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

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

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
Singapore leads ASEAN in total revenue generated on Fortune Southeast Asia 500 list
(18 June 2025) Singapore accounted for the highest total revenue generated among Southeast Asian nations on the Fortune Southeast Asia 500 list, with its 81 companies generating USD 637 billion in 2024—representing approximately one-third of the total USD 1.8 trillion revenue from all 500 firms. Although it ranked fourth in number of entries, Singapore surpassed Thailand, which ranked second by revenue with USD 352 billion. Trafigura Group, headquartered in Singapore, remained the region’s top earner for the second consecutive year with USD 243.2 billion in revenue, nearly quadruple that of Wilmar, the next largest Singaporean firm. Despite lower revenue figures, Singapore’s top three banks—DBS, OCBC and UOB—were identified as the region’s most profitable companies. The Southeast Asia 500 list, launched in 2024, includes firms headquartered in seven countries and encompasses publicly listed, private, and state-owned entities. The combined revenue of firms on the 2024 list rose by 1.7%, compared to the 4.1% GDP growth in the region. Fortune attributed the region’s rising global significance to shifts in global trade patterns and increased capital flows driven by manufacturing growth and post-tariff trade realignments. Singapore’s role as a regional hub continues to attract firms aiming to access neighbouring markets such as Malaysia and Indonesia.

RCEP Monitor

AUSTRALIA
Australia sees net employment decline of 2,500 in May 2025
(20 June 2025) Australia recorded a net employment decline of 2,500 in May 2025, contrary to expectations of a 21,200 increase, with all losses occurring in part-time roles while full-time jobs rose. The unemployment rate remained steady at 4.1% as the labour force participation rate fell slightly to 67%, indicating reduced job-seeking activity. Despite historically low unemployment, the rate has edged above 4% throughout the year. The Australian dollar and yields on three-year government bonds were largely unchanged following the data release. Money markets are now pricing in an 80% probability that the Reserve Bank of Australia will cut the cash rate from 3.85% to 3.6% at its 8 July meeting, with two additional reductions anticipated. The jobs data adds to a series of indicators suggesting subdued economic momentum following the RBA’s dovish stance in May. Global risks, including Middle East conflict, heightened oil prices, US tariffs, and slowing Chinese demand, are contributing to the uncertain outlook. Treasurer Jim Chalmers warned that Australia is exposed to global volatility despite being relatively well-positioned. The continued low unemployment has so far helped the federal government by reducing welfare liabilities and increasing tax revenues amid rising fiscal pressures.

CHINA, UNITED STATES
China’s holdings of US Treasuries fell to USD 757 billion in April 2025, lowest level since March 2009
(19 June 2025) China’s holdings of US Treasuries fell to USD 757 billion in April 2025, the lowest level since March 2009, marking a USD 8.2 billion decline from March and continuing a two-month downward trend amid escalating US-China trade tensions. This reduction follows China’s drop to the third-largest foreign holder of US debt, behind Japan and the United Kingdom. The trade conflict, reignited on 2 April with former President Trump’s “reciprocal tariffs,” prompted significant financial market volatility, including declines in US equities, Treasuries, and the dollar. Concerns have resurfaced over potential financial decoupling, with Chinese officials warning against the weaponisation of the US dollar and advocating for a multipolar financial system and yuan internationalisation. Despite China’s divestment, total foreign holdings of US Treasuries remained high at USD 9.01 trillion, with Japan, the UK, and Belgium increasing their positions. Net private investor sales of US bonds and notes amounted to USD 46.8 billion, driving the monthly overall decline, although official foreign holdings of longer-term Treasuries rose by USD 1.5 billion. Belgium’s holdings rose by USD 8.9 billion to USD 411 billion, some of which may include Chinese assets held via custodial accounts.

CHINA
China maintains its 1-year and 5-year loan prime rates at 3.0% and 3.5% respectively
(19 June 2025) China maintained its 1-year and 5-year loan prime rates at 3.0% and 3.5% respectively on Friday, following last month’s 10 basis point cut, as recent trade developments with the US alleviated some economic concerns. The decision, aligned with Reuters poll expectations, comes after prior easing steps including commercial bank deposit rate reductions to protect margins. The 1-year LPR impacts corporate and most household loans, while the 5-year LPR benchmarks mortgages. The rate hold reflects a moderated policy stance, with Nomura reducing its Q4 rate cut forecast to 10 basis points and maintaining a 50-basis-point reserve ratio cut outlook. Chinese policymakers appear satisfied with current monetary conditions and are expected to prioritise targeted support measures over broad stimulus in the near term. The PBOC Governor reaffirmed Beijing’s push for wider international use of the digital yuan and a multi-polar currency system. The trade agreement reached in Geneva in May, which suspended tariffs and resumed rare earth and tech trade, has contributed to a reduced sense of urgency for immediate fiscal expansion.

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

VIET NAM
Viet Nam scraps two-child policy in response to falling fertility rates
(05 June 2025) On 05 June, Viet Nam’s National Assembly approved amendments removing the long-standing two-child policy in response to declining fertility rates and demographic pressures. The policy, introduced in 1988, had penalised Communist Party members with limited career advancement for having more than two children. Viet Nam’s birth rate has fallen below replacement level, from 2.11 in 2021 to 1.91 in 2024, with urban centres such as Ho Chi Minh City reporting a 2024 rate of 1.39 and a growing elderly population, now nearly 12%. The country’s working-age population is projected to peak in 2042, with an overall population decline likely by 2054. In December, Ho Chi Minh City began offering a USD 120 incentive to women who have two children before age 35. The government provides six months of paid maternity leave and free healthcare for children under six, with free public school tuition extending to the end of high school starting September. The Health Ministry also proposed increasing fines for sex-selective practices to USD 3,800, amid persistent gender imbalances in regions like the Red River Delta.

RCEP Monitor

CHINA
Exports rise 4.8% year-on-year in May 2025, below 5% forecast
(09 June 2025) China’s exports rose 4.8% year-on-year in May, below the 5% forecast and down from April’s 8.1%, while imports declined 3.4%, missing expectations and marking a second consecutive monthly contraction. Exports to the U.S. dropped 34.5%, accelerating from April’s 21% fall, and U.S. imports into China fell 18.1%. Exports to Europe and ASEAN increased over 10%. China’s overall trade surplus reached USD 103.2 billion, up from April’s USD 96.18 billion. Consumer prices declined 0.1% in May, the fourth straight month of deflation, with transportation fuel down 12.9% and food prices down 0.4%; core CPI rose 0.6%. Manufacturing activity contracted for the second consecutive month. Despite a 90-day truce agreed in Geneva, trade tensions persisted, with tariffs revised to 30% on Chinese exports to the U.S. and 10% on U.S. goods to China. President Trump and President Xi held a call agreeing to resume talks and ensure the flow of rare earth exports, while China’s Ministry of Commerce confirmed it is approving export licences for those materials. Senior U.S. officials, including Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, are meeting Chinese Vice Premier He Lifeng in London for further negotiations. Domestically, a weak property market and employment concerns continue to suppress consumption. Analysts expect additional fiscal support, with Nomura Securities projecting increased policy intervention in H2 to meet the 5% growth target.

JAPAN
Retail rice prices nearly double over the past year, prompting emergency stockpiles release
(12 June 2025) Japan’s retail rice prices nearly doubled over the past year due to a combination of supply chain disruptions, weather-related crop damage, panic-buying, and increased domestic and tourist demand, prompting the government to release emergency stockpiles in March. The average retail price fell to JPY 4,223 for 5kg in early June from a May peak of JPY 4,285. Farm Minister Shinjiro Koizumi has committed to accelerating price relief by distributing reserve rice directly to retailers, despite criticism over the quality of the “old” rice. Longstanding government policies, including the 1971 acreage reduction scheme that halved rice paddy land to below 1.4 million hectares by 2024, continue to affect supply. Although officially abolished in 2018, land-use incentives for alternative crops like soybeans persist. Structural issues in agriculture remain, with 80% of rice farmers operating part-time on under 2 hectares and relying on non-farming income, while contributing only 20% of total production. Industry figures argue that the acreage policy has undermined agricultural sustainability and advocate for export expansion and new farmer entry schemes. Public support for Prime Minister Shigeru Ishiba has reached its lowest since October, with inflation and rice prices cited as contributing factors. Ishiba told parliament that increasing production is under consideration but stressed the need to balance pricing with producer welfare and food security.

AUSTRALIA
Average price of Australian home reaches AUD 1 million for first time
(11 June 2025) The average price of an Australian home reached AUD 1,002,500 in the March 2025 quarter, marking the first time it has surpassed AUD 1 million, according to data from the Australian Bureau of Statistics (ABS). This represents a 0.7% increase from the previous quarter. New South Wales remains the most expensive state, with an average home price of AUD 1.2 million, followed by Queensland at AUD 945,000. Western Australia, South Australia, and Queensland were identified as the primary contributors to the national increase, though annual growth is slowing. The ABS figures reflect valuations across 11.3 million dwellings nationwide. The Australian Housing and Urban Research Institute attributed the milestone to long-term home price growth exceeding wage increases, affecting both low- and medium-income households. He highlighted insufficient housing supply, population growth, investor tax incentives, and underinvestment in social housing as key drivers. Rental shortages and limited social housing availability persist. Compared internationally, Australia’s average home price is nearly double that of the UK (AUD 560,000) and higher than Canada’s AUD 763,000. Prime Minister Anthony Albanese stated his government would reduce planning-related red tape for developers to help meet a target of building 1.2 million homes within five years.

