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.

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.

VIET NAM, THE PHILIPPINES
World Bank upgrades Viet Nam and the Philippines to upper-middle-income status
(02 July 2026) The World Bank reclassified Viet Nam and the Philippines as upper-middle-income economies on 01 July after their 2025 gross national income per capita reached USD 4,970 and USD 4,850 respectively, exceeding the USD 4,636 threshold. Viet Nam had been classified as lower-middle-income since 2009, while the Philippines had remained in that category since the late 1980s. The World Bank attributed Viet Nam’s upgrade to its export-led growth model and the Philippines’ to broad-based economic expansion across major industries. The reclassification means all five major Southeast Asian economies – Singapore, Malaysia, Thailand, Viet Nam and the Philippines – are now in the upper-middle-income tier or higher. The Philippines’ Economic Planning Secretary said the upgrade reflected sustained inclusive growth, stronger economic fundamentals and continued progress on the country’s development agenda despite global and domestic shocks. Viet Nam is targeting annual double-digit economic growth in 2026, supported by business-friendly reforms and large-scale infrastructure investment. The higher income classification may reduce access to concessional development financing, including below-market-rate loans used by the Philippines for infrastructure, disaster recovery and social programmes. The Union Bank of the Philippines said the upgrade indicates greater economic self-sufficiency, while the Philippines’ Economic Planning Secretary said any decline in concessional official development assistance should be offset by stronger fundamentals and improved market access, although income disparities and economic challenges remain.

VIET NAM
Viet Nam considering expanding coal-fired power generation due to LNG supply disruptions
(08 July 2026) Viet Nam is considering expanding coal-fired power generation as part of revisions to its national power development plan to strengthen energy security following disruptions to liquefied natural gas (LNG) supplies caused by the US-Iran conflict. In a 07 July statement, the Ministry of Industry and Trade said recent Middle East conflicts had affected LNG supply and proposed adding alternative electricity sources, including coal-fired capacity on an appropriate scale. Viet Nam had planned for LNG to account for up to 12% of its power mix by 2030, but the country, which began importing LNG only in 2023, currently relies on the spot market where prices are about 70% higher than pre-war levels. LNG deliveries through the Strait of Hormuz, which previously handled around one-fifth of global LNG shipments, have remained vulnerable despite an interim peace agreement, with recent attacks including one on a Qatari LNG tanker. The supply disruptions are prompting several Asian countries to diversify their energy sources, with some increasing coal use while others accelerate renewable energy development. Coal remains Viet Nam’s dominant power source, accounting for more than half of electricity generation in the first half of the year, according to state-owned utility EVN.

MALAYSIA
Analysts expect ringgit to recover due to central bank measures and strong economic fundamentals
(06 July 2026) Analysts expect the ringgit to recover after ending June as Asia’s weakest-performing currency, supported by Bank Negara Malaysia’s (BNM) measures to increase foreign-exchange inflows and the country’s strong economic fundamentals. Royal Bank of Canada forecasts the ringgit to strengthen to MYR 3.95 per US dollar by year-end, while Australia & New Zealand Banking Group projects MYR 3.80, its strongest level since 2015. The ringgit closed 0.2% higher at 4.0722 per US dollar on Friday and has outperformed all Asian currencies since BNM announced on 24 June that it would intensify efforts to encourage the repatriation and conversion of companies’ overseas earnings. RBC said Malaysia’s solid trade surplus, sustained inflows into ringgit-denominated debt and measures to increase conversion of foreign earnings should support further currency appreciation. Malaysia’s exports rose 45% year on year in May, lifting the monthly trade surplus to a record MYR 40 billion (USD 9.8 billion), while demand linked to artificial intelligence, data centres and electrical and electronic products continued to support the economy. BNM data showed foreign investors purchased about USD 2.1 billion of Malaysian bonds through 29 June, putting the market on course for its largest monthly inflow since May 2025. Analysts noted that a more hawkish US Federal Reserve and domestic political uncertainty, including upcoming state elections testing support for Prime Minister Anwar Ibrahim’s ruling coalition, remain key risks to the currency’s outlook.

INDONESIA
S&P Dow Jones Indices places Indonesia on watchlist for possible downgrade
(08 July 2026) S&P Dow Jones Indices (S&P DJI) has placed Indonesia on a watchlist for a possible downgrade from emerging to frontier market status in its 2027 review, citing concerns over stock ownership transparency and warning that special treatment for Indonesian securities could be introduced if conditions deteriorate. S&P DJI said Indonesia’s market classification would be reassessed at the next annual review if these concerns remain unresolved for one year after any special measures are implemented. The announcement follows MSCI’s ongoing review of Indonesia’s emerging market status, with a decision expected in November. Since MSCI raised similar concerns in January over concentrated and opaque ownership structures affecting price formation, the Jakarta Composite Index has fallen 31% this year and declined a further 1% on Wednesday. Indonesian authorities have responded by doubling the minimum free float requirement to 15%, with companies given up to three years to comply, and lowering the shareholder disclosure threshold from 5% to 1%. Allspring Global Investments said investors are likely to remain cautious until the reforms are fully implemented and shown to address the concerns of major index providers. Investor sentiment has also been affected by concerns over President Prabowo Subianto’s fiscal policies and increased state intervention in the private sector. The rupiah has depreciated 8% against the US dollar this year and is trading at record lows.

