raising its benchmark interest rate by 25 basis points to 4.5% last month.

THAILAND
Bank of Thailand claims current policy interest rate remains appropriate
(02 June 2026) Bank of Thailand Governor Vitai Ratanakorn said the current policy interest rate remains appropriate despite rising inflation and a more hawkish stance by some central banks in response to higher energy prices. Thailand’s headline inflation increased to 2.89% year-on-year in April, up from the previous year, but remained within the central bank’s 1%-3% target range. The governor said inflation could exceed 5% in the third quarter but characterised the increase as a temporary, oil-driven phenomenon rather than a threat to long-term economic growth. He stated that inflation is expected to ease after reaching its peak as market expectations improve regarding a resolution of the Middle East conflict. The comments indicate continued support for maintaining accommodative monetary policy to assist an economy facing higher energy costs and weaker external demand. The Bank of Thailand left its benchmark one-day repurchase rate unchanged at 1% in April, one of the lowest policy rates globally. The next monetary policy meeting is scheduled for 24 June.

CAMBODIA
International visitors to Angkor Wat decline 31.8% year-on-year during January–May 2026 period
(02 June 2026) Cambodia’s Angkor Archaeological Park received 359,471 international visitors during January–May 2026, a decline of 31.8% compared with the same period a year earlier, according to state-owned Angkor Enterprise. Revenue from ticket sales fell 30% year-on-year to USD 17.2 million over the five-month period. The UNESCO World Heritage site in Siem Reap province covers 401 sq km and contains 91 temples dating from the ninth to the 13th centuries. The deputy director of the China-Asean Studies Center at the Cambodia University of Technology and Science said the decline was likely linked to global and regional economic slowdowns, online scam-related issues and the border conflict with Thailand. He added that the conflict in the Middle East had further affected visitor numbers through higher fuel prices and disruptions to some flights.

VIET NAM
Agricultural exports increase 9.2% year-on-year in first five months of 2026
(01 June 2026) Viet Nam’s agriculture, forestry and fisheries exports increased 9.2% year-on-year to nearly USD 30.7 billion in the first five months of 2026, generating a trade surplus of USD 8.4 billion, up 1.1%, according to the Ministry of Agriculture and Environment. Imports rose 12.6% to nearly USD 22.3 billion during the same period. Agricultural products remained the largest export category at almost USD 16.4 billion, up 6.1%, while forestry exports reached USD 7.65 billion, up 4.5%, and seafood exports rose 10.6% to USD 4.65 billion. Exports of production inputs increased 83% to USD 1.7 billion, livestock product exports grew 43.2% to USD 308 million, and salt exports rose 45.8% to USD 6.7 million. China remained the largest export market, accounting for 20.5% of total export value and recording growth of 28.4% year-on-year. The United States represented 18.5% of exports, although shipments declined 3.6%, while exports to the European Union and Japan increased 4.2% and 3.5% respectively, accounting for 11.8% and 6.8% of total exports. The ministry attributed export growth to trade promotion activities, market diversification and the effective use of free trade agreements. The Deputy Minister of Agriculture and Environment said the sector is targeting growth of 3.7% in 2026 and is seeking to achieve 4%, with key indicators broadly tracking planned targets.

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 Asian governments intensify measures to address impact of Middle East conflict
(24 May 2026) Southeast Asian governments are intensifying measures to address the economic impact of the Middle East conflict and energy crisis, which has increased inflationary pressures, weakened currencies, and strained public finances in oil-import-dependent economies. Indonesia raised its benchmark interest rate by 50 basis points to 5.25%, its first increase in two years, with the central bank citing the need to support the rupiah and contain future inflation despite recent declines in consumer price inflation. Thailand approved a THB 176 billion (USD 5.4 billion) “Thai Help Thai Plus” support package providing cash aid and benefits to millions of people, with Thailand’s finance minister warning that prolonged inflation could force smaller businesses to cut jobs or close operations. Governments, including Indonesia, Thailand, Viet Nam and the Philippines, have also introduced fuel demand reduction measures such as promoting remote work, limiting official travel, and cancelling flights. Capital Economics said governments may need to take further action if the Iran conflict continues and the Strait of Hormuz remains closed, increasing risks of inflation, balance-of-payments strains, and energy shortages. Protests linked to rising fuel costs have emerged in Indonesia among fishermen unable to afford diesel and in the Philippines among transport drivers. The Philippines, which sources 95% of its oil imports from the Middle East, raised interest rates in April and indicated further increases may follow due to rising food and energy costs. The Philippine peso has fallen 4.66% against the US dollar in 2026, while the Indonesian rupiah has declined 5.75%, making them among Asia’s weakest-performing currencies this year. Rising import costs and weaker currencies have increased fiscal pressure on governments attempting to shield consumers from higher energy prices. Benchmark 10-year bond yields have risen sharply across developing Southeast Asia, with Philippine yields increasing by 1.79 percentage points, the largest rise in the region.

ASEAN
Yield curves in several ASEAN bond markets steepen due to higher oil prices
(22 May 2026) Yield curves in several Southeast Asian bond markets have steepened as higher oil prices increase inflation risks and fiscal pressures linked to fuel subsidies and government support measures. The spread between two- and 10-year government bond yields in Thailand widened to about 110 basis points this month, the largest gap since November 2022, while the equivalent spread in the Philippines reached as much as 120 basis points, the widest since January 2023. Malaysia’s five-to-10-year yield spread has also increased since the start of the Middle East conflict. Fidelity International said ASEAN economies remain vulnerable to further curve steepening due to weaker fiscal buffers and dependence on energy imports if oil prices remain elevated. Citigroup strategists said yield curves in Thailand and the Philippines could steepen further because of weak demand for long-dated sovereign debt. A Thai government bond auction for debt maturing in 2050 on 13 May recorded a bid-to-cover ratio of 1.17 times, the lowest for that tenor this year. The Philippine government subsequently rejected all bids for a seven-year bond auction to avoid a sharp rise in yields. Thailand is proceeding with a THB 400 billion (USD 12 billion) emergency borrowing programme to finance cash handouts, fuel relief and subsidies, while public debt approaches the government’s self-imposed ceiling of 70% of GDP. In the Philippines, Fitch Ratings and S&P Global Ratings both downgraded the country’s credit rating outlook due to risks associated with higher energy prices. Malaysia, despite being a net energy exporter, is also increasing spending on fuel subsidies, although the government stated last month that it remains on track to meet its fiscal deficit target for the year. Indonesia differs from regional peers, with its yield curve flattening as Bank Indonesia sold short-term debt and purchased long-dated bonds to support the rupiah and stabilise financing costs. Bank Indonesia’s larger-than-expected interest-rate increase on 20 May also contributed to upward pressure on short-dated yields.

