VIET NAM, SOUTH KOREA
South Korean firms based in Viet Nam face competition from China
(04 April 2024) South Korean companies have historically dominated foreign direct investment in Viet Nam, but they are facing increasing competition from Chinese counterparts. Despite South Korea ranking first in cumulative investment in Viet Nam since 1988, recent years have seen stiff competition from China. In 2023, South Korea ranked fourth in foreign direct investment in Viet Nam, behind Hong Kong, China, and Singapore. Factors such as rising labour costs and increased presence of Chinese companies have made Korean firms cautious about new investments in Viet Nam. Additionally, Viet Nam’s implementation of a global minimum corporate tax of 15% may impact its attractiveness as an investment destination, with South Korean companies expected to bear a significant portion of the tax burden. Despite challenges, Viet Nam’s open trade and investment environment, along with diplomatic relations with the United States and the influx of investment from multinational companies leaving China, are expected to contribute to the country’s economic growth.

INDONESIA, MALAYSIA, BRUNEI DARUSSALAM
Bruneian company pitches first high-speed railway on the island of Borneo
(01 April 2024) Brunergy Utama, a Brunei-based infrastructure company, has proposed the Trans-Borneo Railway, a high-speed railway spanning 1,620 kilometers across the island of Borneo. The railway would connect Brunei Darussalam, Indonesia, and Malaysia. The project aims to connect major cities and districts in Borneo, including Pontianak, Kuching, Kota Kinabalu, and Tutong, with plans to extend to Indonesia’s new capital of Nusantara on the western side of the island. The railway is designed to have four terminals, 24 stations, and trains reaching speeds of up to 350 kilometers per hour, with an estimated cost of US$70 billion. The project’s outlook is currently unclear, as neither Malaysia, Indonesia, or Brunei Darussalam have committed to the project.

THE PHILIPPINES, UNITED STATES, JAPAN
The Philippines, United States, and Japan to collaborate on semiconductors and clean energy
(04 April 2024) Japanese Prime Minister Fumio Kishida stated in an interview that Japan, the U.S., and the Philippines plan to collaborate in various sectors such as semiconductors, digitalization, and clean energy. This is with the larger aim of providing an alternative to China’s influence in Southeast Asia. The leaders will hold a trilateral summit in Washington to discuss regional challenges. They will explore economic and security cooperation, including the development of semiconductor facilities by U.S. companies in the Philippines (with Japan providing training for Filipino engineers), the setting up of 5G networks in the Philippines, cybersecurity, and development of supply chains for critical minerals such as nickel.

THAILAND
Thailand’s post-pandemic recovery sluggish compared to neighbors
(01 April 2024) Thailand is facing economic challenges, with household debt reaching nearly 87% of GDP and informal loans amounting to US$1.5 billion. The economy is exhibiting signs of the middle-income trap, characterized by low productivity and limited opportunities for the workforce. Despite other Southeast Asian countries’ strong recovery from the COVID-19 pandemic, Thailand’s economy grew by only 1.9% in 2023. Thai Prime Minister Srettha Thavisin has proposed measures such as cash handouts and legalizing casinos to stimulate economic growth, but these policies have faced criticism. The Bank of Thailand has refused to lower interest rates, pointing instead to the country’s loss of competitive edge due to factors like China’s slowdown and inadequate investments in digital literacy and training.

SINGAPORE
Singapore government bonds worst performing in Southeast Asia in 2024
(04 April 2024) Overseas investors in Singapore government bonds are facing challenges as the debt has performed poorly in 2024, with a loss of over 4% in dollar terms. The upcoming policy review by the Monetary Authority of Singapore (MAS) is unlikely to provide relief due to persistent inflation and robust economic data. The strong link between Singapore bonds and the US market means that any moves in Treasury yields often influence local yields. Despite expectations of easing by central banks, including the Federal Reserve, the timing of rate cuts has been delayed as the US economy remains resilient. Singapore bonds are expected to be less affected by rate cuts compared to regional peers due to the relatively lower increase in Singapore dollar (SGD) rates compared to US dollar (USD) rates. MAS policy is not anticipated to change until October 2024 unless there are significant declines in Singapore inflation. The impact of US events on Singapore bonds is considered more significant than domestic factors, with a stronger USD potentially leading to upward pressure on yields.

SINGAPORE
Total startup investment in Singapore reached US$6.1 billion in 2023
(04 April 2024) In 2023, Singapore emerged as the top startup investment destination in Southeast Asia, attracting a total investment of US$6.1 billion across 522 deals, according to a report by government agency Enterprise Singapore. Early-stage funding accounted for 94% of the deal volume and nearly half of the total deal value, marking an increase from the previous year. This contrasts with a 40% year-on-year drop in global early-stage funding for startups in 2023. The report suggests that startups in Singapore demonstrated resilience in securing funding compared to their counterparts. The director for the startup ecosystem at Enterprise Singapore argued that these funding results reflect investors’ confidence in Singapore as a prime destination for startup development in the region.

CAMBODIA
Cambodia approves investment projects worth US$2.2 billion in first quarter of 2024
(05 April 2024) In the first quarter of 2024, Cambodia experienced a significant surge in fixed-asset investment, reaching US$2.2 billion. This marked a 649% increase compared to the same period in 2023. This increase was accompanied by the approval of 106 investment projects during this period, generating approximately 107,000 jobs. The investments primarily targeted industries, infrastructure, hydroelectric power, agriculture, agro-industry, and tourism. China, Singapore, Vietnam, South Korea, and the United States emerged as the top five foreign investors in Cambodia, with China accounting for 35% of the total investment at US$777 million. The Secretary of State and Spokesperson for the Cambodian Ministry of Commerce highlighted the role of agreements such as the Regional Comprehensive Economic Partnership (RCEP) and the Cambodia-China Free Trade Agreement (CCFTA) in attracting foreign direct investment to Cambodia.

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SOUTH KOREA
Korean companies may boost share sales as authorities look to enhance corporate governance
(04 April 2024) Goldman Sachs Group Inc. predicts that South Korean companies may increase share sales as authorities aim to enhance corporate governance and lift a short-selling ban. The investment bank suggested that a plan to encourage firms to enhance valuations through better management practices could lead to more share sales, particularly from low-value traditional businesses. The proposed “Corporate Value-up Program,” aimed at improving profit, unwinding cross-holdings, and boosting shareholder returns, is expected to be finalised in May 2024. South Korea’s equity capital market (ECM) activity has seen a significant increase, accounting for 3% of global deals in the first quarter of 2024, up from 1% in the same period in 2023, with block sales and share placements reaching a record US$4.1 billion between January and March. Investors are also anticipating the potential end of the short-selling ban in June 2204, which  could pave the way for derivative-based equity products like convertible or exchangeable bonds.

JAPAN
Japan’s Nikkei average jumps 2% due to heightened domestic investor interest
(04 April 2024) The Nikkei Stock Average surged on 04 April, closing at 39,773.14, up 321.29 points or 0.81% from the previous day. Semiconductor-related stocks, buoyed by a rebound in U.S. tech stocks, led the rise, with Tokyo Electron hitting an all-time high. Investor sentiment was bolstered by Japanese companies’ improved asset efficiency, with trading house Itochu and cosmetics company Kao experiencing significant gains. The extended uptrend is also attributed to increased purchases of Japanese stocks through the revamped Nippon Individual Savings Account (NISA) program, which is designed to encourage people to move some of their savings into the stock market. According to a survey on NISA account openings at 10 securities companies, average monthly purchases in January and February tripled compared to the same period last year, reaching 1.77 trillion yen (US$11.67 billion).

AUSTRALIA
Government seeks to revitalize Australian manufacturing through US$9.7 billion fund
(04 April 2024) The Australian government is making efforts to revitalise its manufacturing sector through a US$9.7 billion National Reconstruction Fund fund aimed at commercializing local innovation. This initiative comes amidst concerns over the country’s economic resilience, particularly highlighted by recent trade tensions with China and vulnerabilities exposed by the Covid-19 pandemic. The decline of traditional manufacturing industries since the 1970s has left Australia heavily reliant on raw material exports, prompting calls to move up the value chain. However, Australia lags behind in research and development spending, with only 1.68% of GDP allocated to R&D, well below the OECD average. The National Reconstruction Fund aims to address these challenges by investing in maturing companies across various sectors, including renewable energy, medicine, defence, agriculture, and mining. While the vision to rebuild Australia’s manufacturing prowess is realistic, there are concerns about the country’s ability to compete with global players like China.

ASEAN
Green transition in ASEAN countries face hurdles due to greenflation concerns
(25 March 2024) Several ASEAN countries are facing hurdles in their renewable energy transitions, largely due to concerns over ‘greenflation’. Greenflation occurs when fossil fuels are discarded in favour of more expensive low-carbon technologies. For instance, Indonesia recently trimmed its future targets for renewable portions in the country’s primary energy mix. The cuts in the country’s renewables targets were attributed to concerns over burdening the poor with expensive R&D and energy transition costs. In neighboring Malaysia, government officials have warned that a weaker ringgit will make it more expensive to import technologies, equipment, and expertise needed for large-scale decarbonization projects. In Viet Nam, meanwhile, coal imports soared 217% year-on-year in January 2024 year on year, despite Vietnam being Southeast Asia’s leader in terms of solar and wind power capacity.

ASEAN
HSBC sets up US$1 billion growth fund to scale up ASEAN digital platform businesses
(27 March 2024) HSBC announced the establishment of the ASEAN Growth Fund, a US$1 billion lending initiative aimed at supporting companies scaling up through digital platforms across Southeast Asia. The London-based bank aims to capitalize on the region’s rapidly expanding digital economy, projected to reach a value of US$600 billion by the end of the decade, up from US$218 billion in 2023. Amanda Murphy, HSBC’s head of commercial banking for South and Southeast Asia, highlighted the region’s digitally native and expanding workforce as a key driver of growth, particularly in e-commerce. Alongside the ASEAN Growth Fund, HSBC introduced a US$150 million venture debt fund specifically tailored for the Singaporean market. This fund aims to provide financial support to companies in Singapore backed by venture capital or private equity firms.