INDONESIA, CANADA
Canada-Indonesia trade remains below potential despite approaching USD 7 billion annually
(10 July 2026) The Canadian Ambassador to Indonesia said trade between the two countries remains below its potential despite approaching USD 7 billion annually, with the newly signed Indonesia-Canada Comprehensive Economic Partnership Agreement (ICA-CEPA) expected to expand trade and investment. Canada completed ratification of the agreement in May, while Indonesia is expected to ratify it in the coming months through a presidential regulation. Under the agreement, Indonesia will eliminate or reduce tariffs on 85.9% of its tariff lines for Canadian goods, while Canada will remove duties on 90.5% of its tariff lines. Indonesia recorded approximately USD 4.4 billion in bilateral trade with Canada in 2025, comprising nearly USD 1.7 billion in exports, led by electrical machinery and equipment, and almost USD 2.7 billion in imports. The Canadian ambassador identified opportunities for Indonesian exporters in agriculture, textiles, manufacturing, fabrics, sustainable forestry, furniture and small and medium-sized enterprise products, while highlighting energy, clean technology and aerospace as key sectors for Canadian companies in Indonesia. He said the agreement also provides greater regulatory certainty for businesses and investors through provisions covering critical minerals, SMEs, agricultural protocols and sanitary and phytosanitary dialogue. The ambassador noted growing opportunities for Indonesian investment in Canada, including interest in potash mining and Royal Golden Eagle’s existing investment in a liquefied natural gas project in British Columbia, with expansion under discussion. He added that both countries aim to significantly increase bilateral trade and investment over the next decade, with artificial intelligence and clean technology expected to become important areas of future economic cooperation.

THAILAND
Board of Investment approves nine investment projects worth THB 66.3 billion
(08 July 2026) Thailand’s Board of Investment (BOI) has approved nine investment projects worth 66.3 billion (USD 1.99 billion) across artificial intelligence, advanced electronics, aviation, clean energy and food sectors. The secretary general of the BOI said the projects demonstrate continued multinational investment in Thailand’s industrial and technology capabilities. The BOI has expanded its energy panel into the Subcommittee on Energy Management for Data Center Investment and Project Screening, chaired by the Energy Minister, to assess data centre projects on resource use, environmental impact and clean energy sourcing before tax incentives are granted. Japan’s Datasection (Thailand) will invest THB 7.8 billion (USD 235.2 million) in GPU server infrastructure in Bangkok and Pathum Thani. South Korea’s Doosan Electro-Materials (Thailand) will invest THB 6 billion (USD 180.2 million) in Samut Prakan to produce copper-clad laminate and prepreg for printed circuit boards, while Taiwan Union Technology (Thailand) will invest THB 6.3 billion (USD 189.2 million) in Chonburi to manufacture similar materials for AI servers and data centres. Fulltech Fiber Glass (Thailand) will invest THB 3.3 billion (USD 99.4 million) in Chachoengsao to produce specialised glass fibre fabric for PCB manufacturing. Nestlé (Thai) will invest THB 22.9 billion (USD 688.7 million) to expand coffee production in Samut Prakan for domestic and regional markets. Thai Airways International received approval for two projects worth THB 14.3 billion (USD 430.2 million) to lease eight passenger aircraft for its international network. Lomrak Green Energy will invest THB 5.6 billion (USD 168.7 million) in two wind power projects in Lopburi with a combined capacity of 120MW. The government also announced a seven-point energy action plan, including a dedicated electricity tariff for data centres, expanded clean power trading, accelerated grid investment and measures to support future large-scale digital infrastructure projects.

SINGAPORE
Temasek Holdings to increase AI-related exposure two-fold over next five years
(08 July 2026) Temasek Holdings plans to increase its artificial intelligence (AI)-related exposure from 6% of its portfolio at end-March to as much as 15% by 2031, focusing on energy and data centres, semiconductors, cloud services, foundation models, and AI software and applications. The state investor reported that the net value of its portfolio exceeded SGD 400 billion for the first time, rising from SGD 350 billion a year earlier. The CEO of Global Investments said Temasek will expand its AI investments in a disciplined manner while managing overall portfolio risk and expects long-term returns despite potential market volatility and overvaluation. Temasek’s existing AI investments include OpenAI, Anthropic, Nvidia, SK Hynix and Samsung Electronics. The firm also sees opportunities in China, particularly in AI, robotics and advanced manufacturing, with its China exposure increasing to 17% from 16% a year earlier, while exposure to the Americas rose to 26% from 25%. Temasek’s Chief Investment Officer said geopolitical risks are a key consideration in investment decisions. During the financial year, Temasek invested SGD 39 billion and divested SGD 24 billion, while reporting annualised returns of 8% over 20 years and 7.5% over 10 years. The investor also plans to increase infrastructure exposure, including renewable energy, nuclear energy, decarbonisation technology and grid modernisation, from 1% to 5% by 2031, and expand private credit exposure from 2% to 5%, with a focus on senior secured lending and diversified credit strategies.

