ASEAN 
Singapore drops from number one spot in IMD’s 2021 World Competitiveness Ranking
(17 June 2021) Singapore fell from the number one spot to the fifth in the IMD’s World Competitiveness Ranking for 2021. The annual ranking by IMD analyzes and ranks countries according to how they manage their competencies to achieve long-term value creation. The survey looked beyond economic considerations to also consider the political, social, and cultural dimensions. The international ranking looks at 64 economies, and found that factors including investment in innovation, digitalization, welfare benefits and political leadership resulting in social cohesion helped certain economies better weather the pandemic, allowing them to rank higher in competitiveness. The ASEAN country with the largest gain was Indonesia, which jumped three spots from 40 to 37. Meanwhile, the Philippines saw the largest drop, from 45 to 52 (a seven point drop).

INDONESIA 
Indonesian rupiah falls to one-month low due to rising COVID-19 cases and hawkish move by US Fed
(17 June 2021) Indonesia’s rupiah fell by 0.7% to its lowest level in nearly a month due to both rising COVID-19 cases and a surprise hawkish turn by the US Federal Reserve. The central bank of Indonesia, which had cut rates by 150 basis points and injected over US$57 billion worth of liquidity since 2020, left rates unchanged at 3.50% and pledged to further strengthen measures to stabilise the rupiah. A surprise announcement by the US Federal Reserve signalling it would raise interest rates earlier than expected and consider tapering bond buying caused the US Dollar to hit a two-month high, and is also expected to have deprecionary pressure on the Indonesian rupiah. The Indonesian central bank has limited room to ease policy further due to ‘emergent macro-stability risks’.

SINGAPORE
Singapore central bank launches media campaign warning young consumers of BNPL services 
(15 June 2021) Singapore’s central bank, the Monetary Authority of Singapore, has launched a media campaign to warn young consumers of the dangers of ‘Buy Now, Pay Later’ (or BNPL) services. BNPL services allow consumers to purchase products and pay through monthly installments without interest fees. The COVID-19 pandemic has helped accelerate the adoption of BNPL services by forcing consumers and businesses online, as well as by creating more uncertainty for people’s incomes and budgets. Southeast Asian technology giants have also began offering BNPL services within Southeast Asia, such as Grab Holdings Inc and Traveloka Indonesia PT. However, 27% of Singaporeans stated they were financially worse off due to BNPL purchases, according to a 2020 report from financial comparison platform Finder. The Singaporean central bank stated they will consider future regulations on the industry such as verifying BNPL users’ incomes and creating a centralized system to check on advances taken between credit cards and BNPL platforms.

SINGAPORE 
The IMF has slashed its 2021 growth forecast for the Philippines to 5.4% from 6.9%
(16 June 2021) The IMF slashed its 2021 growth projections for the Philippines from 6.9% to 5.4% due to a recent reimposition of COVID-19-related restrictions, but expects a sharper rebound in 2022 should these restrictions be lifted sooner than expected. The Philippines economy contracted by 9.6% in 2020, and shrank by 4.2% in the first quarter of 2021. The IMF expects the country’s economy to expand by 7% in 2022, from a previous estimate of 6.5%. A resurgence of COVID-19 cases and potential delays in its vaccination rollout will post downside risks to the IMF’s outlook. A new surge of COVID-19 cases in March 2021 pushed the government to reimpose strict restriction measures to contain the virus. Although the capital has begun to ease restrictions, other provinces are still battling surges.

THAILAND  
Thailand plans to reopen borders to foreign tourists within 120 days
(16 June 2021) On 16 June 2021, the Thai Prime Minister announced that Thailand will reopen its borders to international tourists within 120 days, placing the country’s reopening sometime in October 2021. The Prime Minister also called upon key tourist destinations to reopen sooner if they are ready, and that travellers who are already vaccinated should be exempt from quarantine. This would also apply to Thais who have been vaccinated, travel abroad and then return home. The Thai government is currently coordinating with six vaccine producers, including Pfizer, Moderna, AstraZeneca, Sinovac and Sinopharm, and that it has secured 105.5 million doses of COVID-19 vaccines to be delivered within this year.