THAILAND
Weak demand and oversupply may prompt price war in Thai auto market
(27 March 2024) Car sales in Thailand dropped by 26.15% in the first two months of 2024, attributed to factors such as high consumer debt and tighter financing conditions. Hybrid and electric car sales increased, but failed to offset the decline in internal combustion vehicle sales. 2023’s surge in repossessed cars and subsequent fall in resale prices exacerbated the situation, causing potential buyers to delay purchases. Import of electric vehicles further impacted domestic production, though the Federation of Thai Industries downplayed concerns, citing the need for industry development. A ‘vicious cycle’ of weak demand and oversupply have prompted carmakers to offer significant discounts. A price war is anticipated, with luxury brands also lowering prices. EV sales in Thailand are projected to reach 100,000 units in 2024.

THAILAND
Thailand could boost tourism revenue by US$12 billion by legalizing casinos
(26 March 2024) A study suggests that legalizing casinos within large entertainment complexes in Thailand could increase tourism revenue by approximately US$12 billion. Tourist spending is estimated to rise by 52%, reaching THB 65,050 baht (USD$1,790) per trip, potentially adding up to THB 448.8 billion baht in additional earnings. The proposed entertainment complexes would not only feature casinos but also luxury hotels, restaurants, and other attractions. Thailand aims to double foreign tourist arrivals to 80 million by 2027, with tourism already contributing 12% to the nation’s economy. The global fun economy industry, including integrated entertainment venues, is rapidly expanding, presenting significant revenue opportunities for Thailand.

THAILAND, MALAYSIA
Malaysia considering extending its US$10.6 billion East Coast Railway Link project to Thailand
(27 March 2024) Malaysia is considering extending its US$10.6 billion East Coast Railway Link (ECRL) closer to the Thai border to enhance cross-border connectivity and mitigate economic competition with Thailand. Malaysia’s Transport Minister stated that both countries face shared challenges and could benefit from collaboration in areas like transportation infrastructure. The ECRL project, scheduled for completion by 2027, currently terminates at Kota Bharu, around 40 kilometers from the Thai border. Thailand’s proposed US$29 billion Chumphon-Ranong Land Bridge project aims to construct two new ports, potentially creating an alternative trade route to the Malacca Strait. Loke highlighted that the impact of the land bridge on Malaysia’s major ports is expected to be limited. He noted that the implementation of the land bridge project could take up to 15 years, if initiated.

SINGAPORE
Office rents reach 15-year high in first quarter of 2024
(27 March 2024) In the first quarter of 2024, office rents in Singapore reached a 15-year peak, with gross effective monthly rents for premium office space in the Central Business District rising to SG$11.42 (US$8.47) per sq ft, the highest since late 2008. This bucks the trend of commercial property downturns observed in other global financial centres. The resilience of Singapore’s commercial real estate market can be attributed to a resurgence in office occupancy rates and a surge in private wealth. Vacancies for prime office space dipped to 5.3% in the first quarter, a post-pandemic low, compared to 5.5% in the previous quarter. However, significant demand from large occupiers remains subdued. Real estate consultancy firm JLL forecasts a shortfall in securing tenants for over 1.5 million sq ft of office space scheduled for completion between 2024 and 2025.

VIET NAM, INDONESIA, TAIWAN
Taiwan bets on Southeast Asian countries to address semiconductor sector talent shortage
(26 March 2024) Taiwan is addressing its potential talent shortage in the semiconductor industry by turning to Southeast Asian students, notably from Viet Nam, as a source of workers. Minghsin University of Science and Technology (MUST) in Taiwan, for example, provides training in semiconductor manufacturing, with internships offered at leading chip companies. Approximately 700 of the university’s 2,300 students are from Viet Nam. Taiwan’s declining birthrate, stagnant wages, and rising property prices have exacerbated concerns, with annual births falling to a record low of around 135,000 in 2023. To address this, Taiwan plans to spend US$163 million by 2028 to attract 320,000 foreign students, focusing on science, technology, engineering, and math (STEM) fields. Additionally, a new framework encourages foreign students to work in Taiwan after graduation, aiming for a 70% retention rate. Southeast Asian students are a key focus of recruitment efforts, with programmes established in Vietnam, Indonesia, the Philippines, and other countries in the region.

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JAPAN
Bank of Japan steps up intervention warning amidst declining yen
(27 March 2024) The Japanese yen experienced a significant decline against the US dollar on 28 March, 2024, nearing its lowest level in 34 years, prompting concerns of potential intervention by Japanese authorities. Japan’s Finance Minister indicated a readiness to take action against excessive movements in the yen. Despite these warnings, the currency dropped to ¥151.94 against the dollar during morning trading, defying efforts by the Japanese government to stem its decline. The Bank of Japan’s recent shift away from ultra-loose monetary policy, including its first interest rate hike since 2007, failed to exert upward pressure on the yen. Dovish comments by the bank’s governor further weakened the exchange rate, with investors maintaining bets on a significant interest rate differential between Japan and the US. Japanese officials have identified ¥152 against the dollar as a potential trigger for direct intervention, echoing similar actions taken in 2022. Finance officials attributed the recent yen weakening to speculative activities.

SOUTH KOREA
South Korea announces financial aid for small businesses and construction companies
(27 March 2024) South Korea has announced financial aid measures for small businesses and construction companies impacted by high-interest rates. The government, in collaboration with commercial banks, aims to provide KRW 40.6 trillion (US$30.3 billion) in financial support through loan guarantees and reduced interest rates starting in April 2024. Additionally, there are plans to expand schemes returning interest income to small businesses and self-employed individuals with loans. For struggling builders facing high raw material costs and interest rates, liquidity support will be offered through increased guarantees and additional loans to finance profitable real estate projects. The Financial Services Commission (FSC) also intends to expedite assistance through its market stabilising fund.

AUSTRALIA
Consumer price index rises by 3.4% in February 2024, in line with economists’ expectations
(27 March 2024) Inflation in Australia remained steady for the second consecutive month, with the consumer price index rising by 3.4% in the year to February 2024, in line with economists’ predictions. Excluding volatile items, inflation decreased from 4.1% in January 2024 to 3.9% in February 2024. The moderation was attributed to declines in meat and seafood prices, which dropped by 2% due to livestock sell-offs, and a 0.5% decrease in fruit and vegetable prices. Insurance prices saw a significant increase of 16.5% annually, the highest since the calculation of the CPI began in 2022. Rent prices continued to rise, albeit slightly, reaching 7.6% annually, although government measures restrained the increase. Energy prices also eased, with electricity prices growing only 0.3% in February. However, the underlying annual inflation measure rose from 3.8% in January to 3.9% in February, indicating ongoing economic challenges. The RBA is set to make its next decision on interest rates on 07 May, 2024, following the release of March quarter inflation data.

ASEAN
ASEAN startup sector facing declining funding, prompting calls for restructuring and consolidation
(20 March 2024) ASEAN’s startup sector is facing a so-called ‘funding winter’, with startup investment in the region in the first quarter of 2024 dropping to around US$800 million as of 18 March, 2024, around the 2017 level. Although rising US interest rates have been blamed for a global downturn in tech startups, Southeast Asia’s startup scene is notably linked to the fortunes of one firm in particular — Japanese tech conglomerate SoftBank Group — which helped grow many of the region’s top tech companies, such as Grab and Tokopedia, the e-commerce unit of ride-hailing service GoTo, almost from scratch. After SoftBank Groups’ venture capital ambitions were crippled following the collapse of its Vision Fund in 2022, many of the region’s tech startups now face an uncertain future. Facing limited funding moving forward, the region’s startups may have to go through shutdowns, mergers and downrounds. This will impact Southeast Asian consumers, who have become heavily dependent on digital services for everyday life.

MALAYSIA
Malaysia to see faster economic growth of 4% to 5% in 2024
(20 March 2024) Malaysia’s central bank forecasts a faster economic growth rate of 4% to 5% in 2024, driven by increased investment and external demand, following 3.7% growth in 2023. Bank Negara Malaysia anticipates a global economic rebound this year, underpinned by technological advancements and a resurgence in tourism. Despite subdued global demand, Malaysia saw an improvement in labour market conditions and heightened investment activity, particularly in the IT and electronics sectors. Tourism Malaysia aims to surpass pre-COVID 19 tourist arrival levels, targeting 27.3 million visitors in 2024. The services and manufacturing sectors are expected to lead growth, while the agriculture industry may contract due to adverse weather conditions. Inflation is projected to remain moderate, averaging between 2.0% and 3.5% in 2024, following a downward trend observed in 2023.

MALAYSIA, SINGAPORE
Malaysians working in Singapore gain spending power due to slumping ringgit
(21 March 2024) A declining Malaysian ringgit has increased the purchasing power of Malaysians working in Singapore. The Malaysian ringgit has weakened against the US dollar, while the Singapore dollar remains robust and stable. Statistics from Singapore’s Monetary Authority show that one Singapore dollar now equals about MYR 3.5, up from MYR 3 five years ago, benefiting Malaysian expatriates who earn higher incomes in Singapore. The allure of better job prospects, higher salaries, and a strong Singapore dollar motivates many Malaysians to seek employment in Singapore, as evidenced by increased job applications from Malaysia to Singapore. However, Malaysia faces a talent drain as many skilled individuals migrate to Singapore, prompting calls for Malaysia to create more appealing job opportunities to retain local talent.