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
Three biggest foreign banks in Indonesia remit USD 640 million from country
(29 June 2026) The Indonesian units of Citigroup, Standard Chartered and HSBC remitted a combined IDR 11.5 trillion (USD 640 million) to their parent companies during 2024-2025, slightly exceeding their combined profits over the period. The remittance ratios were above historical averages, with Citigroup transferring nearly all of its combined 2024-2025 earnings, Standard Chartered remitting more than IDR 1.1 trillion in 2024, equivalent to almost four times its annual profit, and HSBC sending almost IDR 3 trillion in 2025 despite recording less than IDR 2.2 trillion in net income. According to bankers cited in the report, the higher remittances reflect reduced exposure to Indonesia amid concerns over President Prabowo Subianto’s increasingly state-focused economic policies, market volatility and pressure to support government priorities. Danantara, the state sovereign wealth fund overseeing assets valued at about USD 900 billion, reportedly sought commitments of up to USD 1 billion from each of 10 banks for a proposed USD 10 billion loan facility. The report also cited concerns over discussions on expanding banks’ role in financing government programmes, although Indonesia’s Financial Services Authority (OJK) stated that lending decisions remain based on banks’ commercial judgement and that it does not intervene. The increased profit repatriation coincides with earlier reductions in Indonesian operations by the three banks, including Citigroup’s 2022 sale of its retail banking business, Standard Chartered’s 2023 divestment of a retail loan portfolio, and HSBC’s planned sale of its retail and wealth assets. Analysts also said the weaker rupiah has reduced the attractiveness of retaining earnings in Indonesia.

THE PHILIPPINES, CHINA
The Philippines courts Chinese investors from the Greater Bay Area
(30 June 2026) The Philippines’ Trade Secretary said at the South China Morning Post’s GBA-Asean Summit 2026 in Hong Kong that the Philippines is positioning itself as a gateway for Greater Bay Area businesses expanding into Southeast Asia, highlighting its strategic location, young English-speaking population of around 115 million, and digitally skilled workforce. She said the country could complement the Greater Bay Area’s research and development capabilities while providing a platform for regional expansion. As 2026 ASEAN chair, the Philippines is promoting stronger ASEAN-Hong Kong economic ties, with the ASEAN Digital Economy Framework Agreement completed in May and targeted for signing by November to support partnerships in e-commerce and digital innovation. The Secretary cited a 15.4% increase in Philippine exports in 2025 as evidence of strong demand for the country’s goods. She identified semiconductors, electronics, manufacturing services, renewable energy and agricultural exports including coconuts, pineapples, bananas, ube and kalamansi as priority sectors for collaboration with Hong Kong. The Philippine Economic Zone Authority approved PHP 140.7 billion (USD 2.3 billion) of investments in the first half of 2026, representing a 94% year-on-year increase. The Secretary noted that China remains the Philippines’ largest trading partner, with bilateral trade reaching USD 7.72 billion in April, comprising USD 5.69 billion of Chinese exports to the Philippines and USD 2.03 billion of Philippine exports to China.

THE PHILIPPINES
The Philippines approves record 12% minimum wage increase for more than 1.1 million workers
(30 June 2026) The Philippines approved a record 12% minimum wage increase for more than 1.1 million workers in Metro Manila, with the Labour Secretary stating that the adjustment will take effect in two stages: PHP 60 per day from 19 July and a further PHP 25 in January 2027. Once fully implemented, the daily minimum wage for non-agriculture workers will rise by PHP 85 to PHP 780, while wages for agriculture, service and retail establishments employing 15 workers or fewer, and manufacturing establishments with fewer than 10 workers, will increase by 13% to PHP 743 per day. The Department of Labour described the increase as the largest single wage adjustment ever granted in the capital region. The Trade Union Congress of the Philippines criticized the increase as insufficient and opposed its phased implementation, citing a decline in workers’ purchasing power. The wage adjustment follows inflation easing to 6.8% in May from a three-year high of 7.2% in April, although inflation remains above the central bank’s 4% tolerance ceiling.

MALAYSIA
Malaysia’s headline inflation increases to 2.0% in May 2026 from 1.9% in April
(30 June 2026) Bank Negara Malaysia (BNM) said headline inflation increased to 2.0% in May 2026 from 1.9% in April, while core inflation remained unchanged at 2.0%. The increase was mainly driven by higher prices for electricity, following the imposition of a surcharge due to increased generation costs, and vegetables. The increase was partly offset by lower inflation for domestic air travel and retail fuel, particularly RON97 and diesel. Credit to the private non-financial sector grew 6.4% in May from 5.8% in April, supported by stronger business financing, with outstanding corporate bonds rising 8.0% from 6.2% and outstanding business loans increasing 7.0% from 6.2%, primarily for working capital. Household loan growth remained steady at 5.5%. Manufacturing industrial production growth accelerated to 8.3% in April from 5.5% in March, with export-oriented industries expanding 8.5% due to higher production of electrical and electronics, refined petroleum and chemical products, while domestic-oriented industries grew 8.0%, supported by motor vehicles, food processing and construction-related materials. BNM said the ringgit appreciated 0.1% against the US dollar despite global uncertainties related to the West Asia conflict and US Federal Reserve policy expectations, outperforming regional currencies. The 10-year Malaysian Government Securities yield remained broadly stable, while the FTSE Bursa Malaysia KLCI declined 2.3% due to non-resident outflows.