MALAYSIA
Exports to major trading partners reach record levels between January to April 2026
(26 May 2026) Malaysia’s exports to major trading partners reached record levels between January and April, with Malaysia’s Deputy Investment, Trade and Industry Minister attributing it to investments secured under the Madani government over the past three years. The minister said approved investments totalled MYR 329.5 billion in 2023, MYR 384.4 billion in 2024, and MYR 426.7 billion in 2025, bringing cumulative approved investments under Prime Minister Datuk Seri Anwar Ibrahim’s administration to MYR 1.14 trillion. He stated that investment projects typically require several years to materialise through land acquisition, factory construction, machinery installation and workforce hiring before contributing to industrial output and exports. Malaysia’s total trade reached MYR 1.127 trillion in the first four months of the year, surpassing the MYR 1 trillion threshold one month earlier than in the previous year. Exports totalled MYR 609.31 billion, while imports reached MYR 517.40 billion. The trade surplus doubled year-on-year to MYR 91.92 billion. The minister said total trade, exports, imports and trade surplus all recorded their highest levels on record for the January-to-April period. He said the performance demonstrated that increased investments were translating into stronger manufacturing activity, export growth and wealth generation. He added that the economic momentum was benefiting all Malaysian states, including those governed by opposition parties.

MALAYSIA
Economy grows 5.4% year-on-year in first quarter of 2026
(25 May 2026) Malaysia’s economy grew 5.4% year-on-year in the first quarter of 2026, slightly above the advance estimate of 5.3%, supported by household spending, investment activity and continued strength in electrical and electronic exports, although growth moderated from 6.2% in the previous quarter. The governor of Bank Negara Malaysia said the economy entered the Iran conflict and energy crisis from a position of strength supported by resilient fundamentals. However, Bank Negara data showed monthly real GDP growth slowing from 7.1% in December to 6.8% in January, 5.2% in February and 4.1% in March, indicating weakening momentum despite Chinese New Year and Hari Raya spending effects. Private consumption growth slowed to 4.7% from 5.6% in the preceding quarter, while private investment eased to 7.8% from 9.2%. On a seasonally adjusted quarter-on-quarter basis, the economy contracted marginally by 0.01%. UOB Malaysia said downside risks were increasing as the conflict entered its 12th week and the Strait of Hormuz remained effectively closed. The Socio-Economic Research Centre warned that the impact of the war on growth could be underestimated and said the full-year growth outcome may move towards the lower end of Bank Negara’s 4% to 5% forecast range. RAM Rating Services said the growth drag could intensify in the second half of 2026 if supply disruptions persist. Malaysia’s headline inflation increased to 1.6% in the first quarter from 1.3% previously, with Bank Negara expecting inflation to trend towards the upper end of its 1.5% to 2.5% forecast range. Economists warned that higher production and logistics costs may increasingly be passed on to consumers, particularly through food and services prices.

THE PHILIPPINES
Authorities state that merchandise exports could reach new record high in 2026
(26 May 2026) The Philippines’ Department of Trade and Industry said merchandise exports could reach a new record high in 2026, supported by sustained global demand for Philippine products. The Philippines’ Trade Secretary said exports of goods reached a record USD 84.48 billion in 2025, up 15.3% from USD 73.27 billion in 2024 and the highest level since records began in 1991. Merchandise exports totalled USD 22.7 billion in the first quarter of 2026, increasing 12.7% from USD 20.14 billion in the corresponding period last year. The Trade Secretary said semiconductors, electronics, minerals and automotive parts continued to drive export growth, while agricultural exports, including coconuts, bananas, pineapples and ube, were also recording strong demand. The secretary said the government remained optimistic about achieving another export record despite higher domestic fuel and operating costs linked to the Middle East conflict, noting that such challenges were affecting multiple countries. They added that ongoing free trade agreement negotiations were expected to further support export growth. The Philippine Exporters Confederation also said merchandise exports could achieve another record this year, provided electronics and major agricultural exports remain exempt from US tariffs. He said exporters continued to face challenges, including regulatory burdens, financing access and compliance requirements. They added that although Philippine exports were growing, neighbouring countries were recording faster increases in overseas shipments.

INDONESIA
Palm oil farmers facing significant income losses following export centralization plan
(25 May 2026) Indonesian palm oil farmers are facing significant income losses following the government’s plan to require palm oil exports to pass through the newly established state-owned trading entity Danantara Sumberdaya Indonesia (DSI). Data from the Indonesian Oil Palm Farmers Union and the Indonesian Palm Oil Farmers Organizations Association showed fresh fruit bunch prices in West Sulawesi, West Kalimantan and North Sumatra fell to around IDR 1,000 to IDR 1,500 per kilogram from about IDR 2,800 per kilogram previously. The Indonesian Oil Palm Farmers Union said exporters and processors reduced or temporarily halted purchases after the proposed single-gate export system triggered negative market reactions. They warned that the policy could create a monopsony market structure that would further depress farmgate prices and threaten the sustainability of smallholder plantations. They said many farmers were considering reducing or stopping fertiliser use because lower prices may no longer cover production costs. Smallholders account for around 40% of Indonesia’s palm oil supply, raising concerns over future supply disruptions if productivity declines. They also warned that the policy could undermine the government’s B50 biodiesel programme by reducing domestic palm oil feedstock availability. The chairman of the Indonesian Palm Oil Farmers Organizations Association said uncertainty surrounding the policy caused traders, refiners and exporters to delay transactions, increasing market panic and weakening crude palm oil prices. Market data showed crude palm oil tender prices declined from around IDR 15,300 to IDR 12,150 per kilogram within several days. The chairman said businesses lacked clarity on trading arrangements, payments, price formation and risk-sharing mechanisms under the new export system. The government has defended the policy as a measure to prevent export invoice manipulation and protect export tax revenues.

THAILAND
Trade deficit hits record USD 10 billion in April 2026 due to sharp increase in import costs
(25 May 2026) Thailand recorded its largest trade deficit since records began in 1991 after higher imports of capital goods, raw materials and rising oil and gas prices drove a sharp increase in import costs. Commerce ministry data showed imports surged 45% year-on-year in April, exceeding the highest estimate in a Bloomberg survey of economists. Exports increased 23.1%, slightly above the median forecast. Imports exceeded exports for a seventh consecutive month, widening the trade deficit to USD 10 billion in April compared with a median estimate of USD 5.3 billion. The director-general of the Trade Policy and Strategy Office said strong imports and widening trade deficits were likely to persist if energy prices remained elevated and artificial intelligence-related demand continued driving trade flows. He added that continued trade imbalances could place further pressure on the baht. The office forecast Thailand’s export growth for the year within a range of minus 3% to plus 8%, with a base-case estimate of 3%. The director-general said the broad forecast range reflected uncertainty surrounding global energy prices and the outlook for AI-related demand.