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
China introduces multiple-entry “ASEAN visa” for ASEAN citizens
(04 June 2025) China has introduced a new multiple-entry “ASEAN visa” for business travellers from the 10 ASEAN member states and observer Timor-Leste, effective 03 June, according to China’s foreign ministry. The visa permits multiple entries over five years, with each stay lasting up to 180 days, and is also available to accompanying spouses and children. This new scheme supplements existing bilateral visa-free arrangements China holds with Singapore, Thailand, and Malaysia. The policy builds on the “Lancang-Mekong visa” launched in November 2024, which offers similar terms to business travellers from Cambodia, Laos, Myanmar, Thailand, and Viet Nam. Separately, from 01 June, China implemented a trial policy granting unilateral visa-free entry to citizens of Brazil, Argentina, Chile, Peru, and Uruguay, and has also extended visa-free access to all Gulf Cooperation Council countries. China received over 9 million foreign visitors in Q1 2025, up over 40% year-on-year. Chinese officials stated that these measures demonstrate China’s commitment to expanding high-level openness and improving policies to facilitate cross-border exchanges.

LAO PDR, THAILAND
Lao PDR eases restrictions on importing of animal products from Thailand
(04 June 2025) Lao PDR has eased restrictions on importing and transporting livestock and livestock products from Thailand following the containment of an anthrax outbreak in Don Tan District, Mukdahan Province. A letter from Lao PDR’s Ministry of Agriculture and Forestry dated 30 May confirmed the decision, allowing imports of cattle, buffalo, horses, pigs, sheep, and goats, particularly in border provinces. Laotian officials stated that imports must originate from disease-free areas and animals must be vaccinated against anthrax at least 20 days prior. Imports from or transiting through Mukdahan Province remain restricted for an additional 30 days, with a mandatory 21-day quarantine. Livestock transported through Lao PDR to third countries must not undergo vehicle changes or stops within Lao PDR. The decision signals increased confidence in Thailand’s disease control measures and supports ongoing efforts to maintain biosecurity standards in regional livestock trade.

MALAYSIA
Petronas to cut over 5,000 jobs, representing 10% of workforce
(05 June 2025) Petronas will cut over 5,000 jobs, representing approximately 10% of its workforce, as part of a company-wide restructuring to manage cost pressures from declining crude oil prices. The layoffs will be phased through 2025, and a hiring freeze will be in place until December 2026. Taufik cited narrowing margins and diminishing oil field yields as challenges to meeting dividend targets. The company’s financial outlook is under strain, with Brent oil prices at around USD 65 per barrel—below Petronas’ budget assumptions of USD 75–80. Petronas’ net income fell 32% in 2024, following a 21% decline in 2023. The decline in profitability and output also impacts Malaysia’s fiscal position, as Petronas contributed 10% of government revenue in 2024 through dividends and taxes used to fund national infrastructure, education, and social programmes.

THAILAND
Thailand records 14% year-on-year drop in foreign arrivals in May 2025
(05 June 2025) Thailand recorded a 14% year-on-year drop in foreign arrivals in May 2025 to 2.6 million, marking the fourth consecutive monthly decline and the longest downturn since 2021. The decrease is driven primarily by falling regional tourism, with Asian arrivals down nearly 11% year-to-date and Chinese tourist numbers falling 33%, amounting to nearly one million fewer visits compared to 2024. Contributing factors include safety concerns linked to scam operations near the Myanmar border, viral news of Chinese actor Wang Xing’s January kidnapping, and negative perceptions reinforced by recent earthquakes and global travel advisories. Arrivals from Malaysia, the second-largest source market, fell 17%, and flight bookings from China for June to August are down 15% year-on-year. Hotel occupancy dropped to 52% in May from 63% in April, with further declines expected as hotels reduce rates. Despite a 12% rise in U.S. tourist arrivals to over 625,000 and an 18% increase from Europe to over three million through May, officials are concerned about missing the 2025 target of 39 million visitors and USD 68 billion in spending. The Tourism Council and Thai Hotels Association have urged the government to step up safety assurances and diversify promotional efforts beyond China.

INDONESIA
Indonesia launches IDR 24.44 trillion stimulus package to support consumer spending
(05 June 2025) Indonesia has launched a IDR 24.44 trillion (USD 1.5 billion) stimulus package to support consumer spending amid slowing economic growth, which fell to 4.9% in Q1 2025—the weakest in over three years. The package, announced by the Finance Minister, includes two months of wage subsidies, transportation and toll discounts, and expanded social aid aimed at sustaining near-5% GDP growth during the school holidays. The stimulus follows declining indicators such as weakened purchasing power, retail, and auto sales, and coincides with falling commodity prices and trade tensions. Indonesia, which faces a paused 32% US tariff, is negotiating tariff reductions with Washington and has pledged to purchase more American goods. Growth targets are further pressured by reduced infrastructure spending as President Prabowo Subianto redirects funds to his USD 28 billion annual free meals programme, which aims to reach over 82 million children and pregnant women daily. Bank Indonesia has cut interest rates by 50 basis points in 2025, bringing the policy rate to 5.5%, with further reductions expected. The central bank’s GDP forecast stands at 4.6–5.4%, while Bank of America estimates growth will slow to 4.7–4.8% in Q2 and Q3. Economists expect the fiscal stimulus to have only moderate effects on overall demand, citing weak consumer sentiment and job market concerns, and argue that more aggressive policy support may be necessary.

VIET NAM
US places pressure on Viet Nam to reduce dependence on Chinese materials
(03 June 2025) At the end of May, the US delivered a detailed annex of tariff negotiation demands to Viet Nam, requesting that Viet Nam-based manufacturers reduce dependence on Chinese materials and enhance production and supply chain transparency, according to individuals familiar with the talks. The request follows a second round of negotiations aimed at averting proposed 46% reciprocal tariffs on Vietnamese imports. The demands, described as “tough” and “difficult,” are part of a broader US push to realign global supply chains away from China. Viet Nam’s economy, heavily reliant on China for intermediate goods, could face structural challenges if these changes are implemented. While Hanoi has addressed concerns over Chinese transshipments and has committed to buying US goods, including planes, farm products, and energy via non-binding agreements, US officials are pressing for legally binding contracts. In 2024, Viet Nam’s exports to the US and imports from China each reached approximately USD 140 billion, highlighting the intertwined trade flows. Despite crackdowns on transshipment, both trade figures hit record highs in April. It remains unclear how Vietnam will respond by the Wednesday deadline reportedly set by Washington, or whether it will present a counterproposal.

THE PHILIPPINES
The Philippines’ unemployment rate increases to 4.1% in April 2025
(06 June 2025) The Philippines’ unemployment rate increased to 4.1% in April 2025 from 3.9% in March, with the number of unemployed individuals rising slightly to 2.06 million from 2.04 million year-on-year, according to the Philippine Statistics Authority. Despite this increase, the Undersecretary of the Department of Economy, Planning, and Development stated that the labour market remains resilient and within the government’s target unemployment range of 4.4% to 4.7% under the Philippine Development Plan 2023–2028. Separately, the country’s gross international reserves rose marginally to USD 105.5 billion at the end of May from USD 105.3 billion in April, according to preliminary data from the central bank. These reserves are equivalent to 7.3 months of import coverage, which the central bank described as robust.

RCEP Monitor

SOUTH KOREA
Newly-elected president Lee Jae-myung reaffirm US alliance while criticizing protectionism
(04 June 2025) Following Lee Jae-myung’s presidential election victory in South Korea, the U.S. State Department reaffirmed its “ironclad commitment” to the alliance and trilateral cooperation with Japan. In his inauguration speech, Lee underscored the importance of the alliance while referencing rising protectionism and shifts in the international order. The current 90-day pause on Donald Trump’s “Liberation Day” tariffs ends 08 July, with the U.S. requesting trade proposals by 05 June. South Korea’s exports to the U.S. fell 8.1% year-on-year in May, driven by declining automobile shipments, while a new 25% U.S. tariff on all foreign-made vehicles is raising concern in Korea’s auto sector, which accounts for over 10% of exports. South Korea’s policymaking capacity was limited under interim leadership until Lee’s election, and the former Finance Minister had stated in April that a policy package for U.S. trade talks was targeted for July. Lee has not outlined specific trade strategies but campaigned on pragmatic diplomacy and the pursuit of new export markets. He has maintained a non-confrontational stance towards the U.S., despite his progressive background, which traditionally opposes a strong U.S. military presence. In defence policy, Lee supports alliance continuity while signalling openness to North Korea dialogue.

JAPAN
Ministry of Finance expected to adjust debt issuance strategy due to historically high yields
(06 June 2025) Market expectations are rising that Japan’s Ministry of Finance (MOF) will adjust its debt issuance strategy by July, shifting towards increased sales of short-term securities and reducing issuance of super-long bonds to contain yields now at historic highs. This follows a weak 30-year bond auction on Thursday, which recorded the lowest demand ratio since 2023, despite a subsequent decline in yields. The 30-year yield dropped to 2.88% from a May peak of 3.185%, while the 40-year and 20-year yields declined to 3.055% and 2.335%, respectively. Investor sentiment was buoyed by speculation that the MOF may cut issuance, particularly after the ministry circulated a market questionnaire and scheduled a 20 June meeting with primary dealers. Resona Asset Management and JPMorgan Securities Japan forecast super-long bond issuance reductions of JPY 250 billion to JPY 450 billion per month, with a cut below JPY 300 billion likely to disappoint investors. HSBC suggested the Bank of Japan may reduce purchases of bonds with maturities of 10 years and below while maintaining or increasing support for the super-long end. The upcoming MOF decision coincides with the BOJ’s 16–17 June policy meeting and ongoing global concerns about rising borrowing costs and fiscal deficits.