THE PHILIPPINES
Rising global demand for Philippines’ ube outpaces domestic supply
(30 June 2026) Rising global demand for the Philippines’ ube is outpacing domestic supply, with the president of the Bohol Ube Growers Association stating that his group produces between five and eight tonnes every seven months but cannot meet requests for two tonnes per month, with ubi kinampay currently selling for PHP 90-100 per kilogram. Philippine ube exports exceeded USD 3 million in 2025, more than double the USD 1.4 million recorded in 2024, with key markets including Canada, the Middle East, Asia, the US, South Korea and Europe. The Department of Agriculture has announced plans to institutionalise the ube industry through standardisation and export-ready systems, allocating PHP 2.6 million to expand production, while the US Department of Agriculture has committed USD 34 million to strengthen the ube value chain, including processing. The Bohol Ube Growers Association said its association recently received a harvesting facility enabling production of ube powder, extending shelf life and increasing its value to PHP 1,800 pesos per kilogram. Bohol has applied for geographical indication (GI) registration for ubi kinampay to protect its origin, quality and market identity amid expanding production in Viet Nam and China. Researchers from the Philippine Root Crop Research and Training Centre said ube has become a high-value export crop with yields potentially exceeding 3 kg per plant and up to 20,000 plants per hectare under intensive cultivation, although seasonal production, disease susceptibility and the limited adaptability of the kinampay variety continue to constrain supply. Researchers are developing cultivation techniques and alternative varieties to support year-round production and improve competitiveness in the global ube market.

VIET NAM
Vietnam Airlines aims to remain profitable despite more challenging environment
(30 June 2026) Vietnam Airlines aims to remain profitable in 2026 despite higher jet fuel prices, exchange rate volatility and rising operating, maintenance, logistics and environmental compliance costs. The airline estimates average Jet A1 fuel prices of USD 128.54 per barrel in 2026, up nearly 48% from 2025, increasing fuel costs by an estimated VND 11.9 trillion, although prices have eased to USD 112-115 per barrel following the reopening of the Strait of Hormuz and a US-Iran ceasefire. Assuming fuel prices average USD 120 per barrel in the second half of 2026, Vietnam Airlines forecasts pre-tax profit of VND 101 billion for the parent company and VND 510 billion on a consolidated basis. The airline is implementing cost controls, optimizing its route network and improving fleet utilisation while expanding international services to Amsterdam, Phuket and Colombo and increasing frequencies to Singapore, Manila, Moscow, Kaohsiung, Melbourne and Sydney. It plans to invest in 50 new narrow-body aircraft for delivery between 2030 and 2032, lease 20 additional narrow-body aircraft for 2027-2028, introduce its first dedicated cargo aircraft in the third quarter of 2026 and expand infrastructure at key airports including Long Thanh International Airport. For 2026, Vietnam Airlines targets carrying 27.73 million passengers and 361,400 tonnes of cargo, up 8.1% and 6.2% year on year respectively, while consolidated revenue is projected to reach VND 138.9 trillion, an increase of more than 12%. The airline’s chairman said the airline will continue organisational restructuring and strengthening its workforce to support anticipated double-digit growth.

SINGAPORE
13.4% of resident households earn at least SGD 30,000 per month in 2025, up from 7.4% in 2020
(30 June 2026) Singapore’s 2025 General Household Survey showed continued growth in household incomes, with 13.4% of resident households earning at least SGD 30,000 per month, up from 7.4% in 2020. More than half of resident households (51.6%) earned at least SGD 12,000 monthly, compared with 38.2% five years earlier. Median monthly household market income reached a record SGD 12,446 in 2025, exceeding SGD 12,000 for the first time and increasing at an average annual real rate of 3.2% from SGD 9,099 in 2020. The survey attributed the shift towards higher income brackets to rising median earnings, with real annual income growth of 3.5% for Indian households, 3.1% for Chinese households and 2.3% for Malay households. Median monthly household market income in 2025 was SGD 13,382 for Indian households, SGD 12,969 for Chinese households and SGD 8,581 for Malay households. Employment accounted for almost 80% of total household market income. The survey also showed that dual-income households became more common, with 56.6% of married couples both employed in 2025, up from 52.5% in 2020, while households with only the husband employed declined from 24.9% to 21.0%, and households with only the wife employed remained broadly unchanged at 7.5%.