MYANMAR
Peninsula Hotels group says US$130 million project in Yangon currently stalled
(19 March 2024) Hongkong and Shanghai Hotels, the operator of Peninsula Hotels chain, expressed uncertainty about resuming its US$130-million project in Yangon, stalled since Myanmar’s military coup three years ago. CEO Clement Kwok stated that while basic groundwork might proceed, there’s no clear timeline for the project’s completion. The joint venture with Myanmar tycoon Serge Pun’s Yoma Group aims to redevelop the Myanmar Railway headquarters into an 88-room hotel. Construction halted post-coup, leading to a significant impairment charge for the company. Despite challenges, Hongkong and Shanghai Hotels remain committed to the project and have agreed with local partners to complete the building’s roof.

THE PHILIPPINES
Casino sector expected to see as much as US$6 billion in investments over next five years
(19 March 2024) The chairman of the Philippine Amusement and Gaming Corp, Alejandro Tengco, stated that both foreign and domestic firms are projected to invest up to US$6 billion in the Philippines’ casino sector over the next five years, strengthening its position as one of Asia’s leading gambling destinations. Tengco anticipates the opening of at least one new casino-resort every other year, expanding beyond Manila to areas like Clark and Cebu. The country aims to achieve a total gross gaming revenue (GGR) of US$8 to US$9 billion by 2027, a year earlier than previously expected. In 2023, the Philippines recorded a record total GGR of US$5.07 billion. Despite challenges, such as the absence of mainland Chinese high-rollers due to the pandemic and regulatory changes, casino resort operators like Bloomberry Resorts and Japan’s Universal Entertainment have performed strongly. The Philippines faces upcoming competition from Japan and Thailand, but Tengco believes there’s a window of opportunity to solidify its position in the gaming industry over the next five to six years.

INDONESIA
Prabowo Subianto officially wins Indonesia’s February 2024 presidential elections
(21 March 2024) Prabowo Subianto has been elected as Indonesia’s next president, succeeding Joko “Jokowi” Widodo. Official results from the presidential election show Prabowo secured 96.2 million votes, or 58.59% of the total valid votes, beating two other candidates, Anies Baswedan and Ganjar Pranowo. The voter turnout was 80.18%, slightly down from the 2019 election. Prabowo won in 36 provinces, clearing the necessary electoral hurdles. He will be sworn in on 20 October, 2024 for a five-year term. However, only four out of nine political parties supporting Prabowo passed the parliamentary threshold in the national legislative election held on the same day as the presidential election, meaning Prabowo will need to gain additional coalition partners to gain a majority in the lower house. Prabowo has stated his intent to continue major policies, including shifting the country’s capital to Nusantara and developing a domestic mineral processing industry.

VIET NAM
Vietnamese fruit and vegetable exports to reach US$1.25 billion in first quarter of 2024
(21 March 2024) Viet Nam’s fruit and vegetable export value is projected to reach approximately US$1.25 billion in the first quarter of 2024, marking a 27% increase compared to the same period in 2023, as reported by the Vietnam Fruit and Vegetable Association. Preliminary data from the General Department of Customs indicates that March’s fruit and vegetable exports are estimated at US$433 million, showing a nearly 4% growth year-on-year. This marks the first time Viet Nam’s fruit and vegetable exports have surpassed US$1 billion in the first quarter of the year, demonstrating promising prospects for future industry growth. Major export markets include China, South Korea, the US, Thailand, and Japan. In contrast, Viet Nam’s imports of fruits and vegetables in the first three months of 2024 are estimated to total nearly US$500 million, representing a more than 19% increase year-on-year.

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CHINA
Hong Kong Monetary Authority maintains base rate unchanged, mirroring US Federal Reserve
(21 March 2024) The Hong Kong Monetary Authority (HKMA) opted to maintain its base rate charged through the overnight discount window at 5.75% on 21 March, 2024, aligning with the decision of the US Federal Reserve to keep rates steady. This decision follows Fed Chair Jerome Powell’s remarks on 20 March reaffirming the bank’s commitment to gradual rate cuts amidst ongoing inflation concerns, projecting three interest rate reductions in 2024. HKMA anticipates potential rate cuts totalling 75 basis points by the Fed in 2024, though the timing and subsequent rate trajectory remain uncertain, suggesting a sustained period of high interest rates. Despite this, HKMA assured that Hong Kong’s financial and monetary markets continue to function smoothly and that the exchange rate of the Hong Kong dollar remains stable. However, the public is advised to assess associated risks carefully when making financial decisions such as property purchases or borrowing. Hong Kong’s monetary policy closely mirrors that of the United States due to its currency peg to the US dollar within a narrow band of 7.75-7.85 per dollar.

AUSTRALIA
Unemployment rate unexpectedly drops to 3.7% in February 2024
(21 March 2024) Australia’s jobless rate plummeted to 3.7% in February 2024, a significant drop from January’s 4.1%, surpassing economists’ expectations of 4.0%, as revealed by the Australian Bureau of Statistics (ABS) on 21 March, 2024. The economy added 116,600 jobs, predominantly full-time positions, in February, more than triple the anticipated figure of 40,000 positions. The ABS attributed the unexpected surge in employment to changes in how people enter the job market. The participation rate increased to 66.7%, and hours worked rose by 2.8%, reversing a decline in January 2024. The strong job market performance contrasts with Australia’s sluggish economic growth in the final quarter of 2023, driven by numerous interest rate hikes. The Reserve Bank of Australia (RBA) forecasted a slight increase in the unemployment rate to 4.2% by June and 4.3% by the end of 2024. The RBA governor hinted that rapid unemployment growth could prompt interest rate cuts, though the bank left rates unchanged. Regional variations were observed, with South Australia and New South Wales experiencing significant declines in unemployment rates, while Victoria and Tasmania remained stable. The Northern Territory recorded a rise in unemployment, contrasting with the Australian Capital Territory’s slight decrease. The surge in jobs coincided with a substantial net migrant influx, raising concerns among welfare groups about potential delays in interest rate cuts.

SOUTH KOREA
South Korea seeks multinational framework for semiconductor export controls
(22 March 2024) South Korea is considering utilising a multinational framework to review export controls for sensitive products such as semiconductor-related equipment. This approach could complicate US efforts to limit China’s access to advanced chip-making gear. Despite being a key US ally, South Korea faces pressure due to its significant trade ties with China. South Korea highlighted that any export controls would take months to implement and may not necessarily result in a ban. Seoul stressed that South Korea isn’t singling out China and aims to minimize impacts on domestic industries while fulfilling international obligations. Opting for a multilateral approach indicates caution among Korean policymakers regarding unilateral curbs. Following discussions in Washington with senior US officials, including Trade Representative Katherine Tai, South Korea’s Trade Minister highlighted South Korean investment and manufacturing growth in the US, potentially narrowing the gap between the US and China as destinations for South Korean exports.

SINGAPORE
Taylor Swift’s Eras tour causes economists to upgrade Singapore’s GDP forecast
(08 March 2024) The Singapore leg of singer-songwriter Taylor Swift’s Eras tour caused economists to upgrade the country’s GDP forecast for 2024. Economists now predict Singapore’s economy will expand by 2.9% in the first quarter of 2024, and 2.5% for the whole year (from a previous forecast of 2.3%). It is believed her concerts added 0.2% percentage points of GDP to the city-state’s economy in the first quarter. The Singapore leg of the Eras tour involved the singer performing six concerts through 09 March, carrying benefits for Singapore’s hospitality, food & beverage, and retail activities.

THE PHILIPPINES, UNITED STATES
Potential free trade agreement between the Philippines and United States soon
(12 March 2024) A potential free trade agreement (FTA) between the Philippines and the United States will be discussed once a visiting delegation of American business leaders, organized by US President Joe Biden, returns to the US. The Chairman of the President’s Export Council (PEC), mentioned the possibility of a US-Philippines FTA during a forum in Makati City. The PEC advises the US president on trade-related government policies and programs. The Chairman stated that discussions on the FTA would occur upon their return to the US, but warned that FTA negotiations involve multiple branches of the US government, including Congress. Currently, the US ranks as the Philippines’ third-largest trading partner globally, with total trade reaching approximately US$20 billion. The United States presently has 14 FTAs with 20 countries, according to the ITA.

VIET NAM
Viet Nam expected to be upgraded to emerging market indexes by 2025
(09 March 2024) Viet Nam is striving for inclusion in emerging market indexes, with the demand for upfront funding from equity investors posing a significant obstacle. JPMorgan Chase & Co. and HSBC Holdings Plc anticipate an upgrade for Viet Nam’s US$269 billion stock market by FTSE Russell later in 2024, with a target inclusion by 2025. Despite being a strong candidate on paper due to its robust economy and stock market performance, foreign investors are concerned about the requirement for investors to have fully-funded accounts in the country before trading can commence. Vietnam’s progress towards an upgrade has been slower than anticipated, partly due to issues with fund availability checks and cumbersome account opening processes. Another challenge is the cap on foreign holdings in certain sectors, hindering international investment. However, Vietnam aims to address these concerns and increase its stock market capitalization to 100% and 120% of GDP by 2025 and 2030, respectively.

MALAYSIA
Semiconductor manufacturers shifting operations to Malaysia amidst US-China chip war
(11 March 2024) Semiconductor manufacturing firms are increasingly investing in Malaysia amidst the ongoing Sino-US trade war. Much of this influx is driven by a global strategy adopted by semiconductor firms termed “China plus one,” which aims to diversify supply chains away from China. Malaysia’s appeal lies in its established history of semiconductor manufacturing (primarily back-end operations), bolstered by the current government’s ambition to move up the value chain. Malaysia attracted RM60.1 billion in foreign direct investment in 2023, demonstrating its growing attractiveness to investors. However, challenges such as a shortage of engineering talent and political vulnerabilities remain. The influx of Chinese companies may also attract scrutiny from the US, potentially impacting the Malaysian semiconductor industry’s future access to the American market. Despite these challenges, Malaysia is aggressively pursuing high-end investments to position itself as a key player in the global semiconductor market.