JAPAN
Tax-free sales at Japanese department stores decline 26.7% year-on-year in April 2025
(04 June 2025) Tax-free sales at Japanese department stores declined 26.7% year-on-year in April to JPY 43.9 billion, with the trend continuing into May, according to the Japan Department Stores Association and three major retailers, despite a 28.5% increase in visitor numbers to a record 3.9 million and a 3.1% rise in tax-free shoppers to 521,000. The average tax-free spend per customer dropped 28.9% to JPY 84,000, driven by reduced demand for luxury goods such as handbags and watches, impacted by last year’s price hikes, a stronger yen, and geopolitical uncertainty. Isetan Mitsukoshi, Daimaru Matsuzakaya, and Takashimaya are forecasting annual declines in foreign visitor sales of 2%, 3%, and 5%, respectively. Sales of luxury goods fell 32.4% in April, while tax-free sales of consumables such as cosmetics and food rose 15.6%. Takashimaya reported double-digit growth in categories including sporting goods and clothing, while Daimaru Matsuzakaya cited strong sales at its Umeda store due to demand for Japan-specific branded content. Although current tax-free sales exceed 2019 pre-pandemic levels, department stores are adjusting forecasts and strategies.

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

FRANCE, ASEAN
French President Emmanuel Macron on official tour of Southeast Asia
(27 May 2025) French President Emmanuel Macron has announced EUR 9 billion in commercial deals and new defence cooperation initiatives during a visit to Viet Nam, as part of a broader tour aimed at strengthening EU ties with Southeast Asia amid escalating US-China tensions. Macron will next visit Indonesia and Singapore, where he will deliver a keynote at the Shangri-La Dialogue. His trip coincides with intensified EU efforts to diversify supply chains and expand trade, including ongoing talks with Malaysia, Indonesia and Thailand, efforts to revive negotiations with Australia, and a push to finalise a broad agreement with India by year-end. Southeast Asian nations, wary of US tariffs and a flood of cheap Chinese exports, are increasingly viewing Europe as a stabilising counterbalance, though limited in strategic capacity. Macron’s agenda includes highlighting the global implications of the Ukraine war, especially concerning China and North Korea’s support for Russia, which has unsettled officials in Seoul and Tokyo. The EU is also exploring ties with the CPTPP trade bloc and holding informal discussions with South Korea and Japan on Trump-era trade dynamics. Trump’s recent tariff threats against the EU—potentially rising to 50 percent by July—have further prompted Southeast Asian countries to monitor EU-US trade negotiations closely. Macron’s Indo-Pacific strategy, supported by joint military activities with regional partners, seeks to counter perceptions of Europe’s limited strategic relevance, despite internal EU debates over prioritising commitments in Asia versus challenges closer to home.

ASEAN, GCC
ASEAN to initiate FTA negotiations with Gulf Cooperation Council (GCC)
(27 May 2025) Prime Minister Datuk Seri Anwar Ibrahim confirmed that ASEAN will initiate free trade agreement (FTA) negotiations with the Gulf Cooperation Council (GCC), following discussions at the 2nd ASEAN-GCC Summit in Kuala Lumpur. The announcement builds on earlier talks held in Riyadh two years prior. Kuwait’s Crown Prince Sheikh Sabah Khaled Al-Hamad Al-Sabah, representing the current GCC Supreme Council, stated that GCC is ASEAN’s seventh-largest trading partner, with bilateral trade reaching USD 130.7 billion in 2023 and a target of USD 180 billion by 2032. The Crown Prince also noted increased foreign investment flows into Asia as an indicator of long-term integration. Malaysia signed a joint statement on Monday to begin bilateral negotiations for a Malaysia-GCC FTA (MGFTA). Malaysian Investment, Trade and Industry Minister Tengku Zafrul Aziz said the MGFTA aims to reduce tariffs and non-tariff barriers, enhance business mobility, and strengthen regulatory cooperation. He projected further growth beyond the current USD 22 billion in trade between Malaysia and the GCC.

MALAYSIA, JAPAN
Malaysia secures MYR 4.68 billion in potential investment leads from Japan at Osaka Expo 
(03 June 2025) Malaysia has secured MYR 4.68 billion in potential investment leads from Japan following a recent investment mission linked to Expo 2025 Osaka, representing approximately 57% of the MYR 7.39 billion in total potential investments related to Malaysia’s expo presence to date, according to the Malaysian Investment Development Authority (Mida). Engagements took place in Kyoto, Kobe, Osaka, and Tokyo, involving one-on-one meetings and a seminar focused on green and high-value sectors. The CEO of Malaysian Investment Development Authority (MIDA) stated that the agency would continue to facilitate investments aligned with national goals in clean energy, innovation, and sustainability. Malaysia’s Investment, Trade and Industry Deputy Minister, officiating the Malaysia Pavilion, emphasised the expo’s role in showcasing Malaysia’s innovation and sustainability credentials. A key outcome was the signing of a memorandum of understanding between Sarawak Energy Bhd and the Japan Bank for International Cooperation to advance clean energy cooperation. The Malaysia Pavilion is scheduled to host over 150 business engagements during the six-month expo and contributes to the government’s target of generating MYR 13 billion in combined investment and trade outcomes.

INDONESIA
Trade surplus narrows to USD 159 million in April 2025, smallest since October 2019
(02 June 2025) Indonesia’s trade surplus narrowed sharply to USD 159 million in April 2025, its smallest since October 2019 and well below the USD 2.8 billion median forecast in a Bloomberg analyst survey, as imports surged by 22% year-on-year to USD 20.59 billion, driven by capital goods, raw materials and consumer goods. Exports increased by 5.8% to USD 20.76 billion, with gains in coffee and basic metals partially offsetting a 21% decline in mining exports, notably coal. Imports from China rose 54% year-on-year, with key items including mechanical and electrical machinery, vehicles and parts; imports from Japan and Singapore also increased. The import rebound reflects pre-emptive restocking in anticipation of rising global trade risks, including upcoming US tariff increases on steel in June and the expiry of tariff reprieves in July. The continued import surge and weaker mining exports could maintain pressure on the trade balance and affect the current account, though it is noted that low oil prices and stable services should mitigate the impact. Indonesia has generally posted trade surpluses above USD 1 billion in recent years, with the last deficit recorded in April 2020.

CAMBODIA
Public debt stock reaches USD 12.18 billion as of end-Q1 2025
(01 June 2025) Cambodia’s public debt stock reached USD 12.18 billion at the end of Q1 2025, a 1.24% increase from USD 12.03 billion at end-2024, with 99% (USD 12.06 billion) comprising external debt and 1% (USD 118.33 million) domestic debt, according to the Ministry of Economy and Finance’s Public Debt Statistical Bulletin. Debt composition included 48% in USD, 18% in SDR, 11% in JPY, 10% in CNY, 8% in EUR, and 5% in local and other currencies. In Q1 2025, Cambodia signed USD 78.81 million in new concessional loans, representing 3% of the legally permitted ceiling, with an average grant element of approximately 50%. Debt service payments totalled USD 237.8 million during the same period. Cambodia’s Deputy Prime Minister and Finance Minister stated that all loans were directed toward public investment in priority sectors aimed at long-term economic productivity. Cambodia’s total public debt stood at 18.4% of GDP, significantly below the 40% threshold, and was assessed as “sustainable” and at “low risk” of distress.

VIET NAM, UNITED STATES
Viet Nam to purchase USD 2 billion worth of agricultural products from United States
(03 June 2025) Vietnamese companies will sign memorandums of understanding with US partners to purchase USD 2 billion worth of American agricultural products, according to Vietnam’s agriculture ministry. The agreements, signed during a US visit led by Agriculture Minister Do Duc Duy and a 50-company delegation, include five MoUs covering USD 800 million of corn, wheat, dried distillers grains, and soybean meal from Iowa over three years. These deals form part of ongoing negotiations with the Trump administration to reach a new trade agreement aimed at reducing the USD 123 billion US trade deficit with Viet Nam. Reciprocal tariffs of 46% imposed by the US have been paused until July but remain a threat to Viet Nam’s export-driven economy. In 2023, Vietnam imported USD 3.4 billion of US farm goods and exported USD 13.68 billion in agricultural products to the US. Additional Vietnamese commitments include purchases of Boeing aircraft, liquefied natural gas, and enforcement actions against counterfeit goods and digital piracy, in response to US concerns.

VIET NAM
Vietnamese conglomerates bid for construction of USD 67 billion North–South high-speed railway project
(02 June 2025)  Vingroup and Truong Hai Group Corporation (Thaco), two of Vietnam’s largest conglomerates, have submitted competing bids to lead the USD 67 billion North–South high-speed railway project connecting Hanoi and Ho Chi Minh City. Vingroup, via its newly established subsidiary Vinspeed, has proposed completing the 1,500km rail line by December 2030, with plans to operate the route and develop real estate along it. Vingroup is seeking an unprecedented 35-year, zero-interest government loan covering 80% of the cost (approximately USD 49 billion), offering to fund the remaining 20% and claiming a potential USD 6 billion cost reduction through international technology partnerships. In contrast, Thaco has proposed funding 80% through domestic and international loans, requesting state guarantees and interest coverage for 30 years. Both bids require the government to manage land clearance. Concerns have been raised about moral hazard, cost control, safety, and public debt implications, with economist Do Thien Anh Tuan warning that full government backing could result in the project’s total cost becoming public debt. The government approved the project in November 2023, with renewed emphasis on private sector involvement amid regional infrastructure competition. Communist Party chief To Lam has publicly supported greater private sector roles, and analysts suggest a possible future collaboration between the rival bidders.