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, RUSSIA
Russia uses ASEAN Russia Commemorative Summit to advance political, economic, and energy cooperation
(20 June 2026) Russia used the ASEAN Russia Commemorative Summit in Kazan to advance political, economic and energy cooperation with Southeast Asian countries, positioning itself as an alternative partner as the region seeks to diversify energy sources and reduce reliance on China and the United States. Russia signed a framework agreement with Lao PDR on the peaceful use of nuclear energy, including exploration of a Russian-designed nuclear power plant, while Malaysian Prime Minister Anwar Ibrahim said Malaysia had received assurances on petrol, oil and gas supplies and that preparations were under way for a long-term agreement. The director-general of Rosatom said Indonesia was showing strong interest in nuclear technologies, including floating nuclear power plants. Indonesia’s Foreign Minister called for expanded cooperation with Russia to strengthen regional resilience and maintain ASEAN’s ability to choose its own partnerships. Southeast Asia consumes approximately 7.5 million barrels of oil per day but produces only 4.7 million, with the International Energy Agency projecting the region’s energy import bill to reach USD 160 billion in 2026. Analysts said disruptions linked to the Strait of Hormuz closure had highlighted vulnerabilities in the region’s energy supply chain and created opportunities for Russia to expand its role in crude oil, liquefied natural gas and nuclear energy. An analyst at the ISEAS–Yusof Ishak Institute said oil and gas offered Russia the most immediate opportunities, while nuclear agreements could create long-term relationships through construction, fuel supply, maintenance, training and regulation.

ASEAN
Philippines and Thai companies experience largest earnings downgrades due to heavy dependence on Middle East oil imports
(19 June 2026) Philippine and Thai companies have experienced the largest earnings downgrades in Southeast Asia due to their heavy dependence on Middle Eastern oil imports, with over 90% of Philippine imports and around 60% of Thai imports sourced from the region. Bloomberg Intelligence said the impact is expected to become more visible in upcoming second-quarter results, particularly in consumer-related sectors facing higher fuel and input costs. Aviation is among the most exposed industries, with Thai Airways International and PAL Holdings more vulnerable to fuel price increases due to limited hedging. Around 80% of Philippine Stock Exchange Index constituents have seen second-quarter net income estimates cut since the Middle East conflict began, the highest proportion among major Southeast Asian markets. Eurobank research indicates that even if the Strait of Hormuz reopens, shipping volumes, oil flows and production may take time to normalise, keeping energy prices above pre-war levels through the second half of 2026. Investors are advised to monitor margin guidance, cost pass-through, consumer demand, foreign-exchange sensitivity, loan growth and asset quality, with consumer-facing sectors, transport, logistics and banks in Thailand and the Philippines remaining the most exposed if elevated oil prices persist into the third quarter.

ASEAN
Goldman Sachs warns that Southeast Asia could face food-supply shock due to higher oil and fertilizer prices
(22 June 2026) Goldman Sachs warned that Southeast Asia is likely to face a food-supply shock as higher oil and fertiliser prices linked to the Middle East conflict increase production and transportation costs, while a potential strong El Niño event in late 2026 could further disrupt food supplies. The bank said rising fuel-sensitive consumer prices and higher fertiliser costs would force governments to reassess trade-offs between food and fuel affordability. Singapore and the Philippines are identified as the most directly exposed to global food-price shocks due to their status as net food importers. Goldman noted that Malaysia and Indonesia also remain vulnerable, as both become net food importers when their palm oil sectors are excluded. Thailand faces additional risk because more than 90% of its fertiliser supply is imported, increasing exposure to higher global agricultural input costs. The report cited the risk that continued oil supply disruptions could raise fertiliser prices and affect availability, potentially disrupting planting and harvesting seasons in 2026 and 2027, reducing crop yields and increasing food prices. Goldman estimates that combined shocks from oil price volatility, fertiliser costs and El Niño could add an average of 1 percentage point to Southeast Asia’s food inflation after six months, rising to 2.1 percentage points after 12 months before moderating to 2 percentage points after 18 months. The bank emphasised that these figures represent additional inflationary pressure on top of normal food inflation trends rather than forecasts of overall food inflation.

CHINA, ASEAN
Chinese home appliance brands significantly expand market share in Southeast Asia over the past five years
(22 June 2026) Chinese home appliance brands have significantly expanded their market share across Southeast Asia over the past five years, driven by improved product quality, innovative features, enhanced after-sales service and competitive pricing rather than cost alone. In Southeast Asia, Chinese brands’ share of major appliances increased to 20.8% in 2025 from 17.0% in 2020, while their air-conditioner share rose to 26.6% from 16.1%, as Japanese brands’ share fell to 37.2% from 43.7%. Indonesia recorded one of the largest shifts, with Chinese air-conditioner market share rising to 34.5% from 15.7%, surpassing Japanese competitors. In Malaysia, Chinese television brands such as TCL and Hisense increased their market share to 36.1% in 2025 from 15.1% five years earlier. Gree strengthened its position through a 10-year compressor warranty, five-year repair and spare-parts coverage, and 24-hour customer support, exceeding warranty offerings from many Japanese and South Korean competitors. Indonesian retailers reported that Chinese appliances offer comparable features at prices 20% to 40% lower, while manufacturers have adapted products to tropical climates and smaller living spaces. Chinese companies are also increasing local production, with Midea operating a smart factory in Indonesia capable of producing more than 2 million refrigerators annually and expanding local procurement. In Thailand, Chinese brands’ share of refrigeration appliances rose to 44.7% in 2025 from 30.1% in 2020, supported by investments from Haier and Midea, which have established major manufacturing and regional operations in the country. C Chinese brands also expanded their dominance in robot vacuum cleaners, with regional market share rising to 58.2% from 36.2%, including growth in the Philippines to 81.0% from 28.6%, supported by partnerships with e-commerce platforms Shopee and Lazada. Roborock, Ecovacs and Xiaomi overtook iRobot in this category.