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
Economy grows 2.8% year-on-year in Q1 2026, beating forecasts
(18 May 2026) Thailand’s economy grew 2.8% year on year in Q1 2026, accelerating from 2.5% in the previous quarter and exceeding a 2.2% Reuters poll forecast, according to the National Economic and Social Development Council (NESDC). Growth was supported by stronger investment, goods exports, and government consumption expenditure. Goods exports rose 15.5% year on year in Q1, compared with 8.7% growth in Q4 2025, with NESDC identifying high-tech electronic exports as a key growth driver. Thailand’s performance contrasted with weaker regional momentum, with the Philippines recording 2.8% growth, its weakest in five years, while growth in Vietnam, Malaysia, and Singapore slowed from the previous quarter despite remaining relatively resilient at 7.8%, 5.4%, and a preliminary 4.6%, respectively. Indonesia’s growth increased to 5.6% from 5.4%, supported by higher government spending. Thailand’s tourism sector was affected by the Iran conflict, with foreign visitor arrivals falling 2.4% year on year in Q1 to 9.3 million due to air transport disruptions and higher ticket prices. Analysts said prolonged Middle East tensions could raise energy and living costs and weaken consumption. Thailand’s consumer prices, which had declined for 12 consecutive months until March, increased 2.9% year on year in April due to higher fuel prices. The NESDC said damage to Middle East oil infrastructure could keep oil prices elevated for several years, weighing on Thai and global economic activity. Earlier this month, the Thai government issued an emergency decree to borrow THB 400 billion to address rising living costs, subsidise vulnerable groups, and support SMEs with liquidity measures to prevent bankruptcies. The NESDC maintained its 2026 growth forecast range at 1.5% to 2.5%.

THAILAND
Government plans to slash more than 7,000 business regulations to lure foreign investments
(18 May 2026) Prime Minister Anutin Charnvirakul’s government plans to reform more than 7,000 business regulations to reduce bureaucratic barriers and accelerate investment as Thailand competes for global capital and supply chain relocations. The initiative, outlined in a government statement on Monday, includes the rollback of ministerial rules and secondary regulations that authorities said have become a significant cost burden on businesses. A government spokesperson said the reforms reflect a shift from a control-oriented bureaucracy towards a more facilitative policy approach. The government also proposed a “Super License” system to consolidate multiple permits into a single approval process. Industry groups have been asked to identify 10 to 20 major regulatory obstacles, with submissions due in early June. The reforms come amid concerns Thailand could lose competitiveness to regional peers, including Viet Nam and Indonesia, which have implemented more aggressive regulatory streamlining measures to attract foreign investment. Thailand’s Board of Investment reported an 18% increase in investment in Q1 2026, partly supported by its “Fast Pass” programme aimed at accelerating approvals. On Friday, Anutin met leading Thai billionaires and industry executives to discuss investment, competitiveness, employment and long-term economic growth strategies.

MALAYSIA
Malaysia likely to have reached peak growth in Q1 2026, momentum to moderate for remainder of year
(19 May 2026) BMI Country Risk & Industry Research, a unit of Fitch Solutions, said Malaysia’s economy likely reached its growth peak in Q1 2026 and expects momentum to moderate for the remainder of the year due to rising geopolitical risks and weaker global demand. Malaysia’s GDP grew 5.4% in Q1 2026, easing from 6.2% in Q4 2025, according to data released by Bank Negara Malaysia. BMI maintained its 2026 real GDP growth forecast at 4.3%, citing risks linked to the ongoing US-Iran conflict that could weaken economic activity and investor sentiment in Malaysia. The research house also said proposed fuel subsidy rationalisation for higher-income groups could soften consumer sentiment and reduce discretionary spending among households that contribute significantly to domestic demand. BMI noted private consumption remained the main driver of Q1 growth but warned prolonged geopolitical tensions could increase inflationary pressures and weaken domestic spending. It added that a wider escalation of the Iran conflict could push oil prices above its forecast of USD 90 per barrel, further fuelling inflation and slowing domestic activity. BMI also highlighted comments by BNM’s governor indicating inflation could move towards the upper end of the central bank’s 1.5% to 2.5% forecast range for 2026.

INDONESIA
Indonesian rupiah falls to record low against US Dollar
(18 May 2026) The Indonesian rupiah fell as much as 1.2% against the US Dollar on Monday, reaching a record low and becoming Asia’s worst-performing currency as markets reopened after a two-day holiday amid a broader global selloff linked to inflation and oil price concerns. The currency later closed down 1.1% at 17,656 per dollar. Indonesian equities also declined, while the benchmark 10-year government bond yield rose 17 basis points. Investor concerns were driven by prolonged high oil prices, Indonesia’s energy subsidy burden, and higher global yields, with Australia & New Zealand Banking Group forecasting an interest-rate increase by Bank Indonesia on Wednesday. Investor sentiment has weakened further following uncertainties over a possible equities reclassification to frontier market status and negative credit outlook revisions by Fitch Ratings and Moody’s Ratings. The rupiah has fallen more than 5% this year, making it Asia’s second-worst performing currency after the Indian rupee. Bank Indonesia’s governor said the central bank would intensify intervention measures and maintained that foreign-exchange reserves remained “more than adequate”. Warjiyo also said the rupiah could strengthen to an average of 16,500 per dollar this year as domestic demand for US dollars eased. The central bank has been selling short-term government bonds and purchasing longer-term bonds to stabilise yields. Analysts questioned the effectiveness of these measures given oil-price shocks and concerns over domestic fiscal policy.