RCEP Monitor

AUSTRALIA
Australia announces 3.5% increase to Australia’s national minimum wage
(03 June 2025) The Fair Work Commission (FWC) has announced a 3.5% increase to Australia’s national minimum wage, raising it to AUD 24.94 per hour effective 1 July 2025, providing approximately AUD 1,670 more annually for full-time minimum wage workers. This adjustment affects around 2.6 million employees and constitutes a real wage increase amid declining inflation, with headline consumer price inflation at 2.4% in Q1 2025, within the Reserve Bank of Australia’s 2–3% target. The FWC President stated the increase is necessary to prevent the permanent erosion of real incomes among low-paid workers. The Australian Council of Trade Unions (ACTU) supported the decision, citing that minimum wage earners were disproportionately impacted by post-pandemic inflation. Last year’s minimum wage increase was 3.75%, broadly aligned with inflation at the time. The Reserve Bank recently reduced interest rates to a two-year low, citing easing domestic inflation and global risks, with the possibility of further cuts. The labour market remains steady with unemployment at 4.1% for over a year, bolstered by public sector hiring, and wage growth remains subdued, reducing inflationary concerns.

CHINA
Official manufacturing PMI rises slightly to 49.5 in May 2025  
(31 May 2025) China’s official manufacturing purchasing managers’ index (PMI) rose slightly to 49.5 in May from 49.0 in April but remained below the 50 threshold, indicating continued contraction for a second month. The new orders sub-index increased to 49.8, while the new export orders sub-index rose to 47.5, reflecting a partial rebound in trade activity, including with the United States. The non-manufacturing PMI edged down to 50.3 from 50.4. US President Donald Trump announced a doubling of global steel and aluminium tariffs to 50%, accusing China of breaching a bilateral tariff rollback agreement. Moody’s maintained a negative outlook on China, citing ongoing trade tensions and long-term credit risks, although it acknowledged improvements in state-owned enterprise and local government debt management. China’s central bank introduced interest rate cuts and liquidity injections earlier in the month, with further monetary and fiscal stimulus expected. Despite faster-than-expected GDP growth in Q1 and a 2025 target of around 5%, analysts warn that sustained tariff pressure could undermine momentum. The short-term rise in April exports was attributed to overseas buyers accelerating orders during the 90-day US-China tariff pause.

JAPAN
JPY 2.6 trillion 10-year bond auction sees highest bid-to-cover ratio since April 2024
(03 June 2024) Japan’s JPY 2.6 trillion 10-year bond auction saw the bid-to-cover ratio rise to 3.66, the highest since April 2024 and up from 2.54 last month, offering temporary support ahead of Thursday’s 30-year debt sale. Ten-year yields declined 2.5 basis points to 1.48%, and futures rose to 139.15. Demand was supported by the attractiveness of the 1.5% yield level, but investors remain cautious amid concerns about the upcoming 30-year auction, where yields reached 3.185% last month. Thirty-year yields rose 0.5 basis points to 2.935% on Tuesday. Uncertainty is driven by global concerns over growing budget deficits, reduced central bank bond purchases, and Japan’s shift toward a normalised yield environment. Bank of Japan Governor Kazuo Ueda signalled a continued reduction in bond purchases, which will be reviewed at the 16–17 June policy meeting. A government draft fiscal policy plan calls for increased domestic bond buying. Recent weak demand at 20- and 40-year auctions has heightened sensitivity in the super-long segment. The Ministry of Finance sent a market questionnaire last week, prompting speculation about potential adjustments to issuance. Former BOJ board member Makoto Sakurai suggested the pace of quarterly JPY 400 billion purchase reductions may soon pause. Market participants view the improved 10-year auction result as easing pressure on that segment, though risks persist for longer maturities.

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
Five of ASEAN’s six largest economies report slower year-on-year GDP growth 
(19 May 2025) In Q1 2025, five of Southeast Asia’s six largest economies—Thailand, Indonesia, Malaysia, Singapore, and Viet Nam—reported slower year-on-year GDP growth, with only the Philippines recording a marginal increase to 5.4% from 5.3%. Thailand’s GDP growth decelerated to 3.1%, impacted by weak domestic consumption and high household debt; durable goods expenditure fell 1.4%, with vehicle purchases down 2.0%. Indonesia posted its weakest growth since Q3 2021 at 4.87%, while Malaysia (4.4%), Singapore (3.8%, preliminary), and Viet Nam (6.93%) all declined from the previous quarter. The downturn precedes the full impact of new U.S. tariffs announced in April—ranging from 10% to 46% across the region—which have already prompted revisions in national growth forecasts: Singapore lowered its projection to 0–2%, and Thailand’s NESDC downgraded its 2025 outlook to 1.3–2.3%. Thailand’s Kasikorn Research Center now estimates 1.4% growth for the year, down from 2.4%. Central banks in the Philippines, Singapore and Thailand eased monetary policies in response, while Malaysia held its rate at 3%. U.S. tariff reductions to 10% for 90 days (excluding China) have provided limited relief amid continued uncertainty, with analysts warning of export contraction later in the year due to global economic slowdown and reduced investment.

ASEAN
Malaysian Prime Minister calls for unified response to US tariffs
(22 May 2025) Prime Minister Anwar Ibrahim has called for ASEAN to aggressively diversify export markets and demonstrate unified economic relevance during upcoming tariff negotiations with the US, ahead of a summit in Kuala Lumpur. US President Donald Trump’s proposed tariffs—up to 49% on ASEAN states—have already disrupted trade and prompted member states to seek bilateral deals with Washington, including commitments to buy more US goods and curb transshipments of Chinese exports. Anwar stated that bilateral talks do not contradict ASEAN’s goal of maintaining a collective negotiating stance and called for stronger coordination and shared red lines. ASEAN’s USD 3.8 trillion economy and 670 million consumer base remain key leverage points, though internal fragmentation continues to limit negotiating cohesion. Strategic proposals include joint development in electric vehicles, semiconductors, and critical minerals to build cost-intensive value chains. Premier Li Qiang of China and Gulf state leaders will also attend the summit. On Myanmar, Anwar reported that junta leader Min Aung Hlaing gave verbal assurances of a ceasefire and aid access following the 28 March earthquake, but ongoing aerial attacks and plans for a flawed December election persist. ASEAN has yet to lift its ban on junta officials and is unclear on their summit participation.

MALAYSIA, UNITED STATES
United States to “sympathetically” review Malaysia’s appeal against tariffs
(22 May 2025) Prime Minister Datuk Seri Anwar Ibrahim stated that the United States has agreed to “sympathetically” review Malaysia’s appeal to reduce its 24% export tariffs, originally imposed under former President Donald Trump, with the aim of eventually eliminating them. In return, Washington has requested that Malaysia address trade imbalances, reduce non-tariff barriers, and prevent the redirection of US technology. Anwar confirmed the US has not objected to Malaysia strengthening relations with China, including a recent state visit by President Xi Jinping in April during which 31 bilateral agreements were signed, just ahead of trade talks with US representatives. Anwar also affirmed Malaysia’s independent foreign policy amid geopolitical tensions. The clarification followed a government announcement regarding a proposed AI initiative using Huawei chips, later attributed to a private-sector initiative by the Ministry of Investment, Trade and Industry. As ASEAN chair for 2025, Malaysia is preparing to host a summit with China and Middle Eastern partners next week, with Chinese Premier Li Qiang expected to attend.

MALAYSIA, THAILAND
Malaysia and Thailand to enhance cross-border power interconnection infrastructure  
(22 May 2025) Malaysia and Thailand have agreed to upgrade their ageing cross-border power interconnection infrastructure, initially commissioned in the early 2000s, to improve reliability and support increasing integration of renewable energy. Malaysia’s Deputy Prime Minister stated that feasibility studies conducted by Tenaga Nasional Berhad (TNB) and the Electricity Generating Authority of Thailand (EGAT) have established a clear technical framework for the upgrade. The initiative aims to enhance secure electricity exchange and support the ASEAN Power Grid (APG) initiative. Malaysia also proposed purchasing up to 300 megawatts (MW) of firm electricity from Thailand to meet rising domestic demand and improve energy supply security. Malaysia indicated readiness to explore structured multilateral energy trading arrangements beyond traditional bilateral models. The proposals were discussed during the Malaysian Deputy Prime Minister’s official visit to Thailand, where he met with the Thai Deputy Prime Minister and Energy Minister and attended a briefing by Trans Thai-Malaysia, hosted by Petronas, to review operational developments and strategic direction.

THAILAND, UNITED STATES
Thailand aims to reduce trade deficit with United States by USD 15 billion
(23 May 2025) Thailand anticipates reducing its annual trade surplus with the United States by up to USD 15 billion, equivalent to approximately one-third of the USD 46 billion surplus recorded last year, through measures aimed at curbing the misuse of origin rules for exports, according to Thailand’s Deputy Prime Minister and Finance Minister. Speaking at the American Chamber of Commerce conference in Bangkok on 20 May, Pichai stated that the government is implementing anti-trade circumvention policies to support a long-term, balanced trade relationship with the U.S. Thailand has submitted a framework of proposals to the Trump administration to initiate formal negotiations and avoid a proposed 36% tariff on Thai exports, scheduled to take effect in early July. The proposals include actions against Chinese trade rerouting, reduction of tariff and non-tariff barriers, and increased Thai investment in the U.S. The President of the Thailand Trade Representatives indicated that Thai companies may soon invest at least USD 2 billion in the U.S. Additionally, Thailand has shown interest in participating in a major gas pipeline project in Alaska backed by President Trump.