MALAYSIA, THAILAND
Malaysia and Thailand conduct intense negotiations over Malaysia’s suspension of imports of Thai shrimp
(20 June 2026) Malaysia and Thailand are conducting intensive negotiations over Malaysia’s temporary suspension of imports of five shrimp species, with Malaysia’s Agriculture and Food Security Minister stating that both sides are seeking a solution that protects their respective interests. Mohamad said the issue has received the attention of Prime Minister Datuk Seri Anwar Ibrahim and remains under negotiation, while Thailand is expected to provide clarification regarding fish and shrimp exports to Malaysia. Malaysia’s Agriculture and Food Security Ministry secretary-general confirmed that Malaysia has received Thailand’s response to a ministry questionnaire and is currently assessing, verifying and auditing the information to determine compliance with national biosecurity requirements. Malaysia had requested the response through its agricultural representative office in Bangkok following concerns over biosecurity compliance. On 16 May, Malaysia introduced stricter controls on fisheries imports from Thailand, including mandatory certificates of analysis for seabass and a temporary suspension, effective 01 June, covering Penaeus esculentes, Fenneropenaeus merguiensis, Penaeus vannamei, Penaeus monodon and Penaeus stylirostris. Thailand has reportedly indicated it may raise the matter at the World Trade Organisation and ASEAN forums if bilateral discussions do not produce a resolution.

MALAYSIA, BANGLADESH
Bangladesh and Malaysia agree to strengthen economic cooperation, trade and investment ties
(22 June 2026) Bangladeshi Prime Minister Tarique Rahman met Malaysian Prime Minister Datuk Seri Anwar Ibrahim in Kuala Lumpur during his first overseas visit since Bangladesh’s February election, with both leaders agreeing to strengthen economic cooperation, trade and investment ties. Discussions covered labour mobility, the halal industry, defence and security cooperation, and the energy sector, including potential Malaysian investment in oil and gas exploration in the Bay of Bengal. Bangladesh remains Malaysia’s second-largest trading partner in South Asia, importing approximately USD 2 billion of goods annually from Malaysia while exporting about USD 135 million. Bangladeshi workers account for 37% of Malaysia’s foreign workforce, with more than 800,000 holding Malaysian work permits. Rahman urged Malaysia to reopen its labour market to Bangladeshi workers, regularise undocumented workers where possible, and ensure recruitment processes are transparent, fair and affordable with reduced reliance on intermediaries. Anwar stated that exploitation and mistreatment of foreign workers could not be tolerated. Malaysia has restricted recruitment from Bangladesh since 2024 following allegations of debt bondage and forced labour. Bangladesh also reiterated its intention to obtain ASEAN Sectoral Dialogue Partner status, receiving a positive response from Malaysia. Malaysia further expressed support for Bangladesh’s aspiration to join the Regional Comprehensive Economic Partnership (RCEP).

INDONESIA
Indonesia to launch IDR 26.34 trillion stimulus package in second half of 2026
(22 June 2026) Indonesia will launch a 26.34 trillion rupiah (USD 1.48 billion) stimulus package in the second half of 2026 to support economic growth, according to the Coordinating Economic Ministry. The package supplements a previously announced IDR 7.8 trillion stimulus programme and is primarily focused on food assistance worth IDR 18.04 trillion. The government will distribute 10 kg rice packages to 33 million recipients beginning next month, with IDR 17.54 trillion allocated for the programme. Additional measures include discounts on air, rail and sea transportation, a paid internship programme, and government coverage of value-added tax on airfares, according to Indonesia’s Chief Economic Minister. The initiative follows IDR 15 trillion in spending on food aid and other fiscal stimulus measures during the first quarter of 2026. The government is targeting economic growth of at least 5.4% in 2026, compared with 5.11% growth recorded in the previous year.