MALAYSIA, GERMANY
Malaysia secures potential investments worth US$9.68 billion during Germany visit
(13 March 2024) During his visit to Germany, Malaysian Prime Minister Anwar Ibrahim highlighted significant support and recognition from German leaders and business figures, with potential investments amounting to MYR 45.4 billion (US$9.68 billion). Anwar discussed Malaysia-Germany relations and various economic cooperation aspects with German Chancellor Olaf Scholz. The potential investments span industries such as semiconductors, aerospace, medical devices, chemicals, and services. During a roundtable meeting, attended by over 35 industry leaders, representatives from companies like Siemens AG, B. Braun GmbH, and Airbus Asia Pacific discussed potential business collaborations. Malaysia and Germany have strong trade ties, with Malaysia being Germany’s largest trading partner in ASEAN and over 700 German companies operating in Malaysia, contributing to the creation of 65,000 jobs.

SINGAPORE, JAPAN
Japan’s Toppan Holdings plans to build semiconductor package substrate plant in Singapore
(14 March 2024) Japan’s Toppan Holdings intends to construct a semiconductor package substrate plant in Singapore to begin operations by late 2026, in response to rising demand linked to artificial intelligence. The investment in the plant is estimated at US$338 million, with 200 jobs expected to be created. Further capacity expansions are anticipated in the future, with total investments potentially surpassing 100 billion yen. Toppan’s main customer, Broadcom, may provide financial support for future capacity expansions. The Singapore facility will be strategically located near semiconductor assembly and testing contractors in Malaysia and Taiwan. The chip substrate market is projected to reach US$29 billion by 2028. Toppan received support from Singapore’s government and Broadcom in selecting the plant site and hiring personnel. This move strengthens Toppan’s business continuity plan, complementing its existing production base in Ishikawa prefecture acquired in 2023.

INDONESIA
Trade surplus measures at US$870 million in February 2024, smallest in nine months
(15 March 2024) In February, Indonesia reported its smallest trade surplus in nine months, standing at around US$870 million, significantly lower than the expected surplus of US$2.32 billion polled by Reuters and January’s US$2 billion surplus. This marks the smallest surplus since May 2023. Indonesia, known for exporting commodities such as coal, palm oil, and nickel, experienced a 9.45% drop in exports to US$19.31 billion, driven by declines in coal and palm oil shipments. This decline may be attributed to 2023’s drop in commodity prices and delays in the issuance of mining permits affecting activities in key mines. Meanwhile, imports surged by 15.84% to US$18.44 billion, surpassing market expectations, driven mainly by increased imports of machinery, plastic, and electrical equipment.

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CHINA
Prices of new homes continue sinking despite mortgage rate cuts
(15 March 2024) In February 2024, official data revealed a further decline in the prices of new homes in China, with top-tier cities like Beijing, Guangzhou, and Shenzhen leading a 0.3% monthly drop despite recent mortgage rate cuts. This decline matched the pace seen in January. Year-on-year, prices fell by 1%, attributed in part to a high base effect. Prices for secondhand homes in top-tier cities also decreased by 0.8% in February, indicating continued affordability challenges for many citizens. Other key provincial cities experienced even larger price drops amid subdued demand amidst weaker economic conditions. China’s real estate sector has been under pressure since the implementation of the “three red lines” policy in 2021 to curb overborrowing by developers, leading to defaults among major real estate firms. To support growth while managing risks, authorities hinted at further monetary easing, including maintaining the interest rate on medium-term lending facility loans at 2.5%.

JAPAN
Bank of Japan to discuss exiting negative rate policy next week amidst wage hikes
(14 March 2024) The Bank of Japan (BOJ) is set to deliberate on the potential termination of its negative interest rate policy during its upcoming meeting, spurred by optimism over achieving the 2% inflation target amidst rising wage levels. The decision hinges on the outcome of Japan’s annual wage negotiations, the results of which will be disclosed by Rengo, the top labour confederation, on Friday. If the negative interest rate policy is lifted, it would mark Japan’s first interest rate hike since February 2007, signalling a shift in monetary policy. Discussions also involve the potential discontinuation of yield curve control, coupled with the cessation of asset purchases, including exchange-traded funds and real estate investment trusts. On 13 March, Toyota Motor and other major corporations agreed to meet labour union demands on wages, bolstering expectations for policy adjustments by the BOJ. BOJ Governor Kazuo Ueda emphasised the significance of the negotiation outcomes in the decision-making process.

AUSTRALIA
Australian stocks among world’s worse this week amid China concerns
(15 March 2024) The S&P/ASX 200, a key Australian stock index, experienced a decline of 2.3% during the week, marking its poorest performance since September. The downturn was attributed to concerns over China’s economic condition, particularly in the commodities sector, which heavily influences the Australian market. Mining companies bore the brunt of the losses, despite a rise in copper prices, following perceived inadequacies in Chinese stimulus measures. Additionally, banks suffered significant setbacks, emerging as the worst-performing sector for the week. This decline was exacerbated by discouraging US economic data, which diminished expectations for relaxed monetary policies. Analysts noted that Macquarie’s downgrades of Australian banks further compounded the negative sentiment among investors.

ASEAN, AUSTRALIA
Australia pledges US$41.8 million in funding for maritime security in ASEAN

(4 March 2024) On the first day of the ASEAN-Australia Special Summit 2024, Australia’s Foreign Minister Penny Wong pledged US$41.8 million in funding for maritime security for ASEAN. The funding aims to support maritime cooperation and secure sea lanes, especially in the South China Sea. Although it was not specified which countries the funding would go to, Wong commended Indonesia, Malaysia, Vietnam, and the Philippines for their efforts in delineating maritime boundaries. The summit, held from 4 – 6 March, 2024 in Melbourne, marks 50 years since Australia became a ‘dialogue partner’ of ASEAN. Additionally, Wong highlighted Australian funding for climate resilience in the Mekong region amidst growing regional concerns over a focus on militarisation amid a climate crisis.

INDONESIA
Incoming president Subianto Prabowo vows fiscal discipline and faster growth during his term
(5 March 2024) Indonesia’s presumed president-elect Prabowo Subianto recently outlined his economic agenda at the Mandiri Investment Forum. He aimed for 8% economic growth over the next five years, broadening the tax base, and maintaining fiscal discipline. Preserving fiscal prudence will help bolster Indonesia’s credit profile, with the legal budget deficit cap set at 3% of GDP. Prabowo’s proposed spending initiatives, including free school lunches and milk for 80 million children, aim to enhance health, education, and employment opportunities. This has reportedly faced pushback within the cabinet, particularly regarding fiscal policy, with Finance Minister Sri Mulyani cautioning against an overreliance on state budget expansion. This uncertainty has led to investor apprehension, reflected in recent bond market fluctuations. Prabowo has also pledged to continue existing policies while enhancing efficiency, potentially through state-owned enterprise rationalisation and privatisation. He also seeks collaboration with the financial sector to address inflation, reduce poverty, and bolster food self-sufficiency.

THE PHILIPPINES, UNITED STATES
United States to invest US$30.36 billion in the Philippines
(01 March 2024) According to the Philippines’ Ambassador to the United States Jose Manuel Romualdez, the United States will invest US$30.36 billion in the Philippines. In response to concerns by Filipino exporters that China will reduce the volume of Filipino fruits it imports, Romualduez stated that the US$30.36 billion invested by the United States will help counter economic coercion by Beijing. Noting that the American investment has already been ‘programmed and approved’, Romualdez noted that American businesses are diversifying and will invest in infrastructure, energy, artificial intelligence, health care, manufacturing, and semiconductors.

THE PHILIPPINES
Philippines’ central bank unlikely to return to tightening cycle due to cooling inflation
(6 March 2024) The Philippines’ central bank, Bangko Sentral ng Pilipinas (BSP), is unlikely to resume its tightening cycle, according to BSP Governor Eli Remolona Jr. In its February 2024 policy meeting, the BSP’s Monetary Board opted to maintain key policy rates for the third time, citing a revised inflation outlook for 2024. The target reverse repurchase rate remains at 6.5%, with the overnight deposit and lending facility rates at 6.0% and 7.0% respectively, maintaining the highest levels in 16 years. Since May 2022, the BSP has increased key policy rates by 450 basis points to combat inflation, which averaged 6.0% in 2023, surpassing the target range of 2.0% to 4.0%. The BSP revised its inflation forecast for 2024 to 3.9% from 4.2% in December, stating that it was considering factors like supply-side shocks and potential second-round effects. In February, inflation reversed its downward trend, reaching 3.4%, with rice prices notably contributing to the rise.

MALAYSIA
Malaysian ringgit rises to a one-month high after policymakers ramp up coordination
(04 March 2024) Malaysia’s ringgit rose to a one-month high after policymakers ramped up their coordination with state-linked firms to lift the Malaysian currency from a 26-year low. The Malaysian ringgit advanced as much as 0.6% to 4.7185 per dollar in early Asian trading, its strongest level since 02 February, 2024. Over the past week, the ringgit has emerged as Asia’s best-performing currency. Malaysian policymakers have sought to drive more inflows into the market by urging government-linked companies (GLCs) to repatriate foreign investment income and convert it into ringgit more consistently. Malaysia’s central bank, Bank Negara Malaysia (BNM), will be enhancing its engagement with corporates and investors to further encourage conversions and bolster sentiments towards the ringgit.