INDONESIA
Indonesian rupiah remains outlier amongst strengthening Southeast Asian currencies
(23 May 2025) Southeast Asian currencies have rebounded following President Donald Trump’s 2 April tariff announcement, driven by US dollar weakness and expectations of rate cuts by the Federal Reserve; however, the Indonesian rupiah remains an outlier, reaching a record low of 16,970 per USD on 9 April and marking one of Asia’s worst-performing currencies year-to-date. Indonesia’s central bank intervened on 25 March, and capital outflows have continued, with non-residents selling USD 1.8 billion in stocks and bonds. The USD 16.9 billion 2024 trade surplus with the US is under pressure, particularly in palm oil, footwear, apparel, and electrical products, raising investor concerns over Indonesia’s growth outlook. Compounding external risks are domestic fiscal concerns under President Prabowo Subianto, whose increased social spending and controversial debt monetisation practices have raised questions about Bank Indonesia’s independence, with the central bank now holding 28% of outstanding government securities, up from 9% pre-pandemic. While current losses are milder than in 1998, potential competitive devaluation across Southeast Asia is a concern, though Indonesia’s relatively low manufacturing base limits regional spillover. Growth forecasts for 2025 have been revised down from 5.2% to 4.9%, but government-led social programmes may stabilise domestic demand. Long-term prospects hinge on structural reforms and private sector participation to boost productivity and investment.

VIET NAM
Viet Nam introduces new measures to strengthen rice exports through 2030
(23 May 2025) Vietnam’s Ministry of Industry and Trade (MoIT) has introduced a set of new measures aimed at strengthening rice exports through 2030, focusing on stricter regulatory oversight, accelerated implementation of the national export strategy, and expanded trade promotion. During a conference in Tien Giang, the MoIT’s Export-Import Department highlighted the need for expanded trade agreements, resolution of logistical bottlenecks, and value chain development among cooperatives and exporters. Enterprises were urged to invest in deep processing technologies to meet high-quality standards and diversify export markets to reduce reliance on traditional buyers. Tien Giang province, with 200 major milling and processing facilities producing three million tonnes of rice annually, was noted for its strategic location and infrastructure. The head of the provincial Department of Industry and Trade stressed the need for raw material zone development, factory upgrades, and enhanced brand identity. Vietnam exported over 3.43 million tonnes of rice in the first four months of 2025, earning nearly USD 1.8 billion—up 8.1% in volume but down 13.3% in value year-on-year, due to a 19.8% drop in average price to USD 515 per tonne. The Philippines remained the top buyer, accounting for 43.3% of volume and 45.5% of value.

RCEP Monitor

NEW ZEALAND
Revised “golden visa” programme receives 65 new applications within six weeks of implementation 
(21 May 2025) New Zealand’s revised “golden visa” programme has received 65 new applications within six weeks of its April implementation, alongside 39 rolled-over applications, with 42 approvals to date, representing a minimum investment of NZD 620 million. The updated scheme, introduced by Prime Minister Christopher Luxon’s government, reduced the investment threshold for “growth” visas to NZD 5 million, removed English-language requirements, shortened the minimum residency requirement to 21 days, and accelerated application processing to 11 days on average. A higher-tier “balanced” visa, requiring NZD 10 million, permits investments in bonds, equities, and property development and includes family residency. Of the new applications, 55 originated from the US, with others from Hong Kong (15) and China (12). A former immigration minister attributed the spike in US interest to political uncertainty surrounding a potential Trump re-election and noted that New Zealand had benefited from the curtailment of golden visa schemes in the EU. From 2022 to 2025, only 115 applications had been submitted under the prior regime, with 46 approvals. Luxon’s administration is reversing several prior policies, including restrictions on foreign investment, aiming to stimulate an economy that grew just 0.7% in Q4 2024.

JAPAN
CPI rises 3.5% year-on-year in April 2025, accelerating from March’s 3.2% 
(23 May 2025) Japan’s core Consumer Price Index (CPI) rose 3.5% year-on-year in April, surpassing the median market forecast of 3.4% and accelerating from March’s 3.2%, marking the fastest increase since January 2023 (4.2%). The measure excluding both fresh food and fuel, used by the Bank of Japan (BOJ) to assess demand-driven inflation, increased to 3.0% from 2.9% in March. These results keep core inflation above the BOJ’s 2% target for over three years. The primary inflation drivers remain elevated food costs. The BOJ, which raised short-term interest rates to 0.5% in January following the rollback of its ultra-loose monetary policy, faces challenges in determining further rate hikes. The central bank’s policy outlook is increasingly complicated by the external risks posed by US President Donald Trump’s tariff measures, which introduce uncertainty around global economic growth.

JAPAN
Inflation-adjusted real wages decline by 0.5% in fiscal year 2024
(22 May 2025) Japan’s inflation-adjusted real wages declined by 0.5% in fiscal 2024, marking the third consecutive annual decrease, despite nominal wages rising 3.0% to an average of JPY 349,388 per month—driven by the strongest wage growth in 33 years following the “shunto” spring negotiations and increases in minimum wages. However, this nominal growth was outpaced by a 3.5% rise in the consumer price index (excluding imputed rent), resulting in continued real wage contraction. A separate real wage index, calculated using CPI inclusive of imputed rent for international comparison, remained flat year-on-year, ending a three-year streak of negative growth. Food price increases and daily essentials continued to exert pressure on household purchasing power. The government recently set a target of 1% annual real wage growth through fiscal 2029, though its feasibility remains uncertain amid ongoing global economic risks linked to US President Donald Trump’s high tariff policy.

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

INDONESIA, AUSTRALIA
Australian Prime Minister visits Indonesia in first international visit since reelection  
(15 May 2025) On 15 May, Australian Prime Minister Anthony Albanese met with Indonesian President Prabowo Subianto in Jakarta to discuss defence cooperation, trade, and economic ties during his first international visit since re-election. Albanese emphasised Indonesia as an “indispensable partner,” reflecting Canberra’s priority on strengthening bilateral relations. Talks included reinforcing defence ties, following a previous agreement on maritime security, counter-terrorism, and disaster response. Indonesia committed to completing the ratification of the defence agreement and expressed interest in expanding cooperation in the sector. Discussions also covered trade, investment, food security, energy transition, and critical minerals, with Prabowo inviting Australia to increase its economic participation in Indonesia amid global economic uncertainty. Albanese highlighted Australia’s aim to deepen economic ties with Southeast Asia to diversify export markets and reduce reliance on China. Besides Indonesia, Albanese intends to visit Malaysia in late May to attend the ASEAN Summit. He will also likely visit Singapore this year to celebrate the 60th anniversary of Australia-Singapore diplomatic ties.

VIET NAM, THAILAND
Viet Nam and Thailand elevate relations to comprehensive strategic partnership 
(16 May 2025) Viet Nam and Thailand elevated their diplomatic relations to a comprehensive strategic partnership during Thai Prime Minister Paetongtarn Shinawatra’s visit to Hanoi, with an aim of boosting bilateral trade to USD 25 billion. Thailand remains Viet Nam’s largest trading partner in ASEAN, with 2024 trade reaching USD 20.2 billion, a 6% increase from the previous year. Thai companies have over 750 projects in Vietnam, totalling USD 14 billion in investments. In the first quarter of 2025, Thailand ranked 7th among foreign investors in Vietnam, with USD 436 million in pledged investments, nearly doubling last year’s total of USD 225 million. Defence and security cooperation has expanded, including naval and air force training and joint patrols. Both nations also committed to collaboration in logistics and supply chains, with Thailand exploring routes to transport goods to China through Vietnam.

INDONESIA
Export levy on crude palm oil increased from 7.5% to 10% 
(14 May 2025) Indonesia raised its export levy on crude palm oil from 7.5% to 10%, effective 17 May, to fund its biodiesel programme and replanting initiatives, according to a regulation issued by the finance ministry. Levies on other palm oil products also increased, including crude palm olein from 6% to 9.5%, refined bleached and deodorised palm olein from 4.5% to 7.5%, and biodiesel from 3% to 4.75%. Revenue from the levies will support Indonesia’s plantation fund management agency (BPDP), primarily funding the expanded biodiesel blending programme, which raised palm-based biodiesel content in gasoil to 40% in January. Only half of this year’s biodiesel allocation will be subsidised due to higher palm oil prices. The levy hike is anticipated to elevate palm oil prices as exporters pass on costs to buyers, who also face separate export taxes payable to Indonesia’s customs department.

THE PHILIPPINES
Philippine sovereign bonds expected to rally over coming months  
(15 May 2025) Philippine sovereign bonds are expected to rally in the coming months as slowing economic growth and easing inflation create conditions for potential interest-rate cuts. The yield on 10-year sovereign bonds, currently at 6.2%, may drop to 5.5% this year, which would create capital gains for bondholders. The central bank chief indicated that 75 basis points of rate cuts are possible in 2025 following weaker-than-expected first-quarter growth. An Asia sovereign strategist at Robeco stated that Bangko Sentral ng Pilipinas’s focus on easing monetary policy supports this outlook, with rice prices, accounting for 10% of the consumer price index, playing a significant role. Philippine local currency bonds have been among Asia’s top performers this month, benefiting from the nation’s lower exposure to global trade disruptions and a favourable US levy compared to regional peers. The peso has strengthened by 3.6% this year, enhancing bond attractiveness. A chief economist at Rizal Commercial noted that the combination of controlled inflation and a strong peso supports further bond market gains.

THE PHILIPPINES
The Philippines is exploring renewable energy exports to Taiwan and other countries
(15 May 2025) The Philippines is exploring renewable energy exports to Taiwan and other countries, leveraging anticipated surplus capacity. Discussions are ongoing between Manila and Taipei, with talks also involving Southeast Asian nations under the ASEAN power grid initiative. For non-ASEAN members like Taiwan, further regional frameworks would be required. The Philippines aims to raise the share of renewables in its energy mix to 35% by 2030 and 50% by 2040. Taiwan’s Economic Minister Kuo Jyh-huei stated that importing green energy from the Philippines could lower costs for Taiwanese manufacturers, maintaining prices below NTD 5 (USD 17 cents) per kWh. Additionally, the Philippines’ Department of Energy plans to award contracts for two gas exploration projects in the Sulu Sea and one in Palawan this year, while exploration for oil and gas continues in other regions amid stalled talks with China over joint development in the South China Sea.

