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

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

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

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

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

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

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

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