MALAYSIA
Malaysia achieves victory in WTO case against EU over ‘discriminatory’ renewable fuel regulation
(6 March 2024) Malaysia has achieved a favourable outcome in its World Trade Organisation (WTO) case against the European Delegated Act, which was perceived as discriminatory towards the country’s palm oil biofuel. Malaysia’s Plantation and Commodities Minister confirmed that the WTO panel’s final report, issued on 5 March, deemed the EU act discriminatory. The dispute originated in 2018 when the EU introduced regulations on renewable fuel usage, particularly concerning biofuels derived from oil palm crops, a key industry in Malaysia. Malaysia argued that these measures violated fair trade practices and initiated legal action against the EU in 2021. The WTO’s final report criticised the EU’s approach to banning palm oil biofuels based on indirect land use change and its lack of consultation with affected economies. The EU has agreed to comply with the WTO ruling, necessitating amendments to its regulations regarding Malaysian palm oil biofuels. The Malaysian government pledges to monitor these changes closely and pursue further action if necessary to ensure compliance.

LAO PDR, VIET NAM
Laotian and Vietnamese provinces partner to jointly promote tourism
(06 March 2024) The northern Laotian province of Huaphan is collaborating with neighbouring Son La province in Viet Nam to organise a joint tourism fair scheduled for 21 – 22 March, 2024. The event will showcase literary and cultural activities reflecting the close relationship between the two provinces, including a theme song symbolising the enduring bond between their peoples. Highlights will include photo exhibitions, displays of tourism and cultural products, and information on tourist attractions and services available in each province. The fair aims to strengthen tourism ties between Huaphan and Son La, fostering friendly relations between Lao PDR and Viet Nam, particularly in the shared border area. Organisers hope the event will attract foreign tourists, boosting cross-border tourism and generating income for local communities.

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CHINA
China to improve policies supporting childbirth and elderly population
(5 March 2024) China will improve policies supporting childbirth as well as the country’s rapidly ageing population. This comes as China’s population fell for the second consecutive year in 2023, with new births dropping to about half of those in 2016, while marriages hit a record low in 2022. According to a report by the country’s state planner, China will seek to improve policies to boost birth rates by refining parental leave policies, improving the mechanism for sharing the related labour costs of employers, and increasing the supply of childcare services. In response to China’s ageing population, the minimum basic old-age benefits for rural and non-working urban residents will be raised, while basic pensions for retirees will continue to increase. Authorities are also seeking to implement a private pension system nationwide.

CHINA
China sets economic growth target of around 5% for 2024
(5 March 2024) On 05 March, 2024, China announced a GDP growth target of ‘around 5%’ for 2024, matching 2023’s goal. China’s economy had expanded by 5.2% in 2023, but matching that this year may be more ambitious given that the economy’s post-pandemic rebound has been considered largely disappointing. China’s economic recovery has been held down by subdued domestic consumption, overcapacity in certain industries, a depressed property sector, and restrained manufacturing activity. In January 2024, the World Bank projected that China’s economy would expand 4.5% in 2024 amid weaker domestic demand and rising geopolitical tensions. The budget deficit target for 2024 is set at 3% of GDP, while consumer inflation is expected to reach 3%.

JAPAN
Japan’s benchmark stock index Nikkei reaches 40,000 for first time
(4 March 2024) On 4 March, 2024, Japan’s benchmark stock index the Nikkei 225 reached the 40,000 level for the first time. Japan’s Nikkei 225 share index rose to 40,314.64 but fell back slightly. It was up 0.5% to 40,150.00 by early afternoon. Shares in Japan have made significant gains over the past year due to strong demand for technology associated with artificial intelligence, the Bank of Japan’s easy credit policy, and a weak Japanese yen. The rally in the Nikkei 225 was led by semiconductor-related stocks such as equipment makers Tokyo Electron and Advantest, which rose by 2.4% and 3.7% respectively. After having risen by 28% in 2023, the Nikkei Stock Average has risen by 19% since the start of 2024.

ASEAN
Many ASEAN social safety nets remain inadequate despite ageing populations
(17 February 2024) ASEAN governments are under pressure to bolster social safety nets to ensure the well-being of their elderly amid ageing populations across the region. According to estimates by the United Nations, the share of working-age people in the region’s 11 countries peaked at 68% in 2023. This ratio already peaked in Thailand in 2013 and Viet Nam in 2014. Indonesia, one of the more youthful countries in the region, is expected to see its ratio top out in 2030. Meanwhile, the ratio of people age 65 or older in the region topped 7%, the threshold for being considered an ‘aging society.’ Despite these figures, in countries like Indonesia and Viet Nam less than 30% of working-age populations are covered by public pension schemes. In many ASEAN economies, social security outlays account for less than 10%, but are expected to grow moving forward.

ASEAN
ASEAN countries implementing more cash handouts to deal with inflationary pressures
(17 February 2024) ASEAN governments are distributing more money directly to households to help them deal with inflationary pressures. Singapore’s recently announced fiscal 2024 budget, for instance, includes SG$600 (US$445) in shopping vouchers for each household, to be distributed across two rounds in June 2024 and January 2025. This follows a SG$500 voucher handout in January 2024. Meanwhile, Thailand’s new government plans to spend US$14 billion to send THB 10,000 through digital wallets to all Thais aged 16 and over who meet certain requirements. Malaysia, for its part, plans to expand its cash aid for low-income households to MYR 10 billion (US$2.1 billion) in 2024 from MYR 8 billion (US$1.7 billion) in 2023. Economists have questioned these expanded cash aid programs, noting that inflation in Southeast Asia has already been cooling. As well, these programs are expected to impact the fiscal health of these economies.

MYANMAR
Number of electric vehicles in Myanmar increases sixfold in a year
(17 February 2024) According to Myanmar’s Ministry of Transport and Communications, the number of registered electric vehicles jumped 6.5 times from a year earlier. Roughly 1,900 EVs were registered in the year through January 2023 alone. This has been attributed to the ruling military regime banning the import of gas-powered cars in 2022 as part of efforts to shore up their dwindling foreign currency reserves. Import tariffs for EVs were also removed in January 2023, and are expected to continue until March 2024. EVs have also become more attractive to Myanmarese consumers due to skyrocketing gas prices, which have been blamed on fuel imports and distribution being disrupted by the shortage of foreign currencies.

THAILAND
Bank of Thailand resists calls to hold emergency meeting to slash rates
(21 February 2024) The Bank of Thailand (BOT) is resisting calls from the Thai government to hold an emergency meeting to slash rates in response to weak economic growth and negative headline inflation. GDP grew by only 1.9% in 2023, missing market expectations. In response to these weak GDP figures, Prime Minister Srettha Thavisin urged the BOT to hold an emergency meeting before the next regular meeting on 10 April, 2024 to cut rates. Refuting claims by Srettha that the Thai economy is in crisis, the governor of the BOT instead pointed to weak spending by Chinese tourists, a slowdown in Chinese imports from Thailand, and a delay in passing the government’s 2024 budget as reasons why the country’s growth remains sluggish. The ongoing dispute between the government and the BOT has raised fears about the long-term independence of the latter.

MALAYSIA
Malaysian ringgit hits lowest level in 26 years
(20 February 2024) On 20 February, 2024, the Malaysian ringgit hit its lowest level since the Asian Financial Crisis of 1998, which was 26 years ago. The Malaysian ringgit fell nearly 0.3% to almost 4.8 against the US Dollar. The ringgit has suffered a more than 4% drop already in 2024, which has been blamed on Malaysia’s poor export performance, uncertainties about China’s current economic prospects, and rising US interest rates. Malaysia’s central bank argued that growth in global trade and Malaysian exports will nevertheless have a positive impact on the ringgit in 2024. Malaysia’s ringgit is also expected to strengthen against the US Dollar after US authorities recently signaled an end to rate hikes.

MALAYSIA, BRUNEI DARUSSALAM
68% of Malaysian diaspora working in Brunei Darussalam are skilled workers
(21 February 2024) According to data by the Department of Statistics Malaysia (DOSM), 68% of the Malaysian diaspora working in Brunei Darussalam are skilled workers, while 24.1% are semi-skilled. It was also found that for those Malaysians working in Brunei, 41.3% were earning monthly gross salaries between BND 1,000 (MYR 3559.51) and BND 3,000 (MYR 10,678.53), while a further 43.5% received between BND3,001 (MYR 10678.53) and BND10,000 (MYR 35,595.09). Most Malaysians were working in Brunei because of job opportunities, higher salaries, and the high exchange rate of the Bruneian Dollar vis-a-vis the Malaysian Ringgit.

SINGAPORE
Singapore hosted regional headquarters for 4,200 multinational firms in 2023
(22 February 2024) According to a Bloomberg Intelligence report, Singapore hosted the regional headquarters for 4,200 multinational firms in 2023, extending its lead and dwarfing the 1,336 found in its lead rival Hong Kong. It was noted that even many Chinese companies are seeking to station their operations in Singapore to hedge their geopolitical risks. Multinational firms are choosing Singapore due to its better relations with the West, broader talent pool, diversified economy, and tax incentives. Furthermore, while Hong Kong has a lower standard corporate tax rate of 16.5%, this is bested by Singaporean programs that can cut its 17% tax rate to 13.5% or less for certain activities.

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SOUTH KOREA
Bank of Korea maintains its growth projections for 2024 at 2.1%
(22 February 2024) The Bank of Korea maintained its growth projections for 2024 at 2.1%, while also pointing to stubbornly high inflation and household debt as potential headwinds. The Bank of Korea also announced it would keep its key rate steady at 3.5%, marking the ninth consecutive session where it has held the rate. The central bank also maintained its inflation projection at 2.6%. Analysts noted that inflation remains higher than the Bank of Korea’s target, and that risks remain in the form of high real estate prices and household debt.

CHINA, MEXICO
China circumvents US tariffs by shipping more goods via Mexico
(21 February 2024) According to analysis data by the Financial Times, China is circumventing US tariffs by shipping more goods via Mexico. According to figures by Container Trades Statistics, the number of 20ft containers shipped from China to Mexico reached 881,000 in the first three quarters of 2023, the most recent period for which data is available, up from 689,000 in the same period of 2022. The rise came as Mexico overtook China as the largest exporter of goods to the US in 2023. Due to tariffs implemented by the Trump administration in 2018 and which were maintained by the subsequent Biden administration, shipments arriving directly from China now account for less than 15% of US imports, down from more than a fifth in 2017.