MALAYSIA, SINGAPORE
Malaysia enhancing Malaysia My Second Home (MM2H) programme to attract Singaporeans   
(15 May 2025) Malaysia’s Tourism, Arts and Culture Ministry is enhancing its Malaysia My Second Home (MM2H) programme to improve transparency, simplify processes, and increase policy flexibility. The revamped programme now includes Platinum, Gold, and Silver tiers aimed at high-net-worth individuals, families, retirees, and digital nomads, offering benefits such as premium living, quality healthcare, education, safety, and ASEAN connectivity. During his working visit, the government launched the “Maybank Premier MM2H – Your Gateway to Malaysia” event in collaboration with Maybank Singapore, encouraging Singaporeans to consider Malaysia as a strategic base due to its cost-effective living, infrastructure, and regional market access. The event saw over 200 participants, reflecting strong interest in MM2H among Singaporeans. In 2024, Malaysia recorded 18.86 million visitors from Singapore, a 27.2% increase from 2023, with tourism receipts rising 29.5% to RM27.94 billion. Singapore ranked third in MM2H applications in Q1 2025, behind Taiwan and China. The collaboration with Maybank Singapore aims to provide seamless financial advisory services and onboarding support for Singaporean participants exploring MM2H.

MALAYSIA
Economy grows by 4.4% in Q1 2025, driven by household spending and export growth   
(16 May 2025) Malaysia’s economy grew by 4.4% in Q1 2025, driven by sustained household spending, a 9.7% increase in overall investment, and continued export growth supported by electrical and electronic products and tourism, despite a decline in mining exports. This matches the projection made by the statistics department in April and is an improvement from the 4.2% growth in Q1 2024. However, Bank Negara Malaysia warned that tariffs introduced by US President Donald Trump are expected to negatively impact Malaysian exports, potentially pushing economic growth below the initial 2025 forecast of 4.5% to 5.5%, with a revised forecast to be released soon. They noted that 32% of Malaysia’s exports to the US, including semiconductors, are tariff-exempt, and Malaysia’s exports are generally inelastic. Headline inflation eased to 1.5% in Q1 2025, while core inflation rose slightly to 1.9%. The ringgit appreciated by 0.8% against the US dollar, with a 0.01% increase in its nominal effective exchange rate.

RCEP Monitor

JAPAN
Yields in Japan’s USD 7.8 trillion government debt market surge rapidly  
(16 May 2025) Yields in Japan’s USD 7.8 trillion government debt market have surged rapidly, with 30-year yields nearing record highs and doubling the benchmark 10-year rate, signalling a significant shift driven by the Bank of Japan’s (BOJ) reduced bond purchases and subdued demand from local life insurers. The steepening yield curve has broad implications for monetary and fiscal policy, raising borrowing costs for the government, which holds the largest debt load among major economies, and increasing potential costs for corporate loans and mortgages. The BOJ is expected to address its bond-purchasing strategy on 17 June, amid pressures to control inflation without stalling economic growth. Prime Minister Shigeru Ishiba faces challenges in balancing fiscal policy ahead of Upper House elections and long-term defence spending. Key strategists highlight market concerns over inflation expectations and fiscal sustainability. Super-long yields, such as the 40-year rate now at a record 3.47%, are attracting foreign investors like Vanguard and RBC BlueBay, though their market share remains small. The spread between Japan’s 10- and 30-year bond yields has widened by 50 basis points since April, outpacing other major markets. Despite some views that super-long yields may stabilise, a shortfall in demand persists, with foreign investments unable to fully compensate for domestic insurer inactivity. Net supply has been concentrated in longer maturities, sustaining upward pressure. Analysts indicate the BOJ’s challenge lies in managing long-term rates without destabilising the broader economy.

NEW ZEALAND
Government to allocate additional NZD 577 million to expand movie production incentives scheme
(16 May 2025)  New Zealand will allocate an additional NZD 577 million (USD 339 million) in its upcoming federal budget to expand the International Screen Production Rebate scheme, following U.S. President Donald Trump’s announcement of 100% tariffs on films produced outside the United States. The rebate programme, established in 2014, provides a 20% cash rebate for production costs exceeding NZD 15 million for feature films and NZD 4 million for television shows. New Zealand’s Finance Minister stated that the move aims to solidify New Zealand’s position as a prime location for international film productions, despite broader government spending cuts due to shrinking tax revenues. The country’s film sector employs approximately 24,000 people, contributing NZD 3.5 billion annually, with a third of its revenue stemming from U.S. projects. The Finance Minister acknowledged that Australia, Canada, and the United Kingdom offer more competitive incentives but emphasised the necessity of maintaining New Zealand’s scheme to secure offshore investment.

CHINA
Chinese property market showing signs of stabilisation due to low rates and affordable prices  
(12 May 2025) China’s property market is showing signs of stabilisation as low rates and affordable properties support prices and purchases, according to S&P Global Ratings, which projects a 1% drop in primary home prices and a 2% decline in primary sales volume for 2025, compared to a 17% sales drop in 2024. Government measures, including a quarter-point interest rate cut by the People’s Bank of China (PBOC), lowering the five-year rate for first-time homebuyers to 2.6%, are aimed at boosting buyer interest and completing stalled projects. The PBOC reported that CYN 6.7 trillion (USD 926 billion) in loans were approved for “white list” housing projects covering 16 million units. Inventory levels improved, with tier-one cities at 12.6 months and tier-two cities at 18.1 months as of January, down from 20-25 months in late 2024. March marked the 22nd consecutive monthly decline in new-home prices, though the rate of decline narrowed, with prices falling 0.1% from February and 5% year-over-year. Second-hand home prices also saw smaller drops, with a 0.2% monthly decline and 7.3% annual drop. A total of 24 cities reported month-to-month price increases for new homes, up from 18 in February. HSBC highlighted that low rates and improved affordability would further drive market stabilisation, with China Overseas Land & Investment issuing two tranches of onshore bonds with historically low coupons of 1.8% and 2.37% for five- and 10-year tenors. HSBC also noted a CYN 220 billion increase in the quarterly mortgage balance, signalling stronger credit flows into the property sector.

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

THAILAND, LAO PDR
Thailand confirms four cases of anthrax, Lao PDR bans animal imports from Thailand
(07 May 2025) The Provincial Public Health Office of Thailand’s northeastern province of Mukdahan confirmed a fourth case of anthrax in a recent outbreak, with one fatality reported so far. The three remaining patients remain hospitalised—two at Mukdahan Hospital and one at Don Tan Hospital. A Department of Disease Control spokesman linked the cases to an event last month in which cattle were slaughtered and the raw meat shared around the community.  Thai authorities had identified at least 638 people as being potentially exposed after eating the meat, with all at-risk people having completed a seven-day period of observation. The outbreak is concentrated in Don Tan district, classified as an outbreak zone, with health authorities focused on early detection. The provincial livestock office quarantined 124 animals for 30 days and administered antibiotics and vaccines to over 1,200 animals within a 5km radius. In neighboring Lao PDR, authorities have banned the import of all animals and animal products from Thailand. Lao authorities have also launched vaccination campaigns in high-risk areas.

MALAYSIA
Bank Negara Malaysia maintains overnight policy rate at 3.00% 
(08 May 2025) Bank Negara Malaysia (BNM) maintained its overnight policy rate (OPR) at 3.00%, unchanged since May 2023, aligning with expectations from 24 of 30 economists in a Reuters poll. Despite strong first-quarter performance, BNM indicated downside risks to economic growth due to global trade tensions and geopolitical uncertainties. Malaysia’s inflation fell to 1.4% in March, a four-year low, while first-quarter growth was recorded at 4.4%. BNM projected headline inflation to be between 2% and 3.5% in 2025 and core inflation between 1.5% and 2.5%, following 1.8% for both measures in 2024. Prime Minister Anwar Ibrahim noted that the suspension of most U.S. tariffs until July has mitigated economic impacts but acknowledged that Malaysia is unlikely to meet its 4.5% to 5.5% growth forecast for 2025. Malaysia faces a 24% tariff on exports to the U.S. from July unless negotiations succeed in lowering it. Other central banks in Asia, including those in Indonesia, Korea, Thailand, and the Philippines, have implemented multiple rate cuts to support growth.

INDONESIA
Indonesia’s Djarum Group launches first domestically assembled EVs 
(06 May 2025) Indonesian conglomerate Djarum Group, through its subsidiary Polytron, launched two domestically assembled electric vehicles (EVs), the Polytron G3 and G3+, becoming the first Indonesian conglomerate to do so. Prices range from IDR 299 million (USD 18,166) to IDR 459 million, with options for fixed or rented replaceable batteries. Polytron is offering a three-year buyback guarantee at 70% of the original price. The cars are assembled at Handal Indonesia Motor’s facility in Purwakarta, West Java, which also manufactures for BAIC, Chery, Geely, and NETA. Polytron plans to sell up to 1,500 units this year and expand to ASEAN markets, leveraging its 60 electronic dealerships and eight new showrooms in Java. Indonesia’s Industry Minister highlighted the local content level of 40% but noted challenges in expanding car ownership. Polytron also plans to develop its own manufacturing facility in Subang, West Java. Indonesia’s automotive market saw a decline to 865,000 cars in 2024 from over 1 million in 2023, while EV sales grew to over 44,000 units, up 160% from 2023.