THE PHILIPPINES, UNITED STATES
Philippine officials reject special US status for planned Luzon industrial hub
(19 May 2026) Philippine officials said the proposed 1,620 hectares Pax Silica industrial hub in New Clark City would remain fully subject to Philippine laws and rejected US proposals that would allow the project to operate under American jurisdiction or grant diplomatic immunity to US personnel. The president of the Bases Conversion and Development Authority said the project would instead operate under the Philippines’ Special Economic Zone Act and BCDA law governing former US military base developments. The clarification followed reports that the United States sought arrangements placing the hub beyond Philippine jurisdiction. The project forms part of the US-backed Luzon Economic Corridor initiative linking industrial hubs in Luzon to Manila’s ports and logistics infrastructure. The US Undersecretary of State for Economic Growth, Energy and the Environment visited New Clark City on 18 May to unveil a project marker and said negotiations on investor protections and project terms would continue over a two-year period. The Undersecretary said more than a dozen US companies, including several billion-dollar firms, joined the delegation and expressed interest in participating in the industrial ecosystem. A Philippine government document presented to the US State Department stated Manila would offer a two-year lease-free grace period as an in-kind contribution to bilateral economic security cooperation. Pax Silica is intended to support a US-led supply chain strategy covering critical minerals, semiconductors, advanced manufacturing and data infrastructure, reducing dependence on China-dominated supply chains. The Undersecretary said vulnerabilities in rare earths, magnets and semiconductor packaging had created a “predictably unreliable” system, adding that concentration of critical inputs in one country created supply chain risks. The Philippines’ Trade Undersecretary said the country aims to move beyond exporting raw nickel and copper towards producing higher-value “green tech metals” used in batteries, semiconductors, data centres and AI-related industries.

VIET NAM
Viet Nam’s economic growth to slow to 6.8% in 2026 from 8% in 2025
(16 May 2026) The World Bank forecast Viet Nam’s economic growth would slow to 6.8% in 2026 from 8% in 2025, citing softer global conditions and rising risks linked to the Iran conflict. The bank said Viet Nam’s outlook remained solid but warned that the external environment had become more challenging due to weaker global demand and higher oil prices. The World Bank said the oil shock had increased downside risks to the economy. Viet Nam continues to target annual GDP growth of at least 10% for 2026 and the remainder of the decade. The World Bank said Viet Nam was facing inflationary pressures related to the Iran war, with April inflation exceeding the government’s 4.5% target. The bank forecast inflation at 4.2% for 2026. It also warned that Viet Nam’s banking sector was experiencing funding strains as credit growth continued to outpace deposit mobilisation. The World Bank said a prolonged Middle East conflict could weaken Viet Nam’s exports and intensify banking sector and currency pressures amid high corporate leverage and limited foreign exchange reserve coverage. The institution urged Viet Nam to transition from a growth model driven by factor accumulation and bank-led financing towards productivity-led growth, deeper capital markets and higher-quality foreign direct investment.

CAMBODIA
Cambodia records over 2.4 million international air passengers in first four months of 2026
(17 May 2026) Cambodia recorded almost 2.43 million international air passengers in the first four months of 2026, down 4% from the same period last year, according to a report issued by the State Secretariat of Civil Aviation (SSCA). A total of 33 international and domestic airlines operated 23,204 flights to Cambodia’s three international airports during the January-April period, representing a 2% increase year on year. Air cargo volume rose 36% to 30,448 tonnes over the same period. Cambodia’s operational international airports are Techo International Airport in Phnom Penh, Siem Reap Angkor International Airport and Sihanouk International Airport. The SSCA said 29 international airlines and four domestic airlines currently operate flights linking Cambodia with ASEAN countries as well as China, South Korea, Japan, Qatar, India and the United Arab Emirates.

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.

THE PHILIPPINES
Peso expected to weaken further against US Dollar despite anticipated rate hikes
(11 May 2026) Analysts said the Philippine peso is expected to weaken further against the US dollar despite anticipated Bangko Sentral ng Pilipinas interest-rate hikes of up to 100 basis points in 2026. Strategists from Sumitomo Mitsui Banking Corp, BNY and MUFG Bank said rising oil import costs linked to the US-Iran war are weighing on the Philippines’ growth outlook and trade balance. The peso has fallen about 3% this year to 60.61 per dollar after reaching a record low in late April, with forecasts pointing to further depreciation toward 62 to 63 against the dollar. Australia & New Zealand Banking Group said the peso is likely to retain a weakening bias due to an uncertain growth outlook, a wide current account deficit and elevated inflation risks, with ANZ forecasting a year-end level of 63.0. BNY said higher oil prices are offsetting the usual currency support from rate hikes by increasing dollar demand for imports and adding downside pressure on economic growth. Market reaction indicated limited investor confidence in the expected rate hikes, with the peso underperforming Asian peers on 24 April despite BSP guidance signalling modest tightening measures. First-quarter GDP growth was 2.8% year-on-year, below estimates, while household consumption recorded its slowest pace in nearly 16 years outside the pandemic period. Global funds have withdrawn more than USD 400 million from Philippine equities since the conflict began, while the stock market benchmark has declined 1.5% this year, making it the second-worst performer in Southeast Asia after Indonesia. Inflation pressures have also intensified, with April consumer prices rising at the fastest pace in three years.

MALAYSIA
New EV policy designed to develop broader domestic automotive ecosystem
(11 May 2026) Malaysia’s Deputy Investment, Trade and Industry Minister said Malaysia’s EV policy is aimed at developing the broader domestic automotive ecosystem rather than protecting Malaysian automobile companies Proton and Perodua. He was responding to concerns over new Ministry of Investment, Trade and Industry rules requiring imported EVs to have a minimum price of MYR 200,000 and motor power of at least 180kW from 01 July, 2026. He said foreign EV manufacturers are being encouraged to establish operations in Malaysia and collaborate with local suppliers to strengthen capabilities, move vendors up the value chain, and support future autonomous driving technologies. The minister said the policy covers the wider industry ecosystem, including European, Japanese, and Chinese carmakers operating in Malaysia. He said EVs priced between MYR 100,000 and RM200,000 can still be offered through local manufacturing arrangements. The minister said the government is focused on building a “complete ecosystem” covering manufacturing, supply chains, infrastructure, talent, and innovation. He said Malaysia’s automotive sector contributed an estimated MYR 80 billion to MYR 95 billion to GDP in 2025 and supported more than 750,000 jobs. He said Perodua works with about 190 vendors while Proton has 116 vendors, with combined procurement spending of nearly MYR 15 billion on local parts suppliers.