JAPAN
Japan’s benchmark Nikkei Stock Average closes above all-time high set in 1989
(22 February 2024) On 22 February, 2024, Japan’s benchmark Nikkei Stock Average closed above its all-time high set in December 1989. The average rose to 39,098, up 836.52 points or 2.19% from the previous day’s close, surpassing the all-time closing high of 38,915.87 recorded on 29 December, 1989. Year-to-date, the Nikkei Stock Average has gained 16.8%. It has been one of the top-performing global indexes since 2023, when it rose by around 30%. The rally in the index was led by semiconductor stocks such as equipment makers Tokyo Electron and Advantest. The rise of the Nikkei Stock Average has been fueled by global investors, who have been lured by corporate governance reforms, a weak yen, an ultra-low interest rate environment, and a tax-deferred investment program aimed at small investors.

INDONESIA
Prabowo Subianto on track to win Indonesian presidential election based on quick count of results
(14 February 2024) Former army general Prabowo Subianto is on track to win Indonesia’s presidential election held on 14 February, 2024, based on a quick count of the final results. As of 8 p.m. Jakarta time, the pollsters’ quick counts, based on about 90% of votes counted at sample polling stations, indicate Prabowo winning 57% to 59% of the total vote. In comparison, former Jakarta Govenor Anies Baswedan secured 24% to 26% of the total vote, while former Central Java Governor Ganjar Pranowo secured 16% to 17%. To win the presidential election, a candidate must gain the majority of total votes and more than 20% in at least half of the 38 provinces. If a candidate is unable to secure this, a second round is held on 26 June. The General Elections Commission has until 20 March to announce the final results.

INDONESIA
Indonesian stocks jump in early trading as Prabowo declares victory
(15 February 2024) Indonesian stocks jumped in early trading on 15 February after Indonesian Defense Minister Prabowo Subianto declared victory in the country’s presidential election held on 14 February, 2024. The Jakarta Composite Index rose as much as 2.2%, the most since May 2022, after Prabowo secured nearly 60% of votes in quick counts done by private pollsters. It closed 1.3% higher at 7,303.28 on 15 February. A swift victory for Prabowo is likely to remove the uncertainty that would come from a prolonged election. The defense minister largely campaigned on policy continuity with the current administration of President Joko Widodo, which also appealed to investors.

THAILAND
Government delays approval of draft bill banning recreational usage of cannabis
(13 February 2024) The Thai government has delayed the approval of a draft bill banning the recreational usage of cannabis as it seeks more opinions from other parties. According to Thailand’s Public Health Minister, the Ministry of Public Health could not submit the bill to the cabinet on 13 February, 2024 because more time is needed to seek views. Thailand’s Prime Minister Srettha Thavisin had pledged to limit cannabis only for medical and health-related use during the May 2023 election campaign over public concerns over addiction. The previous administration had implemented landmark legislation in mid-2022 to decriminalize the usage of cannabis, making Thailand the first country in Asia to do so.

MALAYSIA
Malaysia’s economy expands below target at 3.7% in 2023
(16 February 2024) According to Bank Negara Malaysia, Malaysia’s economy expanded by 3.7% in 2023, below the official target of 4% to 5%. This was a substantial drop from the 8.7% growth recorded in 2022. In the last quarter of 2023, GDP growth slowed to 3.0%, from the 3.3% growth recorded in the previous quarter. The fourth quarter performance was worse than the average 3.4% forecast in a Reuters poll of 23 economists published on 14 February, 2024. Bank Negara attributed this slowdown to a ‘challenging external environment’, and pointed to  slower global trade, the global tech downcycle, geopolitical tensions, and tighter monetary policies. Malaysia’s overall trade was down 7.3%, while manufacturing managed just 0.8% growth due to continued weakness in the electrical and electronics industry.

SINGAPORE
Non-oil domestic exports grows 16.8% year-on-year in January 2024
(16 February 2024) Singapore’s non-oil domestic exports grew by 16.8% year-on-year in January 2024, aided by growth in both electronic and non-electronic products. Non-oil domestic exports amounted to US$9.88 billion in January 2023, compared to US$11.5 billion last month. The expansion has continued the growth seen in November 2023, when non-oil domestic exports grew 1% after falling for 13 consecutive months. On a month-on-month seasonally adjusted basis, non-oil domestic exports grew 2.3% in January, after declining 2.8% in December 2023. The biggest expansion was in exports to China, which grew 101.3% year-on-year.

THE PHILIPPINES
Filipino conglomerate San Miguel chosen to revamp and operate main international airport
(16 February 2024) A consortium led by Filipino conglomerate San Miguel has been chosen by the Philippines government to revamp and operate Ninoy Aquino International Airport (NAIA), the country’s main international airport based in Manila. On 16 February, 2024, authorities announced that the winning contract went to San Miguel, which offered the central government 82% of revenue if it was granted a license to operate the airport under a privatization deal that will run for 15 years, with an option to extend it by another decade. The consortium includes RLW Aviation Development, RMM Asian Logistics and South Korea’s Incheon International Airport, and is expected to begin running operations within three to six months.

VIET NAM
Viet Nam records surging number of international arrivals during Chinese New Year holidays
(15 February 2024) According to the Vietnam National Authority of Tourism, Viet Nam recorded a surging number of international arrivals during the Chinese New Year holidays. While the city of Danang welcomed nearly 177,000 foreign arrivals between 8 to 14 February, Hanoi welcomed nearly 103,000 arrivals. During the same period, the number of international arrivals traveling to Ho Chi Minh City hit 75,000, while travelers to the Mekong Delta province of Kien Giang reached 44,370. Meanwhile, the number of arrivals to the Central Highlands province of Lam Dong reached 20,000. Authorities attributed the increase in the number of foreign visitors to favorable visa policies, proper market exploitation, and effective promotion activities.

RCEP Monitor

JAPAN
Japan’s economy unexpectedly falls into recession on 15 February, 2024
(15 February 2024) Japan’s economy unexpectedly fell into recession on 15 February, 2024 after shrinking for the second consecutive quarter in the last quarter of 2023. Japan’s GDP would contract by 0.4% year-on-year in the fourth quarter of 2023. The economy had shrunk by 3.3% year-on-year in the previous quarter. Japan would also lose its spot as the third largest economy in the world to Germany in US Dollar terms in 2023. While the IMF had predicted that Germany would overtake Japan as the third-largest economy in October 2023, the change in ranking will only be declared by the IMF once both countries have published the final versions of their economic growth figures.

SOUTH KOREA
South Korea prepares US$56.97 billion financial support programme for companies
(15 February 2024) South Korea has prepared a US$56.97 billion financial support program for companies increasing investments into key sectors as well as small businesses struggling with high-interest rates. The program includes US$11.26 billion worth of cheap policy loans from a state-run bank for key industries, such as semiconductor and battery, while commercial banks will also provide US$15.01 billion to support small and medium-sized businesses. South Korea’s Financial Services Commission cited the need for regulatory reform and financial support, pointing to evolving trade relations with China, technological advancement in major industries, and fragmentation of global supply chains.

AUSTRALIA
Unemployment rate stands at two-year high of 4.1% in January 2024
(15 February 2024) According to the Australian Bureau of Statistics, Australia’s unemployment rate in January 2024 jumped to a two-year high of 4.1%. In comparison, the unemployment rate measured 3.9% in December 2023. The economy added 11,100 full-time jobs while shedding 10,600 part-time roles, leaving a net gain for the month of just 500 jobs. This increase in the jobless rate was attributed in part to more people looking for work at the start of 2024. However, the participation rate remained unchanged from December 2023 at 66.8%. The Reserve Bank of Australia will be monitoring these latest numbers as it assesses the impact of 13 increases in official interest rates since May 2022.

VIET NAM
Viet Nam pushes US to change its ‘non-market economy’ classification
(05 February 2024) Viet Nam is pushing the US to change its ‘non-market economy’ classification before the US presidential elections in November 2024. The US continues to classify Viet Nam as a non-market economy, defined as a country in which the state has either a monopoly or near-monopoly on trade. The classification primarily impacts the response to allegations of ‘dumping’. The US uses different criteria to assess dumping in market and non-market economies, with the latter more liable to pay significantly higher anti-dumping duties. On 24 October, 2023, the US Commerce Department announced it would review Vietnam’s non-market economy classification. A decision that must be made within 270 days, meaning around mid-July 2024.

THAILAND
Government to ‘urgently’ move bill to ban the recreational use of cannabis
(06 February 2024) The Thai government is seeking to ‘urgently’ move a Bill that would ban the recreational use of cannabis. Thailand had previously decriminalized the drug in June 2022 under the previous government, which included the pro-decriminalization Bhumjaithai party. The move would prompt hundreds of cannabis dispensaries to sprout around the country, particularly in Bangkok. Critics have called for tighter legislation. Thailand’s health minister said the new Bill – which bans the recreational use of cannabis – will be proposed at the Cabinet meeting next week. The new Bill would be an amendment to the existing one, and will only allow the usage of cannabis for health and medicinal purposes.

THAILAND
Thai SEC announce new criteria for marking troubled stocks on Bangkok bourse
(06 February 2024) On 06 February, 2024, the Thai Securities and Exchange Commission (SEC) announced new criteria for marking financially distressed companies listed on the Bangkok bourse from April 2024 onwards. As part of the new rules, the “C” or caution sign will apply to companies that have reported net losses for three consecutive years or annual revenue below THB 100 million (US$2.8 million), defaulted on loans or bonds, or submitted financial statements with a “no comment” from an auditor. As well, companies with a free-float ratio below the minimum requirement will be marked with “CF,” while those with inadequate audit committee members will receive a “CC.” The new measures come amidst calls for Thailand to raise the standard of listed companies and prevent corporate scandals that contributed to the SET index falling 15.2% in 2023, becoming Asia’s worst-performing market.