SINGAPORE
Retail sales increases by 1.1% year-on-year in March 2025 
(05 May 2025) Singapore’s retail sales increased by 1.1% year-on-year in March, recovering from a 3.5% decline in February, according to the Singapore Department of Statistics. Excluding motor vehicles, retail sales rose 0.7%, reversing a 6.5% drop in the prior month. The total retail sales value reached USD 4.3 billion, with online sales contributing 13.4%, up from 12.3% in February. Watches and jewellery led growth with a 13.5% rise, followed by cosmetics, toiletries, and medical goods at 3.6%, and supermarkets and hypermarkets at 3.4%. Conversely, petrol service stations and wearing apparel and footwear experienced declines of 8.2% and 8%, respectively. Food and beverage sales fell 2.8% year-on-year and 3.2% on a seasonally adjusted basis, with a total sales value of USD 60 million, of which 24.9% came from online sales. Restaurant sales dropped 6.6%, while food caterers saw a 19.6% increase. DBS Bank noted mixed performance across the 14 major categories and warned of potential downside risks due to global trade tensions affecting business hiring and wage growth, potentially impacting retail sales in the second half of 2025.

INDONESIA
Economy grows by 4.87% year-on-year in Q1 2025, slowest pace since Q3 2021 
(05 Mat 2025) Indonesia’s economy grew 4.87% year-on-year in Q1 2025, its slowest pace since Q3 2021, down from 5.02% in the previous quarter, aligning with analysts’ expectations of 4.91% growth. President Prabowo Subianto aims to lift GDP growth to 8% during his term, but faces challenges from global trade tensions, weakening domestic demand, and budget constraints. U.S.-bound exports may be impacted by upcoming tariffs, with Jakarta seeking negotiations to avoid them. Maybank Indonesia highlighted global trade tensions as a key risk, while Bank Danamon projected further deceleration to 4.79% in Q2 but maintained a 4.8% full-year forecast. Indonesia’s Q1 GDP contracted 0.98% quarter-on-quarter, and household spending, comprising over half of GDP, grew 4.89%, its slowest in five quarters, with weak footwear sales despite Ramadan. Investment growth slowed to 2.12%, the lowest in two years, and government spending contracted, although net export contributions rose due to slower imports. Indonesian authorities noted that Indonesia’s growth remained above the G20 average and expected government spending to drive momentum.

THE PHILIPPINES
Bangko Sentral ng Pilipinas unlikely to intervene to cap strengthening of peso
(07 May 2025) Philippine central bank Governor Eli Remolona indicated that Bangko Sentral ng Pilipinas (BSP) is unlikely to intervene to cap the strengthening of the peso, attributing its rise to broader dollar weakness. The peso reached its highest level since March 2024, driven by optimism over trade deals. Remolona stated that intervening would counter prevailing market conditions. BSP’s stance contrasts with central banks in Taiwan and Hong Kong, which have acted to moderate their currencies’ appreciation.

VIET NAM
Viet Nam introduces 10-year golden visa programme aimed to individuals contributing to tourism, innovation, or economy 
(08 May 2025) Vietnam introduced a 10-year golden visa programme aimed at enhancing its position as a sustainable travel and investment hub in Southeast Asia. The visa offers long-term, renewable residency to individuals contributing to tourism, innovation, or the economy, with a particular focus on attracting Indian nationals. Visa procedures for tourism and short-term business travel have been streamlined, reducing the need for embassy visits. In the first four months of the year, Vietnam recorded 7.67 million foreign visitors, a 23.8% increase year-on-year, according to the Vietnam National Authority of Tourism. China led with 1.95 million visitors, followed by South Korea (1.58 million), Taiwan (440,000), and the United States (323,000). European markets showed steady growth, with notable increases from Italy (32.6%), France (24.7%), and the UK (20.7%). The Vietnam National Authority of Tourism plans to launch seven promotional campaigns targeting 22 to 23 million international arrivals by year-end. Major cities like Ho Chi Minh City, Hanoi, and Da Nang are highlighted for their safety, affordability, and availability of international amenities.

RCEP Monitor

AUSTRALIA
Newly reelected Prime Minister Anthony Albanese announces visits to Malaysia, Indonesia, and Canada
(05 May 2025) Australian Prime Minister Anthony Albanese, following his re-election, announced upcoming diplomatic visits to Malaysia, Indonesia, and Canada. His first visit will be to Indonesia, continuing discussions with President Prabowo Subianto. He also accepted an invitation from Canadian Prime Minister Marc Carney to attend the G7 Summit in Alberta this June, which may include a meeting with US President Donald Trump, following a recent phone call discussing US-imposed tariffs. Albanese is scheduled to attend the ASEAN Summit in Kuala Lumpur on 26-27 May and will visit Papua New Guinea in September for its 50th Independence anniversary. In the recent elections, the ruling Labor Party secured 87 of 150 seats in the House of Representatives, enabling Albanese to form a new government. Opposition leader Peter Dutton conceded defeat and congratulated Albanese.

JAPAN
Government rejects proposal to reduce consumption tax rate 
(09 May 2025) Japan’s government rejected the proposal to reduce the consumption tax rate despite inflation and U.S. tariffs, with the Chief Cabinet Secretary stating that it would be “inappropriate” due to its role in funding social security. Prime Minister Shigeru Ishiba also expressed caution, highlighting the need for discussions with the Komeito party, which is advocating for a tax cut on food items ahead of the House of Councillors election. The consumption tax currently stands at 8% for food and beverages and 10% for other items. The Constitutional Democratic Party of Japan (CDPJ) has called for a one-year removal of the tax on food items, while CDPJ chief Yoshihiko Noda questioned the government’s reluctance to implement relief measures. Within the ruling Liberal Democratic Party (LDP), some lawmakers are pushing for permanent tax exemptions on food and beverages. Japan’s fiscal health remains the weakest among advanced economies, with approximately one-third of its annual budget allocated to social security costs. The consumption tax was last raised from 8% to 10% in 2019, with the additional revenue committed to social security funding. The government and LDP plan to draft an economic package ahead of the upper house election.

CHINA, ASEAN
Exports increase by 8.1% year-on-year in April 2025
(08 May 2025) China’s exports increased by 8.1% in April year-on-year, surpassing Reuters’ poll expectations of 1.9%, driven by a 20.8% surge in shipments to the Association of Southeast Asian Nations (ASEAN) and an 8.3% rise to the European Union. Exports to Vietnam and Malaysia were strong, while Indonesia and Thailand saw 37% and 28% growth, respectively. In contrast, shipments to the U.S. fell by over 21%, with imports dropping nearly 14%, impacted by tariffs of 145% imposed by the U.S., to which China responded with 125% tariffs on American imports. Chinese factory activity hit a 16-month low in April, with new export orders declining, raising concerns over job losses, with Goldman Sachs estimating 16 million job losses in sectors tied to U.S.-bound exports. To counter these effects, Chinese authorities have increased stimulus measures, including easing monetary policy. Local governments and businesses are supporting exporters in redirecting products to the domestic market, potentially increasing deflationary pressure. China is set to release inflation data, with forecasts suggesting a 0.1% drop in the consumer price index and a 2.8% decline in the producer price index.

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.

JAPAN, ASEAN
Japanese Prime Minister Shigeru Ishiba visits Viet Nam and the Philippines 
(01 May 2025) Japanese Prime Minister Shigeru Ishiba’s visit to Viet Nam and the Philippines this week focused on strengthening political, economic, and security ties amid heightened regional tensions with China. In Hanoi, Ishiba and Vietnamese Prime Minister Pham Minh Chinh agreed to deepen bilateral trade and uphold global trade rules, while Vietnam’s top leader To Lam urged Japan to increase infrastructure investment. In Manila, Ishiba and President Ferdinand Marcos Jr launched talks on an intelligence-sharing deal and a defence pact to facilitate joint military exercises. Both leaders reaffirmed opposition to coercive changes in the East and South China Seas and agreed to negotiate an Acquisition and Cross-Servicing Agreement (ACSA) to improve economic collaboration and supply chain resilience. The visit follows Chinese President Xi Jinping’s recent Southeast Asia tour and the signing of over 100 cooperation documents. Analysts noted Japan’s aim to reinforce regional partnerships independently of the US, especially via frameworks like the CPTPP and the Official Security Assistance (OSA) programme. Agreements with Viet Nam currently cover AI, disaster risk reduction, and green transitions. Commentators emphasised Japan’s strategy to be seen as a reliable partner that respects regional autonomy, contrasting it with perceived US disengagement, including its 2017 TPP withdrawal and aid programme reductions.

ASEAN
ASEAN Member States advance discussions on incorporating civil nuclear energy  
(01 May 2025) ASEAN member states, including Malaysia, Indonesia, Viet Nam, the Philippines, Thailand, Cambodia, and Singapore, are advancing discussions on incorporating civil nuclear energy (CNE) into regional energy strategies as part of the ASEAN Plan of Action for Energy Cooperation (APAEC) 2026–2030. During the 15th Nuclear Energy Cooperation Sub-Sector Network Meeting held from 28–30 April 2025 in Kuala Lumpur, chaired by the Philippines and supported by the ASEAN Centre for Energy, representatives reviewed strategic focus areas and potential CNE activities for inclusion in the APAEC roadmap. These proposals will be presented for consideration at the ASEAN Senior Officials’ Meeting on Energy in June 2025 in Kuching, Sarawak. The meeting also involved discussions with external partners including the Korea Nuclear Association, Japan Atomic Energy Agency, ASEAN Business Council, Global Centre for Nuclear Energy Partnership, and others, to support the development of nuclear energy infrastructure and nonproliferation frameworks in the region. Timor-Leste participated as an observer. The initiative reflects a coordinated regional approach to explore nuclear power as a stable and low-carbon energy source within ASEAN’s energy transition strategy. 