MALAYSIA
Industrial production index expands despite decline in mining output
(11 May 2026) Malaysia’s industrial production index expanded 3.1%, below the 3.5% median consensus forecast due to a sharper decline in mining output. Kenanga Research upgraded its 2026 manufacturing IPI growth forecast to 4.3% from 3.5% after stronger-than-expected production performance in the first quarter of 2026, with momentum expected to continue into the second quarter. The firm said manufacturers are accelerating stockpiling activity to mitigate raw material shortage risks linked to Middle East-related supply disruptions. Kenanga Research said stronger first-half 2026 output could partially offset slower growth in the second half if geopolitical tensions and commodity price volatility intensify. The latest manufacturing PMI rose to 51.6 in April, the highest level in four years, indicating a stronger start to the second quarter. Hong Leong Investment Bank said global manufacturing activity improved in April, supported by stronger output and new orders, although some demand reflected frontloading ahead of potential supply shortages and higher costs. HLIB said supply chain risks may continue to affect Malaysia’s commodity-related production, while the electrical and electronics sector remains supported by the global technology upcycle. Both Kenanga Research and HLIB maintained their 2026 GDP growth forecast at 4.5%. Kenanga Research raised its first-quarter GDP growth estimate to 5.1% from 4.7%, citing stronger manufacturing activity. The firm projected second-quarter growth of 5.3%, supported by inventory accumulation and stronger services activity linked to Visit Malaysia 2026, which is expected to offset mining sector weakness. Kenanga Research said growth momentum may moderate in the second half of 2026 if geopolitical tensions persist, the 2025 base effect intensifies, and inventory restocking eases.

VIET NAM
Seafood exports projected to rise to USD 12.3 billion in 2026
(11 May 2026) Viet Nam’s seafood exports are projected to rise by about USD 1 billion in 2026 from USD 11.3 billion in 2025 to approximately USD 12.3 billion, supported by recovering global demand and adaptation efforts by exporters. The secretary general of the Vietnam Association of Seafood Exporters and Producers said seafood export turnover reached nearly USD 4 billion in the first four months of 2026, up more than 14% year-on-year. April exports were estimated at USD 947.8 million, bringing cumulative exports to about USD 3.6 billion, an 11.9% increase. Shrimp and pangasius remained the main export products, while tuna exports declined about 6% due to international market pressure and stricter import regulations. Exports to mainland China and Hong Kong exceeded USD 1 billion in the first four months, recording strong growth from a year earlier. Japan maintained stable growth, while exports to the United States fell by about 6% to 7% due to trade policies and trade remedy cases. Nam said the decline in the US market was mainly linked to technical barriers rather than weaker consumer demand. VASEP said the US and European Union continue to introduce stricter regulations covering environmental protection, traceability and social responsibility. EU supply chain due diligence requirements now require businesses to assess production chains against sustainability criteria, while the EU’s yellow card warning on Vietnam’s seafood exploitation activities remains in place. In the US, anti-dumping investigations, anti-subsidy cases and other trade defence measures have become increasingly complex, although coordination between authorities and businesses has helped lower tariff rates in several cases.

THAILAND
Finance Minister defends government’s THB 400 billion emergency borrowing decree
(11 May 2026) Thailand’s Finance Minister defended the government’s THB 400 billion emergency borrowing decree, including THB 200 billion allocated for energy transition measures, following a petition by the People’s Party to the Constitutional Court challenging the urgency and necessity of the borrowing. The minister said Thailand was facing a complex economic crisis driven primarily by rising energy costs and heavy dependence on imported oil and natural gas. He said the issue had also been discussed at the ASEAN level because Thailand remains highly reliant on external energy supplies. The minister said rising energy costs were directly contributing to inflation, with the latest monthly inflation rate at 2.9% and potentially rising to 4% to 5% due to higher goods and living costs. Food prices have already increased by nearly 10%, prompting the government to prepare measures for further potential crises. He said discussions had already taken place with the Bank of Thailand through a joint meeting of four economic agencies and that full-year inflation was still expected to remain close to the central bank’s 1% to 3% target range. The minister described the current situation as different from the 1997 financial crisis and the Thai Khem Khaeng period because the present crisis directly affects household living costs and livelihoods. He said the emergency borrowing decree was necessary to enable the government to respond quickly to the risk of the crisis spreading further. Responding to criticism referencing Moody’s positive assessment of Thailand’s economy, the minister said the agency’s comments related to the country’s strong international reserves and financial stability rather than domestic economic hardship.

LAO PDR
Lao PDR seeks expanded market opportunities for local products
(10 May 2026) The 12th One District One Product and Model Family Product Exhibition is being held in Vientiane from 04 May to 10 May to promote locally produced goods, support micro, small and medium-sized enterprises and expand market access for Lao products. The event features 170 business units and products from nine provinces across Lao PDR. The One District One Product initiative, introduced in 2013, encourages each district in Vientiane to develop at least five signature products. As of May 2026, Vientiane has certified 77 business units under the programme and developed 319 products across 65 villages. The exhibition also includes seminars on solar energy, competitions covering recycling, weaving and Lao cooking, as well as youth-focused activities including a children’s fashion show and talent performances. Organisers said the exhibition continues to support domestic product promotion and broader economic growth in Lao PDR.

LAO PDR
Lao PDR calls for stronger cooperation with Viet Nam and Cambodia in multiple sectors
(11 May 2026) Lao Prime Minister Sonexay Siphandone called for stronger cooperation between Lao PDR, Viet Nam and Cambodia in transport connectivity, energy, trade, investment and tourism during a working breakfast meeting on 08 May held on the sidelines of the 48th ASEAN Summit in Cebu, the Philippines. The meeting involved Vietnamese Prime Minister Le Minh Hung and Cambodian Prime Minister Hun Manet and was held at the invitation of Viet Nam, according to the Lao Ministry of Foreign Affairs. The three leaders described the Cambodia-Laos-Vietnam trilateral cooperation mechanism as an important platform for regular consultations and closer cooperation among the neighbouring countries. They reaffirmed commitments to strengthening longstanding friendship, solidarity and mutual assistance between the three nations. The leaders also noted continued expansion of cooperation in politics, defence and security based on mutual trust and understanding. Sonexay thanked his Vietnamese and Cambodian counterparts for congratulating him following his recent re-election. He emphasised the need to strengthen practical cooperation in priority sectors, particularly transport connectivity, energy cooperation, trade, investment and tourism. Sonexay also called for closer coordination and mutual support in regional and international forums to protect common interests. The three leaders agreed that continued high-level exchanges and meetings would further strengthen unity and deepen trilateral cooperation. The meeting reflected the three countries’ commitment to maintaining close coordination on regional and international issues.

