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.