INDONESIA
Food self-sufficiency goals prompts significant agricultural expansion into regions such as Papua 
(02 May 2025) President Prabowo Subianto’s plan to achieve food self-sufficiency in Indonesia has prompted significant agricultural expansion into regions such as Papua, where a food estate programme is set to cover over 3 million hectares, including projects in Merauke that have already cleared 11,000 hectares. These developments are linked to Prabowo’s wider strategy, which includes reducing food imports, boosting rice exports, and supporting a free meal programme for nearly 83 million beneficiaries. The government claims environmental mitigation will include the reforestation of 6.5 million hectares, though experts caution that replanting cannot replace the ecological value of original forests. Concerns from environmental and Indigenous rights groups focus on deforestation, carbon emissions, and the loss of Indigenous land, with at least 10 private firms holding sugar cane plantation permits in Merauke, each covering 30,000 to 66,000 hectares. The Celios think tank estimates that clearing 2 million hectares could emit over 780 million tonnes of CO₂, jeopardising Indonesia’s net-zero 2050 target. Analysts argue that achieving food security also requires systemic improvements in agricultural infrastructure, research, and political commitment, beyond land acquisition.

INDONESIA
Indonesia secures USD 60 million investment into 92 megawatt solar plant 
(02 May 2025) Standard Chartered, DEG (Germany’s development finance institution), and France’s Proparco have announced a USD 60 million investment in the 92 megawatt-peak Saguling floating solar PV plant in West Java, Indonesia, which will be operated by Saudi Arabia’s ACWA Power and PLN Indonesia Power, with operations expected to begin in 2026. The project, projected to offset over 63,000 tonnes of CO₂ emissions annually, represents the first project-level financing under Indonesia’s Just Energy Transition Partnership (JETP) since the United States formally exited the initiative, despite having pledged over USD 2 billion in loans, guarantees, and grants. France has committed more than EUR 450 million (approximately USD 513 million) to Indonesia’s energy transition through JETP, while Indonesia now relies on Germany and Japan, the new JETP co-leads, to maintain momentum. The JETP’s initial USD 21.6 billion pledge is split between USD 11.6 billion from public sector donors including the EU, UK, Canada, and others, and the remainder from private entities coordinated by the Glasgow Financial Alliance for Net Zero (GFANZ), whose members include Standard Chartered, HSBC, and Deutsche Bank. The German Ambassador described the Saguling agreement as evidence of the maturing phase of JETP projects, signalling readiness for investment.

THE PHILIPPINES
Government infrastructure spending reaches PHP 148.3 billion in January–February 2025 period
(01 May 2025)  Government infrastructure spending in the Philippines reached PHP 148.3 billion (USD 2.6 billion) in January–February 2025, a 23.1% year-on-year increase driven by the Department of Public Works and Highways (DPWH), which completed carryover projects and emergency works, and accelerated right-of-way settlements and account processing. This contributed to a total capital outlay of PHP 187 billion, up 7% from the previous year. Direct payments from development partners, including the World Bank and Asian Development Bank, also supported the disbursements. However, the Department of Budget and Management (DBM) noted that election-related spending prohibitions are expected to temporarily slow infrastructure disbursements in April, although a rebound is anticipated in May–June post-election. Capital transfers to local government units (LGUs) declined by 28.8% to PHP 38.6 billion due to timing differences in national tax share releases. No equity was released to state-owned corporations during the period. The Marcos administration aims to raise infrastructure expenditure to PHP 2.1 trillion, or 5.8% of GDP, by 2028.

THAILAND
Thailand records investment applications totalling THB 431.20 billion in Q1 2025
(30 April 2025) Thailand recorded investment applications totalling THB 431.20 billion (MYR 55.60 billion) in Q1 2025, a 97% year-on-year increase, driven by large infrastructure projects and a fivefold rise in digital sector investments, particularly data centres. The Thailand Board of Investment (BOI) reported 822 project applications, up 20% from Q1 2024, of which 618 were submitted by foreign investors. Foreign direct investment (FDI) applications amounted to THB 267.70 billion, up 62% from the previous year. Hong Kong led FDI inflows with THB 135.16 billion, including THB 72.70 billion in the digital sector. China followed with THB 47.30 billion , mainly in metal, electronics, and automotive projects; Singapore with THB 38.10 billion in electrical, electronics, and digital; Japan with THB 25.10 billion in E&E and automotive; and Taiwan with THB 4.76 billion focused on E&E and automotive parts. The BOI linked the investment surge to alignment with its five-year high-tech development strategy and investor confidence in Thailand’s long-term economic outlook. In 2024, Thailand’s total investment promotion value rose 35% year-on-year to a 10-year high of THB 1.14 trillion, with the digital sector leading at THB 243.30 billion, followed by the E&E sector at THB 231.70 billion.

THAILAND, UNITED STATES
Thailand targeting increased exports of pet food and processed food products to US
(28 April 2025) Thailand is targeting increased exports of pet food, rice, and processed food products to the US, aiming to capitalise on Chinese exporters’ exclusion from the market due to elevated tariffs. Key areas of focus include expanding market share in products where Thailand is already a leading US supplier—such as dog and cat food, rice, and processed mackerel—while also substituting Chinese-origin items like noodles, frozen seafood, soy sauce, and bamboo shoots. However, Thailand faces a 36% tariff that could impede retention of its US market share, with additional concern over potential circumvention by Chinese goods routed through countries with lower US tariffs. Prime Minister Paetongtarn Shinawatra has instructed tighter issuance controls for certificates of origin and offered concessions such as increased imports of US commodities (corn, natural gas, and ethane), lower import duties, and removal of non-tariff barriers in efforts to secure trade terms with Washington. Thailand’s 2024 exports to the US reached USD 55 billion (MYR 240 billion), up from USD 26.6 billion in 2017, with agricultural exports alone accounting for USD 4.8 billion. The IMF has revised Thailand’s 2025 GDP growth forecast down to 1.8% from 2.9%, partly due to trade war impacts. Thailand is also preparing for increased domestic inflows of Chinese agricultural goods—such as garlic, dried chili, green tea, and preserved vegetables—which may lower input costs for some businesses but also heighten competitive pressures.

RCEP Monitor

CHINA
Official manufacturing PMI falls to 49 in April, marking sharpest contraction since December 2023 
(30 April 2025) China’s official manufacturing PMI fell to 49 in April 2025, from 50.5 in March, marking the sharpest contraction since December 2023, amid the initial impact of new US tariffs of 145% on Chinese goods. Non-manufacturing PMI also missed forecasts, reflecting weaker construction and services activity. New export orders declined to the lowest level since December 2022, with the steepest drop since April 2022, while manufacturing employment contracted at its fastest pace since February 2024. Economists from Morgan Stanley and Nomura signalled the tariffs are triggering a broader slowdown, leading UBS and Goldman Sachs to cut 2025 growth forecasts to 4% or lower. Despite the downturn, Beijing has limited its response to measures improving loan access for exporters and focusing on domestic consumption, while continuing to implement the stimulus plan approved in March. The offshore yuan initially weakened but recovered to 7.26 per dollar, while the CSI 300 Index remained stable. Caixin’s private PMI rose to 50.4, above forecasts, reflecting marginal growth in smaller, export-driven firms. First-quarter industrial profits rose just 0.8%, and major solar manufacturers posted over CYN 8 billion (USD 1.1 billion) in losses. The National Bureau of Statistics attributed the April PMI decline to a high base and external volatility. 

NEW ZEALAND
Business confidence declines sharply in April 2025, marking the lowest level since July 2024
(30 April 2025) New Zealand business confidence declined sharply in April 2025, with ANZ Bank’s sentiment index falling to 49.3 from 57.5 in March, marking the lowest level since July 2024. The own-activity expectations index dropped to 47.7 from 48.6, indicating reduced economic momentum. The decline followed the announcement of new US tariff measures under President Donald Trump, which prompted firms to delay investment and hiring decisions. ANZ reported that survey responses submitted after the tariff news were notably more negative, signalling an immediate impact on forward-looking indicators. Economists confirmed that the data reflected a significant negative shift in sentiment, particularly regarding capital expenditure and labour plans. ANZ has revised its GDP growth forecast downward and now anticipates the Reserve Bank of New Zealand will cut the Official Cash Rate from 3.5% to 2.5% within the year. Government officials noted diminished fiscal headroom for new spending in the upcoming budget, attributing this to slowing recovery and heightened uncertainty. Labour market conditions remain subdued, reinforcing concerns about prolonged weakness in domestic demand.

SOUTH KOREA
Technology exports see significant rise in April 2025, driven by stockpiling  
(01 May 2025) South Korea’s technology exports saw a significant rise in April 2025, driven by stockpiling in anticipation of potential re-imposition of US tariffs. Chip exports, the country’s largest export category, surged 17.2%, marking the biggest increase in four months and the highest ever for April. Wireless communication devices, including smartphones, and biopharmaceutical products also experienced strong growth, with increases of 26.5% and 21.8%, respectively. Overall exports rose by 3.7% to USD 58.2 billion, while imports dropped 2.7%, resulting in a trade surplus of USD 4.8 billion. Notably, shipments to the European Union increased by 18.4% to a record USD 6.7 billion, while exports to China grew by 3.9%. However, exports to the United States fell by 6.8%, with automobile shipments also down 3.8%. Experts suggest that the surge in exports reflects preemptive buying by companies and consumers concerned about the looming US tariffs. South Korea’s Trade Minister highlighted that the data demonstrates the resilience of Korean exports amid external uncertainties.