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
Manufacturing sector expands in April despite Middle East-linked cost pressures
(04 May 2026) Malaysia’s manufacturing sector expanded in April, with the S&P Global PMI rising to 51.6 from 50.7 in March, indicating moderate improvement despite cost pressures linked to the Middle East conflict. Part of the increase was attributed to safety-stock building as firms responded to geopolitical risks. Manufacturers added jobs for a second consecutive month, with employment growth described as modest but the strongest so far in 2026. Input cost inflation reached a 45-month high due to higher energy and material costs, prompting firms to raise selling prices at the fastest rate on record. Business confidence weakened for another month, falling to its lowest level in eight months amid ongoing uncertainty. Malaysia’s GDP grew 5.3% year-on-year in Q1 2026, below expectations, as manufacturing and services activity slowed following US-Israel military strikes on Iran in late February. Bank Negara Malaysia maintained its 2026 growth forecast at 4% to 5%, supported by domestic demand and investment. The outlook for the manufacturing sector remains dependent on developments in the Middle East, with firms taking measures to mitigate supply and cost disruptions.

MALAYSIA
Banking sector to face increasing headwinds in coming quarter due to global energy shocks
(04 May 2026) Malaysia’s banking sector is expected to encounter increasing headwinds in the coming quarters due to global energy shocks linked to the Middle East conflict, with MBSB Research describing the outlook beyond Q1 2026 as “precarious”. First-quarter performance, including loan growth and asset quality, remained stable, but the full second- and third-order effects of rising costs remain uncertain. Cost pressures are shifting from businesses to mass-market consumers, while government spending cuts are expected to weigh on both retail and business loans. Sustained high energy prices may dampen corporate investment and household spending, with private consumption accounting for about 60% of GDP, increasing sensitivity to consumer sentiment. Kenanga Research highlighted vulnerabilities in unsecured lending segments such as personal financing, credit cards, and SMEs, potentially driving banks towards lower-risk, asset-backed lending. Bank Negara Malaysia data showed private sector loan growth held steady at 5.6% year-on-year in March, while corporate bond growth slowed to 5.8% from 7.4%.

MALAYSIA
Malaysia increasing biodiesel adoption to address rising energy costs
(04 May 2026) Malaysia is increasing biodiesel adoption to address rising energy costs and reduce fuel import dependence, supported by its palm oil industry. The government is spending over USD 1.8 billion monthly on fuel subsidies, intensifying the push for alternatives. Malaysia currently mandates a B10 blend and is targeting B15, with longer-term goals of B20 or B30, requiring infrastructure upgrades across 34 blending depots. Upgrading facilities is estimated to cost about MYR 600 million (USD 151 million) and may take one to two years. There are one million diesel vehicle users, indicating significant demand potential. The Malaysian Biodiesel Association states production capacity is 2.4 million tonnes annually, with 1.3 million tonnes produced last year and capacity to supply 400,000 tonnes for B15. Biodiesel costs MYR 4.5 per litre compared to diesel at MYR 6.2, providing economic incentives for adoption. Malaysia lags regional peers such as Indonesia, which has implemented B50, partly due to lower fuel import dependency at 15.6% versus Indonesia’s 35.2%in 2023. Only 1.3 million tonnes, or 6.5%, of Malaysia’s 20 million tonnes of palm oil output is used for biodiesel, indicating underutilisation. Industry representatives, including MBA president Tee Lip Teng, are urging rapid progression to B15 and beyond without reverting to lower blends. Some motorists remain concerned about potential engine impacts from higher blends. The government positions biodiesel as central to achieving net-zero emissions by 2050, with potential greenhouse gas reductions of up to 80% compared to conventional diesel.

LAO PDR, VIET NAM
Lao PDR exports record 2.92 billion kWh of electricity to Viet Nam in Q1 2026
(03 May 2026) Lao PDR exported a record 2.92 billion kWh of electricity to Viet Nam in Q1 2026, representing 3.8% of total output and an increase of nearly 120% year-on-year. The growth was driven by newly commissioned renewable projects in 2025 and expanded cross-border transmission infrastructure, including the 81km Tuong Duong–Do Luong line that began operations in November 2025. Vietnam Electricity (EVN) reported that 47 Lao projects with a combined approved capacity of 8,260 MW had been authorised by end-2025, with 2,379 MW already operational. The 600 MW Monsoon Wind Power Project in Sekong and Attapeu provinces commenced commercial operations in late 2025, becoming Southeast Asia’s largest wind farm and Asia’s first cross-border renewable project, supplying power via a 500 kV line under a 25-year power purchase agreement with EVN. The 250 MW Truong Son Wind Farm in Bolikhamxay province is over 80% complete and will connect to Viet Nam via the 220 kV Do Luong substation. The first phase of the Savan 1 wind plant in Savannakhet province is largely completed and is expected to generate 0.9 billion kWh annually with grid integration above 90%. Transmission capacity expansions by EVN’s National Power Transmission Corporation have strengthened the Lao PDR–Viet Nam power corridor. Viet Nam has set targets to import 5,000 MW of electricity from Lao PDR by 2030 and 11,000 MW by 2050.

JAPAN, VIET NAM
Japan and Viet Nam agree to strengthen cooperation in critical minerals, energy, and economy security
(02 May 2026) Japanese Prime Minister Sanae Takaichi and Vietnamese Prime Minister Le Minh Hung agreed to strengthen bilateral ties with a focus on energy cooperation, critical minerals, and economic security under their Comprehensive Strategic Partnership. Japanese investment into Viet Nam declined approximately 75% year-on-year to USD 233 million in Q1 2026, while bilateral trade increased 12.3% to USD 13.7 billion. Both sides prioritised coordination on critical minerals to secure stable supplies and reinforce supply chains. Six agreements were signed covering infrastructure, climate action, agriculture, technology, digitalisation, and space cooperation. Japan will support Viet Nam’s energy security under the USD 10 billion Power Asia Initiative by assisting crude oil supply arrangements for the Nghi Son Refinery and Petrochemical Complex. Discussions also covered cooperation in artificial intelligence, semiconductors, and space. Viet Nam is seeking external support for oil supplies amid disruptions linked to the Middle East conflict. Takaichi is scheduled to meet additional Vietnamese leaders and deliver a speech marking ten years since Japan’s “Free and Open Indo-Pacific” strategy, emphasising regional autonomy and resilience. Vietnam reaffirmed support for Japan’s regional initiatives aligned with the Asean Outlook on the Indo-Pacific.