THE PHILIPPINES
Inflation rate eases to 2.8% year-on-year in January 2024
(06 February 2024) According to the Philippine Statistics Authority (PSA), the inflation rate in the Philippines eased to 2.8% year-on-year in January 2024 from 3.9% in December 2023. According to the PSA, the inflation rate in January was the lowest since the 2.3% inflation rate recorded in October 2020. In January 2023, the inflation rate was recorded at 8.7%. The downtrend in the overall inflation in January was primarily attributed to a slower annual increment of food and non-alcoholic beverages prices at 3.5% in January from 5.4% in December. Core inflation, which excludes select food and energy prices, decreased to 3.8% in January from 4.4% in December.

SINGAPORE
Singaporean banks’ profits set to peak in fourth quarter of 2023 due to coming rate cuts
(6 February 2024) Singaporean banks’ profits are expected to peak in the fourth quarter of 2023 due to central banks around the world pivoting towards rate cuts. Analysts have argued that the earnings momentum for Singaporean banks has peaked, with the tailwinds enjoyed by rising interest rates in 2023 unlikely to be sustained in 2024. Besides higher global rates, Singapore banks have also benefited from strong inflows of wealth over the last few years. Singaporean banks are also expected to see sharper scrutiny of their wealth management businesses in 2024 in response to an SGD 2.2-billion money laundering scandal that hit Singapore last year.

MALAYSIA
Malaysia’s benchmark stock index ends higher after volatile session
(06 February 2024) On 06 February, 2024, Malaysia’s benchmark stock index, the FBM KLCI, recovered from a volatile trading session to end on a slightly positive note as investors weighed larger developments in the global economy. The day’s trading volume totaled 3.09 billion shares valued at MYR 2.17 billion (US$455 million). Malaysia’s stock market was helped along by bullish sentiments concerning China’s economy, in particular news that Beijing will ramp up support. Among Malaysia’s blue chip stocks, Nestle rose for a sixth consecutive session by RM1.30 (US$0.27) to RM121.30 (US$25.45) as the food & beverage giant is expected to benefit from the seasonal festivities.

INDONESIA
Indonesian economy expands 5.05% in 2023, lower than 2022’s 5.31%
(06 February 2024) According to Statistics Indonesia (BPS), Indonesia’s economy expanded by 5.05% year-on-year in 2023, lower than the 5.31% recorded in 2022. The economy also expanded on a quarterly basis from 4.94% in the third quarter of 2023 to 5.04% in the fourth quarter. The island that saw the largest GDP increase was Kalimantan, the site of the new capital city of Nusantara under construction, followed by Sulawesi and Maluku, which are locations for nickel downstream investments. Maintaining domestic demand was another factor driving growth.

RCEP Monitor

AUSTRALIA
Australia’s central bank keeps interest rates at 12-year high and suggests further tightening possible
(06 February 2024) Australia’s central bank, the Reserve Bank of Australia (RBA), left interest rates at a 12-year high on 07 February, 2024, and suggested that further tightening may be needed. The RBA kept its cash rate at 4.35%, and stated that a further increase in rates cannot be ruled out. The Australian Dollar rose as much as 0.5% to 65.17 US cents, while yields on three-year government bonds were up 2 basis points to 3.70%. Compared to many of its global peers, the RBA retains a mild tightening bias. The RBA also predicts that core inflation will only hit the midpoint of its 2% to 3% target band in 2026.

JAPAN
Toyota to boost spending on EV production in the US by US$1.3 billion
(07 February 2024) Toyota is boosting investment at a factory in the state of Kentucky in the US by US$1.3 billion. The Japanese automaker announced that the added spending is earmarked for its first U.S.-made EV and other unspecified battery-powered models, and includes money for a battery pack assembly line at the factory. The added investment brings total outlays at the Georgetown, Kentucky, factory to nearly US$10 billion since 1986. The Kentucky location is Toyota’s oldest vehicle assembly plant in the U.S. Toyota has taken a more cautious approach towards introducing fully electric vehicles than peers such as Volkswagen and General Motors.

AUSTRALIA
Australia to propose setting up international standards for ethical and environmentally friendly mining
(07 February 2024) The Australian government has proposed setting up international standards for ethical and environmentally friendly mining in an attempt to command higher prices for its minerals. Australia’s Minister of Resources stated that she will propose the idea at the PDAC 2024 Convention, a mineral industry trade event, in Canada in March 2024. She also noted that Australia intends to cooperate with ‘like-minded nations’ including Canada, which already has high working standards and environmental standards. This comes amidst the falling global prices of metals such as nickel and lithium, which has negatively impacted the Australian minerals industry. The slump follows an EV market slowdown alongside oversupply from countries like Indonesia. An international standard on ethics and the environment could help strengthen the competitiveness of Australia’s minerals, which are relatively expensive compared to other countries.

INDONESIA
Future of planned capital city Nusantara faces uncertainties due to coming election
(31 January 2024) The future of Indonesia’s planned capital city Nusantara faces uncertainties due to the country’s coming elections on 14 February, 2024. The Indonesian government plans to finance 20% of the total funding for the project, while private investors will finance the remaining 80%. However, private funding for the new capital has recently halted, with investors awaiting the election results and what Jokowi’s successor’s views on the project are. Of the three candidates to replace Jokowi, two of them, Prabowo Subianto and Ganjar Pranowo, have declared their support for Nusantara and intend to continue it. The remaining candidate, Anies Baswedan, has expressed skepticism about the project, arguing Indonesia has more urgent problems to fix. As of now, foreign investors have remained hesitant to pledge funding for the project. As of 16 January, the government has received about 345 letters of interest, of which about 207 were from domestic companies.

INDONESIA
Inflation eases to 2.57% in January 2024, midpoint of central bank target
(01 February 2024) According to data by Bank Indonesia, Indonesia’s inflation rate eased to 2.57% in January 2024. This is a slight decrease from the 2.61% measured in December 2023. The inflation rate in January 2024 is near the midpoint of Bank Indonesia’s target range of 1.5% to 3.5% for 2024. The core inflation rate, which excludes government-controlled prices and volatile food prices, also cooled to 1.68% in January, from 1.80% in December. Inflation in Indonesia has stayed within the central bank’s target range since the middle of 2023, helped by Bank Indonesia’s interest rate hiking cycle of 250 basis points between August 2022 and October 2023.

MALAYSIA
Malaysia’s PMI rises to 49.0 in January 2024, a sixteen-month high
(01 February 2024) According to S&P Global, the seasonally-adjusted S&P Global Malaysia Manufacturing purchasing managers’ index (PMI) rose to 49.0 in January 2024, from 47.9 in December 2023 and the highest since September 2022. The latest reading suggests that 2023’s downturn is losing momentum and sets the Malaysian manufacturing sector on course for a gradual recovery. It was noted that new orders, output, and exports were all scaled back to lesser extents in January, representative of a slight pick-up in the rate of GDP growth. Manufacturing new orders also moderated for the seventeenth month running in January, though the latest slowdown was the weakest recorded since October 2022.

ASEAN
Funds raised through IPOs in Southeast Asia drop over 60% in second half of 2023
(31 February 2024) Funding raised through IPOs dropped over 60% year-on-year in the second half of 2023, with companies shying away from listings due to factors such as China’s ongoing slowdown as well as domestic elections. A total of US$1.6 billion was raised in the second half of 2023, down 63% year-on-year. The number of IPOs dropped 21% to 71. Thailand saw the largest fundraising drop in the region, declining by 75% to US$773 million. This was attributed to the political uncertainty that followed the May 2023 election, when there was a delay in setting up the new government. In Indonesia, the number of IPOs in the July-December period of 2023 dropped from 42 to 31, as investors await the results of the coming elections in February 2024. Some analysts forecast the IPO space to improve in 2024 as the interest rate environment begins to stabilize.

ASEAN
Chinese EV maker BYD eyes aggressive expansion in ASEAN
(31 January 2024) Chinese electric vehicle (EV) maker BYD is pursuing an aggressive expansion in ASEAN, particularly in Singapore and the Philippines. The automaker plans to open more than a dozen sales outlets for passenger cars this year in Singapore and the Philippines. In mid-January, BYD launched three of its passenger models in Indonesia, including its Seal sedan, Atto 3 sports utility vehicle, and the Dolphin hatchback. This marked its foray into the Indonesian market. In Singapore and the Philippines, BYD works with local distributors to sell its EVs, namely automotive group Sime Darby Motors and the Philippine conglomerate Ayala respectively.

THE PHILIPPINES
Economy expands by 5.6% in 2023, missing government target of 6% to 7% growth
(31 January 2024) Annual GDP growth for the Philippines for 2023 came in at 5.6%, short of the 7.6% pace in 2022 and missing the government target of 6% to 7% growth. Growth in the fourth quarter of 2023 came at 5.6%, weaker than the 7.1% recorded in the same period in 2022. The Philippines economy faced multiple headwinds in 2023, including soaring food prices and persistent supply chain bottlenecks. In response, the central bank, the Bangko Sentral ng Pilipinas (BSP), raised interest rates to their highest in years, which also dampened household spending power. The BSP currently maintains its benchmark lending rate at 6.5%, after an emergency increase of 25 basis points in October 2023.