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
Extreme El Niño weather patterns to impact rice and palm oil production in Southeast Asia
(15 June 2026) Southeast Asia is expected to face El Niño conditions before August, with the World Meteorological Organization forecasting the pattern to persist until at least November, increasing the risk of hotter and drier weather across the region. Experts warned that delayed or weaker monsoon rains could disrupt agricultural production, particularly for rice and palm oil, two commodities highly concentrated in Southeast Asia that are especially vulnerable to climate shocks. The ISEAS–Yusof Ishak Institute said rice output could decline by 2%–8% compared with a normal year, with Thailand, the Philippines, Indonesia and Cambodia most exposed. Palm oil supply, particularly in Indonesia and Malaysia (both of which account for about 85% of global palm oil supply), could also face reduced production, although impacts may emerge six to 12 months later through lower fruit bunch formation and oil extraction rates. Analysts noted that rising fertiliser and gas costs linked to the Iran war have already increased food prices, and that they could rise further due to El Niño-related supply concerns. The Global Heat Health Information Network warned that fears of shortages could drive food inflation, forcing central banks to maintain elevated interest rates despite higher borrowing costs for businesses and strained government budgets. Inflation remained elevated in May, reaching 6.8% in the Philippines and 5.6% in Vietnam, while Indonesia faced cost-of-living pressures following a 32% increase in some non-subsidised fuel prices. The Global Heat Health Information Network said the combination of climate-related disruptions and geopolitical pressures could intensify fiscal strain, increasing the risk of protests, labour strikes and political instability, particularly as several Southeast Asian countries are already experiencing public discontent over living costs and governance issues. Governments still have time to strengthen water management, food stockpiles, targeted subsidies and farmer guidance, but the window for effective intervention is narrowing.

INDONESIA
Possible downgrade by MSCI this month could trigger up to USD 13 billion in fund outflows
(15 June 2026) MSCI is due to decide this month whether to downgrade Indonesia from emerging-market to frontier-market status, a move that some analysts estimate could trigger up to USD 13 billion in fund outflows. The Jakarta Composite Index has fallen nearly 31% this year amid concerns over the potential reclassification and investor unease regarding economic management under President Prabowo Subianto. Recent selloffs in Indonesian assets have intensified concerns, with foreign stock outflows approaching USD 4 billion year-to-date. Investors broadly expect Indonesia to retain its emerging-market status, which would help restore confidence and support growth prospects. The chief investment officer at UOB Asset Management Indonesia said progress had been made in improving market transparency, although it remains unclear whether this will satisfy MSCI. The rupiah continues to face pressure from elevated oil prices and a widening budget deficit, while rising state intervention in commodity exports and a corruption probe involving the former head of the government’s free meals programme have further unsettled investors. MSCI could retain Indonesia’s status, keep the market under review, or downgrade it to frontier-market status alongside countries such as Viet Nam and Bangladesh. Vontobel Asset Management said a downgrade would be particularly damaging as capital is returning to emerging markets while allocations to frontier markets remain limited. A reclassification could also prompt similar actions by FTSE Russell and S&P Dow Jones Indices, potentially creating a prolonged process for Indonesia to regain emerging-market status. Despite current concerns, PT Kiwoom Sekuritas Indonesia said Indonesia’s long-term investment case remains supported by its large economy, natural resources and domestic market. Authorities have introduced measures to improve liquidity, transparency and foreign investor access, including naming nine companies with high shareholder concentration to strengthen market confidence.

SINGAPORE
Labour market weakens in first quarter of 2026, with job vacancies declining
(16 June 2026) Singapore’s labour market softened in the first quarter of 2026, with job vacancies declining to 73,300 from 77,700 in December 2025 and 80,100 a year earlier, according to the Ministry of Manpower’s (MOM) Labour Market Report. The vacancy-to-unemployed-person ratio fell to 1.46 from 1.58 in the previous quarter, driven mainly by fewer openings for non-PMET roles, although PMET vacancies increased, including in financial services where openings rose from 4,300 to 5,800. Retrenchments increased to 3,830 from 3,690 in the fourth quarter of 2025, the highest quarterly level since the third quarter of 2023 and the highest first-quarter figure since 2017. Degree holders experienced a rise in retrenchments from 2.6 to 3.1 per 1,000 resident employees, reflecting restructuring in manufacturing, financial services and professional services. MOM said business reorganisation and restructuring, rather than cost-cutting, remained the primary reason for layoffs. The proportion of retrenched residents securing employment within six months improved to 60.7% from 57.4%, with gains among PMETs, degree holders and workers under 30. The number of employees placed on short work weeks or temporary layoffs increased to 1,230 from 960, particularly in construction, manufacturing and lower-skilled occupations. Despite these pressures, total employment grew by 9,400, extending a streak of 18 consecutive quarters of expansion, while resident employment rose by 5,400 jobs. The resident long-term unemployment rate remained unchanged at 0.9%. MOM expects retrenchments to stabilise, with the share of firms planning layoffs falling from 4.4% in February to 3.6% in March.

INDONESIA
Weakening rupiah sparks shrinkflation and consumer downgrading in Indonesia
(11 June 2026) Signs of economic strain are becoming more visible in Indonesia as street food vendors reduce portion sizes rather than raise prices, reflecting rising ingredient costs and weakening consumer purchasing power. The trend of shrinkflation and consumer downgrading has intensified as the rupiah fell past IDR 18,000 per US dollar last week and inflation continued to rise despite extensive fuel subsidies. While officials highlighted first-quarter annual economic growth of 5.61% and May inflation of 3.08%, concerns have grown over the rupiah’s status as Asia’s worst-performing currency this year and the Jakarta Composite Index’s position as the world’s weakest-performing major equity benchmark. Indonesia’s Finance Minister maintained that economic fundamentals remain strong, citing growth in car, motorcycle, electricity and cement sales. Retail car sales rose 8.8% in the first five months of 2026, while motorcycle sales increased 0.7%. Bank Indonesia has raised its policy rate by 75 basis points to 5.5% since 20 May, including a 25-basis-point increase at an emergency meeting, to support the currency. Banking sector stress indicators worsened, with gross non-performing loans rising to 2.17% in April from 2.05% in December and the 90-day delinquency rate at online lenders increasing to 4.62% from 4.32%. Indonesia also recorded its smallest trade surplus in more than six years in April as import values rose due to the weaker rupiah. An economist at the University of Indonesia warned that the government’s response risks creating a credibility problem and said the weakening currency should have prompted a greater sense of urgency. BMI attributed pressure on the rupiah partly to domestic factors, including commodity export policies, amendments expanding Bank Indonesia’s mandate, continued fuel subsidies and governance concerns linked to corruption cases. BMI warned that fuel subsidies could push the fiscal deficit above the legal ceiling of 3% of GDP and said investor concerns over governance and fiscal discipline remain unresolved.