INDONESIA
Indonesia records trade surplus of USD 3.32 billion in March 2026
(04 May 2026) Indonesia recorded a trade surplus of USD 3.32 billion in March, exceeding the USD 2.41 billion forecast and rising from USD 1.28 billion in February, as import growth undershot expectations despite declining exports. Exports fell 3.1% year-on-year to USD 22.53 billion, below expectations of a 0.96% increase, driven by weaker shipments of mining products such as copper and lignite, as well as cocoa, coffee, and tea. Analysts attributed the decline to slower global demand, particularly from China, and the impact of earlier front-loading of exports to the United States. Imports rose 1.51% to USD 19.21 billion, significantly below the 10% forecast and February’s 10.85% growth, reflecting normalisation after pre-holiday front-loading and a weaker rupiah, which hit a record low of 17,385 per US dollar. Economists indicated that geopolitical tensions linked to the Iran conflict have not yet materially affected March data but pose downside risks to exports and could increase fuel import costs. Maybank Indonesia expects the trade surplus to narrow in coming months due to rising oil prices and potential increases in fuel imports. Indonesia’s April inflation eased to 2.42% from 3.48% in March, below the 2.76% forecast, supported by base effects linked to earlier electricity tariff discounts. Core inflation moderated to 2.44% from 2.52%. The government has increased subsidies to contain fuel price pressures, while Bank Indonesia expects inflation to remain within its 1.5% to 3.5% target range through 2027. The central bank is likely to maintain its policy rate at 4.75% if subsidised fuel prices are sustained.

INDONESIA
Bank Indonesia intervenes in foreign exchange markets after rupiah sets record low
(05 May 2026) Bank Indonesia intervened in foreign-exchange markets after the rupiah fell 0.2% to a record low of 17,422 per US dollar. Intervention measures included offshore and domestic non-deliverable forwards, spot transactions, and purchases of government bonds in the secondary market, according to the executive director of monetary and securities management at Bank Indonesia. The currency decline reflects investor outflows from economies most exposed to rising oil prices linked to the Iran war. Regional currencies also weakened, with the Indian rupee reaching a record low and the Philippine peso approaching its historic trough. Bank Indonesia stated it will continue market intervention to maintain orderly market conditions and stabilise the rupiah in line with its fundamental value.

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, INDONESIA
Iran war raises export of Malaysian and Indonesian crude palm oil to multi-month highs
(20 April 2026) Demand for crude palm oil (CPO) has increased due to the Iran war, prompting stockpiling and lifting Malaysian and Indonesian exports to multi-month highs while raising supply concerns. CPO prices are under near-term upward pressure, supported by inventory build-ups and higher crude oil prices boosting biofuel demand. Malaysian palm oil futures reached their highest level since December 2024 in April following the conflict. Malaysia’s CPO exports rose 41% month on month in March to 1.6 million metric tons, the highest since October 2025, with strong demand from China, the Middle East, the U.S. and the EU. Exports to the Middle East surged 547.2% to 280,000 metric tons, while shipments to China and the U.S. rose 132.6% to 233,000 metric tons and 210.5% to 169,000 metric tons respectively. The EU remained the largest buyer, accounting for 23.4% or 963,000 metric tons of Malaysia’s exports from January to March 2026. Indonesia’s palm oil exports increased 36.26% year on year to 4.54 million tons in January–February. Rising fertiliser costs, up about 50% due to supply disruptions, are leading smallholders to reduce planting and fertiliser use, with potential production declines flagged by industry groups. Weather risks, including a 50%–60% probability of El Nino between July and September, could reduce fresh fruit bunch output by up to 16% and CPO production by up to 14% in subsequent years. Ageing plantations in Malaysia, with 35% of trees projected to be 19 years or older by next year, add to supply constraints. Indonesia plans to raise its biodiesel blending mandate to B50 from 01 July, potentially diverting 1.5 million tons of CPO from exports.

VIET NAM
Viet Nam’s housing market shifts away from cash purchases towards mortgage financing
(21 April 2026) Viet Nam’s housing market is undergoing a structural shift towards mortgage financing as rising property prices and changing consumer behaviour make cash purchases less feasible. Home loan value reached VND 2 quadrillion by Q3 2025, up from VND 1.1 quadrillion in 2020, while mortgages increased from 8.7% of total credit in 2017 to 12.7% last year, according to JLL. Apartment prices rose 20%–30% nationwide in 2025, with Ho Chi Minh City averaging VND 111 million per square metre, implying around USD 210,000 for a 50-square metre unit. Housing affordability has deteriorated, with prices exceeding 19 times median income, driving reliance on bank lending. Mortgage products have expanded, with typical structures offering fixed rates around 8% for 2–3 years before shifting to floating rates of 12%–14%, and loan tenors ranging from 15 to 35 years or up to 50 years. Rising interest rates, now above 10%, have dampened credit demand and increased repayment burdens, with some borrowers facing payment increases of up to 50% after promotional periods expire. Property transactions declined 14% year on year in Q1 to 115,650 units, indicating a slowdown, although full-year 2025 sales rose 7.7% to 579,718 units. Credit growth concerns have intensified, with the State Bank of Vietnam setting a 15% target for 2026 after 17.87% growth in 2025, amid risks of bad debt. Fitch Ratings warned that rapid credit expansion could increase exposure to speculative lending and asset price inflation. Developers and banks are expanding financing incentives, including interest subsidies and preferential rates for buyers under 35, while authorities are considering measures such as taxes and caps on second-home mortgages. Mortgage usage is estimated at 50%–70% among mid-market buyers in some projects, reflecting growing middle-class participation. Analysts describe the shift as a long-term trend despite short-term pressures from higher rates and external shocks, including the Middle East conflict.

MALAYSIA
Malaysian ringgit expected to continue strengthening in 2026
(20 April 2026) The Malaysian ringgit is projected by strategists to retest its year-to-date peak against the US dollar, with resistance identified at 3.88 compared with current levels near 3.95, following a recovery from a 4% decline in March linked to weakened global risk sentiment from the Iran war. Loomis Sayles & Co. and Deutsche Bank AG expect continued strengthening, with Loomis Sayles stating the currency could reach new 2026 highs supported by resilient growth, credible macroeconomic management, limited exposure to geopolitical flashpoints, and a diversified economy. Malaysia’s export strength and rising investment in its data centre sector, involving companies such as Oracle Corp., Amazon.com Inc., Alibaba Group Holding Ltd., and ByteDance Ltd., are key drivers of currency support. The economy expanded 5.5% in the first quarter, exceeding expectations and following 5.2% growth in 2024, with exports as a primary contributor. Investors are monitoring upcoming trade data for indications of any impact from the US-Iran conflict on export performance. Deutsche Bank highlighted Malaysia’s position as a net energy exporter, strong pre-conflict cyclical fundamentals, and exposure to global technology capital expenditure as supportive factors, forecasting the ringgit to trade in the 3.85 to 3.90 range. Oversea-Chinese Banking Corp. indicated support at 3.90 to 3.92, with potential for further gains if this range is breached. Analysts noted that growth momentum, elevated commodity prices, and sustained foreign inflows continue to underpin the currency outlook.