SINGAPORE
Investment commitments in Singapore slowed to US$9.5 billion in 2023 from US$16.78 billion in 2022
(30 January 2024) Investment commitments into Singapore slowed to US$9.5 billion in 2023 from a record US$16.78 billion in 2022. According to the Economic Development Board (EDB), these commitments are expected to create 20,045 jobs over the next five years. About 58% of those jobs are likely to be in services, 26% in research and development, and the remaining 16% in manufacturing. The EBD noted that the outlook for 2024 remains challenging due to many headwinds, including ongoing geopolitical tensions, policy uncertainty created by electoral contests in many jurisdictions, increased competition for investments, and macroeconomic uncertainty.

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CHINA
China’s debt-to-GDP ratio climbs to new record high in 2023 despite slow pace of borrowing
(30 January 2024) According to a report by the National Institution for Finance and Development (NIFD), China’s debt-to-GDP ratio rose to a new record high in 2023 despite the slow pace of borrowing, reflecting China’s weak economic growth. The macro leverage ratio, which measures total outstanding nonfinancial debt as a share of nominal GDP, rose to 287.8% in 2023, up 13.5% year-on-year. It was found that the expansion of the overall leverage ratio outpaced the growth of borrowing. The total liabilities of the household, corporate, and government sectors expanded at 9.8% in 2023, largely unchanged from 2022. The limited debt expansion and significant rise of the macro leverage ratio in 2023 were attributed to the slowdown in China’s nominal economic growth. China’s nominal growth measured at 4.6% in 2023.

CHINA
China’s benchmark PMI measures at 49.2 for first month of 2024
(31 January 2024) According to China’s National Bureau of Statistics, China’s benchmark purchasing managers’ index (PMI) came in at 49.2 for the first month of 2024. The reading was higher than the 49.0 measured in December 2023. The slight improvement in January 2024’s PMI was attributed to a rebound in the manufacturing sector. The PMI has been below the 50-point level that separates growth from contraction since October 2023 — and for most of 2023 — amid a global economic slowdown and an uneven recovery in domestic demand. The PMI rose for the first time since October 2023, backed by gains in subindexes including production and new export orders. Readings for imports and finished goods inventory also improved in the period before the country enters the Lunar New Year in early February 2024.

CHINA
Foreign investors sell net US$2 billion worth of mainland Chinese stocks in January 2024
(31 January 2024) Foreign investors sold a net US$2 billion worth of mainland Chinese stocks in January 2024. The month also produced the sixth consecutive monthly outflow since August 2023. This trend marks the ‘strongest’ and ‘longest’ net outflow since the Stock Connect trading link between Hong Kong and the mainland opened in 2014. These outflows came despite measures by the Chinese government to prop up the stock market. This included China’s central bank cutting the bank reserve ratio to boost liquidity. As well, China’s securities regulator said it was suspending stock borrowing via exchanges for short selling. According to Goldman Sachs, the Chinese and Hong Kong markets are performing the worst and third worst in Asia in dollar terms year-to-date, with losses of 10.9% and 9.8% respectively.

ASEAN
Southeast Asian markets poised for turnaround in 2024 on back of cheap valuations
(22 January 2024) Southeast Asian markets are poised for a turnaround in 2024 on the back of cheap valuations and potentially high economic growth. This follows sluggish growth for said markets in 2023. According to research by Maybank Investment Banking Group, improving growth, rising exports, a pick up in manufacturing, and a better-than-expected outlook by Taiwan Semiconductor Manufacturing Company last week all mean that Southeast Asia markets are poised for a better year. The MSCI Southeast Asia Index dropped a little over 3% in 2023, compared with the more than 20% rise in the broader MSCI World Index. It was noted that even a potential US recession will not dampen optimism for Southeast Asian markets, with certain countries such as Indonesia, Malaysia, and Thailand strongly driven by domestic consumption. Meanwhile, other economies in the region are placed to benefit from their growing presence in the chips and electric vehicle industries.

ASEAN
The Philippines, Indonesian and Malaysian currencies reach three-month low
(25 January 2024) The Filipino peso, Indonesian rupiah and Malaysian ringgit were among several Asia-Pacific currencies that reached a three-month low against the US dollar on 24 January, 2024. Meanwhile, the Thai baht was among others which reached its weakest in one or two months. The weakening of many ASEAN currencies is attributed to both a slowdown in the Chinese economy as well as the firmness of the US dollar. Many Asian economies depend heavily on China, meaning any slump in the latter tends to spur selling in their home currencies. The most important industries in these countries for earning foreign currencies depend on the Chinese economy, from electronic devices in the Philippines to tourism in Thailand.

VIET NAM, GERMANY
Germany President visits Viet Nam with business delegation
(23 January 2024) German President Frank-Walter Steinmeier visited Hanoi on 23 January, 2024 alongside a business delegation to explore alternative markets as part of its China de-risking strategy. Steinmeier met with Viet Nam’s President Vo Van Tthuong, where they both signed a memorandum of understanding on facilitating the movement of skilled workers from Vietnam to Germany. According to the German Chamber of Commerce in Viet Nam, German companies have invested more than US$3 billion into Viet Nam. Germany is Viet Nam’s most important trading partner in the European Union, while Viet Nam is one of Germany’s most important partners in ASEAN.

MALAYSIA
Malaysia’s economy to expand by 4.6% in 2024
(20 January 2024) According to RHB Investment Bank (RHB IB), Malaysia’s economy is set to expand by 4.6% in 2024. RHB IB noted that Malaysia’s growth momentum is expected to accelerate in 2024, driven by improvements in external demand. It noted that nominal export growth is projected to rebound by 4.3% year-on-year in 2024, compared to a decline of 8% in 2023. The bank also had a positive outlook on private consumption growth, supported by robust labor market demand conditions. Among the potential upside risks to its 2024 growth forecasts include the continuation of major infrastructure projects, alongside the implementation of business-friendly policies and incentives focusing on priority sectors such as technology, tourism, and agriculture, as well as those with export capacity.

INDONESIA
Troubled state-owned builder PT Wijaya Karya signs US$1.31 billion debt restructuring deal
(24 January 2024) Troubled Indonesian state-owned builder PT Wijaya Karya signed a US$1.31 billion debt restructuring deal with 11 financial institutions, including PT Bank Mandiri, PT Bank Negara Indonesia, PT Bank Rakyat Indonesia, PT Bank Tabungan Negara, PT Bank Syariah Indonesia, and PT Bank Panin. The deal covers 87.1% of the debt being restructured as of 23 January. Wijaya Karya has seen its liabilities balloon amid an aggressive push to build infrastructure under the presidency of Joko Widodo. The company has switched 93% of its projects to a payment mechanism based on monthly progress, a significant increase from the 40% in 2016.

THAILAND
Thai stock exchange to expedite delistings to improve investor sentiment
(23 January 2024) The Stock Exchange of Thailand (SET) has outlined new rules and procedures to monitor listed companies and prevent fraud, as well as to expedite the delisting of companies. This is to improve investor perceptions of the SET, which finished as Asia’s worse-performing market in 2023. The SET Index fell by 15.2% in 2023 amid halting recoveries for manufacturing and tourism plus decade-high interest rates. Among the changes in the bourse’s three-year operational plan include additional grounds for delisting and oversight of companies reporting weak performance. As well, the window for companies to improve their performance before being delisted will also be narrowed. This is to shorten the delisting process, which can take up to seven years at present.

THE PHILIPPINES
Authorities shelve plans for more taxes amid elevated high inflation
(24 January 2024) Authorities have shelved plans to impose new taxes on junk food and sweetened beverages amid high inflation. The Philippines’ Finance Secretary stated that it is ‘not the time’ to impose additional taxes, but to prioritize enforcement of existing laws instead. He stated that there may be a need to ‘temper’ a proposed hike in taxes on motor vehicle users, but was supportive of measures imposing levies on single-use plastic and digital services. In 2023, the country had listed priority measures that the Filipino Congress needed to pass, including reforming the military’s pension system. Under the proposals for military pensions, soldiers and uniformed personnel would pay to their retirement funds instead of the state.

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CHINA
Chinese gaming stocks rise after regulators seemingly take down draft regulations
(23 January 2024) The stocks of Chinese gaming companies rose in Hong Kong after regulators seemingly took down the draft of regulations aimed at curbing players’ spending. The draft of the gaming rules had been removed from the official website of the National Press and Publication Administration (NPPA), China’s gaming regulator, as of the morning of 23 January, 2024. It is unknown if the draft rules were removed due to the rules being scrapped or because the consultation period for the draft regulations had ended. The issuance of the draft regulations in December 2023 wiped out the equivalent of billions of U.S. dollars of Chinese gaming companies’ market capitalizations just one day after it went online, as investors feared a new tech crackdown.

CHINA
Hong Kong-listed stocks hits 36% discount to mainland peers, deepest in 15 years
(22 January 2024) A rout in Chinese stocks listed in Hong Kong has pushed their discount to mainland peers to 36%, their deepest in 15 years. The steeper losses in Hong Kong, where some of China’s most influential firms are listed and there is less interference from Beijing, suggests global investor sentiments towards the Chinese economy remains gloomy. The seemingly endless selloff in Chinese shares has been attributed to a range of factors, from a deepening housing slump to stubborn deflationary pressures to uncertainty about US interest rates. Chinese stocks listed in Hong Kong are often regarded as a better barometer of the health of China’s economy and a more accurate gauge of broader investor sentiment.

SOUTH KOREA
South Korea’s economy maintains 0.6% growth for fourth quarter of 2023
(25 January 2024) According to the Bank of Korea, the Korean economy maintained quarterly growth of 0.6% in the fourth quarter of 2024. This brought overall growth for 2023 to 1.4%. South Korea had earlier registered 0.6% growth in the second and third quarters of 2023. Exports grew by 2.6%, down from 3.4% the preceding quarter, while private consumption registered 0.2% growth, a slight decline from 0.3% the preceding quarter. The Bank of Korea projects the economy to expand by 2.1% in 2024, down from an initial outlook of 2.4%. The IMF has predicted annual growth of 2.2%.