MALAYSIA, THAILAND
Thai seafood traders face growing uncertainty following Malaysian ban on shrimp and seabass exports
(16 June 2026) Thailand’s shrimp exporters and farmers are facing growing uncertainty after Malaysia’s temporary ban, effective from 01 June, on imports of five Thai shrimp and prawn varieties led Malaysian customers to postpone or suspend orders, increasing storage costs and forcing exporters to seek alternative markets with different regulatory and product requirements. The dispute followed Thailand’s tighter inspections and import restrictions on Malaysian sea bass over chemical residue concerns, prompting Malaysia to impose reciprocal biosecurity measures and require an additional Certificate of Analysis for Thai sea bass. Malaysia imports approximately 6,000–8,000 tonnes of Thai shrimp annually, representing about 5% of Thailand’s total shrimp exports, and prolonged restrictions could lead to domestic oversupply, lower farm-gate prices and loss of export market share, although the Thai Shrimp Association expects any immediate price decline to remain limited while exporters redirect shipments. Thailand’s Agriculture and Cooperatives Minister proposed policy-level talks with Malaysia on 17 June, although discussions remain at the working level. Thailand has shortened its review of Malaysian sea bass inspection procedures, aiming to reduce testing times from around 15 days to about seven days while maintaining food safety standards, and pledged to monitor shrimp prices and support affected farmers. Thailand’s Department of Fisheries is preparing measures to strengthen the shrimp industry, such as reducing production costs, promoting technology and clean energy adoption, and encouraging domestic shrimp consumption. Malaysia’s Fisheries Department stated it is still awaiting Thailand’s response to its shrimp safety concerns before assessing compliance with Malaysian biosecurity requirements. Industry representatives and analysts called for the dispute to be resolved through scientific evidence, mutually recognised standards and closer bilateral cooperation, while urging Southeast Asian governments to strengthen regional food supply resilience instead of relying on protectionist measures.

VIET NAM
Viet Nam to maintain 10% economic growth for 2026 despite widening trade deficit and inflationary pressures
(17 June 2026) Viet Nam will maintain its 10% economic growth target for 2026 despite a widening trade deficit and inflationary pressures. The country’s trade deficit is estimated to have reached USD 15 billion in the first half of the year, compared with a trade surplus of USD 7.6 billion in the same period of 2025, primarily due to higher fuel import costs resulting from the war in the Middle East. Authorities said export growth is expected to accelerate during the second half of the year, narrowing the full-year trade deficit. Vietnam recorded a trade deficit of USD 13.8 billion in the first five months of 2026, compared with a surplus of USD 5.1 billion a year earlier. Higher fuel costs have also pushed annual inflation to 5.6% in May, exceeding the government’s full-year target of 4.5%. Viet Nam is also facing external trade pressure after the Trump administration alleged that the country distorts trade through excess capacity, intellectual property violations and the use of goods made with forced labour. Earlier this month, the United States proposed tariffs of up to 12.5% on imports from 60 countries, including Viet Nam, after determining they had failed to curb trade in goods produced with forced labour. Viet Nam said the US assessment did not fully or accurately reflect its mitigation efforts.

TIMOR-LESTE, MALAYSIA
Malaysia and Timor-Leste explore strategic cooperation across multiple sectors
(16 June 2026) Malaysia and Timor-Leste discussed expanding bilateral cooperation in strategic sectors during Timor-Leste President Jose Ramos-Horta’s special visit to Malaysia, including economic development, trade, investment, human capital development, education and Technical and Vocational Education and Training (TVET). Prime Minister Datuk Seri Anwar Ibrahim said both sides also explored new opportunities to support sustainable economic growth and create broader prospects for younger generations in both countries. The leaders reaffirmed their commitment to strengthening bilateral relations through strategic cooperation for mutual benefit. Anwar also emphasised the importance of enhancing regional ties based on solidarity, mutual respect and shared responsibility to promote peace, stability and prosperity within ASEAN. Ramos-Horta arrived in Malaysia on 13 June for a five-day special visit. Bilateral trade between Malaysia and Timor-Leste totalled USD 18.72 million in 2024, comprising Malaysian exports of USD 18.37 million and imports of USD 0.35 million.

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.