MALAYSIA
Economy expands 5.2% year-on-year in first quarter of 2026, moderating from fourth quarter of 2025
(17 April 2026) Malaysia’s economy expanded 5.3% year-on-year in the first quarter of 2026, according to advance estimates, moderating from 6.3% growth in the fourth quarter of 2025. Growth in the January to March period was driven by continued expansion in manufacturing, services and construction, although momentum slowed compared with the previous quarter. The mining and quarrying sector contracted by 1.1% due to lower crude oil and natural gas production. Malaysia’s Chief Statistician stated that the economy remains resilient despite rising global uncertainties and elevated oil prices linked to geopolitical tensions. Final first-quarter GDP data will be released on 15 May. Bank Negara Malaysia recently revised its 2026 growth forecast upward to a range of 4% to 5% from 4% to 4.5%, supported by household spending, exports and tourism. The economy grew 5.2% in 2025, exceeding expectations with record trade and approved investment levels. The central bank has warned that prolonged Middle East conflict could disrupt supply chains and increase fuel prices, posing risks to growth and inflation. Separate data showed consumer prices rose 1.7% year-on-year in March, in line with forecasts and up from 1.4% in the previous month.

THAILAND
Thailand mulls lifting public debt ceiling to enable additional borrowing
(20 April 2026) Thailand’s government is considering lifting its voluntary public debt ceiling to 75% of GDP from 70% to enable additional borrowing of about THB 1 trillion baht (approximately USD 30–31 billion), according to officials from the finance ministry and Prime Minister Anutin Charnvirakul’s office. The proposal, which remains under discussion and requires approval from the fiscal and monetary policy committee chaired by Anutin, is one of several options to address economic pressures from global energy shocks. The structure and allocation of the potential new borrowing have not been finalised. Separately, the government is preparing an emergency decree to raise up to THB 500 billion baht. Thailand’s Finance Minister indicated openness to increasing the debt limit if funds are directed towards investments that strengthen fiscal resilience. Government measures already announced include cash transfers to low-income groups, transport subsidies, and concessional loans for SMEs. A government spokesman stated that all funding options are being evaluated, but declined to confirm the debt ceiling increase. The policy shift reflects pressure on Thailand, a net energy importer, to create fiscal space amid rising costs linked to the Iran war, with inflation risks and weaker growth outlook. Economists have reduced growth forecasts as higher fuel prices weigh on consumption, exports, and tourism.

VIET NAM
Vingroup commences construction of high-speed rail line in northern Viet Nam
(13 April 2026) Vingroup has commenced construction of a high-speed rail line in northern Viet Nam as part of a planned USD 5.6 billion network, targeting a reduction in travel time from Hanoi to key northern destinations from about two hours to 23–30 minutes. The project aims to connect Hanoi with Bac Ninh, Hai Phong and Quang Ninh by end-2028, covering 120 km with trains operating at speeds of up to 350 km/h. Siemens Mobility will supply trains, infrastructure and services under a turnkey arrangement, alongside an agreed technology transfer programme. Vingroup confirmed the northern system would become Viet Nam’s first inter-regional bullet train if completed on schedule, although land clearance costs are excluded from the stated budget. The initiative follows Vingroup’s December withdrawal from the 1,541-km, USD 68 billion North–South high-speed rail project to focus on other developments. Its subsidiary VinSpeed is also targeting completion of a separate high-speed line linking Ho Chi Minh City to Can Gio by late 2028. The northern route will improve connectivity to Hai Phong, where Vingroup’s EV unit VinFast operates a production hub. Siemens Mobility cited extensive operational scale and safety performance alongside the planned technology transfer. The launch coincides with the start of a new five-year National Assembly term. Separately, Viet Nam’s president To Lam is scheduled to visit China to discuss a border rail partnership.

THE PHILIPPINES
The Philippines calls for support for job creation and climate financing at G-24 meeting
(19 April 2026) The Philippines called for expanded global support for job creation, financing and climate resilience at the G-24 Ministers’ and Governors’ Meeting on 14 April, citing increasing pressure on developing economies from geopolitical tensions and climate risks. The Philippines’ Finance Secretary stated that overlapping global challenges are constraining fiscal space and limiting countries’ capacity to respond. He urged scaled-up and more flexible financing, including budget support and emergency funding mechanisms, to help absorb external shocks while maintaining social services and development programmes. He also advocated stronger mobilisation of private capital to increase investment in infrastructure, energy transition and digital services to support employment and growth. He highlighted the need to strengthen human capital development to ensure economic reforms deliver quality jobs and improved livelihoods. He emphasised enhancing climate and disaster resilience, particularly for vulnerable countries such as the Philippines, through better access to climate financing and technical assistance. He called for deeper multilateral cooperation to reinforce the global financial system and support inclusive and sustainable development.

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.

BRUNEI DARUSSALAM, MALAYSIA, AUSTRALIA
Australian Prime Minister Anthony Albanese visits Brunei Darussalam and Malaysia
(15 April 2026) Prime Minister Anthony Albanese travelled to Brunei Darussalam to secure urea supply amid disruptions caused by the Strait of Hormuz closure linked to conflict in the Middle East. Australia imports over two-thirds of its urea from the Middle East, with 65% sourced there in 2025. Albanese met Bruneian Sultan Haji Hassanal Bolkiah to discuss exchanging urea for Australian agricultural products and maintaining flows of fuel and key inputs. Brunei accounted for 11% of Australia’s urea imports and about 9% of diesel imports last year, positioning it as a key alternative supplier. Australia typically imports about 3.5 million tonnes of urea annually, but April shipments have fallen to 300,000 tonnes compared with 600,000 tonnes a year earlier, with only one vessel arriving from the Middle East. Import prices have risen sharply from about USD 700 per tonne in mid-February to more than USD 1,550 per tonne, more than doubling due to supply constraints. Following his trip to Brunei Darussalam, Albanese visited Malaysia, where he met with Malaysian Prime Minister Anwar Ibrahim. Anwar stated that Petronas will prioritise supplying excess fuel to Australia following discussions with Albanese on strengthening energy and agricultural trade. Anwar indicated domestic demand remains the priority, but confirmed assurances were obtained from Petronas to support Australia amid Middle East-related supply disruptions. Malaysia signalled interest in exchanging urea supplies to Australia for mineral phosphates sourced from Australia. Australia remains a key supplier of natural gas to Malaysia, accounting for about 20% of its domestic imports, alongside exports of wheat, lamb and beef.

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.

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.