MALAYSIA
Malaysian poverty rate spiked to 8.4% in 2020 due to COVID-19 pandemic
(17 June 2020) Malaysia’s poverty rate spiked to 8.4% in 2020 due to the COVID-19 pandemic, a rise from 5.6% in 2019. The pandemic had caused disruptions to people’s incomes, leading to more households being exposed to poverty. This was especially the case for people in the B40 and most vulnerable groups. The Economic Affairs Minister noted that despite the poverty rates being relatively low across all ethnic groups, it remained a persistent issue, as well as instances of inequality and multidimensional poverty involving non-income aspects such as access to healthcare, education and basic amenities. The biggest factors hindering the government’s goal of eradicating poverty by 2030 include malnutrition, the increasing burden of healthcare, the digital divide, inequality, environmental concerns and inclusive development.

VIET NAM
Viet Nam imposes anti-dumping levy of 47.64% on some sugar products from Thailand
(16 June 2021) According to Viet Nam’s Ministry of Industry and Trade, Viet Nam imposed an anti-dumping levy of 47.64% on some sugar products from Thailand for five years to replace a temporary tax introduced in February 2021. The decision came after an anti-dumping investigation by the ministry which had started in September 2020, and which found that subsidised sugar shipments from Thailand surged 330.4% to 1.3 million tonnes in 2020, and that the imports were undermining the domestic sugar industry. The ministry had temporarily imposed a 33.88% levy on Thai sugar in February. Thailand’s vice commerce minister responded by stating that the Thai government would request their Vietnamese counterparts to open a new investigation to review the measures in 2022.

RCEP Monitor

RCEP/ ASEAN 
New Zealand top World Bank’s Women, Business and the Law 2021 (WBL 2021) Index amongst RCEP countries; Laos top in ASEAN
(2021) Amidst a global pandemic that threatens progress toward gender equality, World Bank’s Women, Business and the Law 2021 identifies barriers to women’s economic participation and encourages reform of discriminatory laws. Women, Business and the Law 2021 measures the laws and regulations that affect women’s economic opportunity in 190 economies using eight indicators structured around women’s interactions with the law as they move through their careers: Mobility, Workplace, Pay, Marriage, Parenthood, Entrepreneurship, Assets, and Pension. By region, OECD high-income economies score the highest, followed by Europe and Central Asia, Latin America and the Caribbean, and East Asia and the Pacific. Economies in Sub-Saharan Africa have an average regional score of 71, while economies in South Asia score 63.7. Economies in the Middle East and North Africa have the lowest average score, 51.5. New Zealand obtained the highest WBL 2021 score amongst RCEP countries at 97.5 points. Amongst ASEAN countries, Lao PDR emerged as the top scorer, obtaining 88.1. Malaysia scored the lowest amongst both RCEP and ASEAN countries at 50 index points.

CAMBODIA 
Future of Cambodia’s only oil-producing company uncertain amidst liquidation of the parent company in Singapore
(7 June 2021) In an announcement on 4 June, Singapore-listed KrisEnergy said it was unable to pay its debts and “will proceed to liquidation.” KrisEnergy in December celebrated pumping the Southeast Asian country’s first oil from the Apsara field in Cambodia, an offshore concession also known as Block A. KrisEnergy has been under court protection from creditors since 2019 as it tried to restructure more than US$500 million in liabilities. KrisEnergy Ltd, the Apsara oil field development offshore Cambodia operator, has confirmed that all operations of its subsidiary in Cambodia, KrisEnergy (Cambodia) Ltd, will continue as normal, despite its parent company filing for liquidation on June 4. Director-General for Petroleum for the Ministry of Mines and Energy, Cheab Sour, told The Phnom Penh Post on June 8 that he would keep a lookout for further details of the court proceedings or other pertinent information concerning the company.

MALAYSIA
Austria’s AT&S picks Malaysia for PCB, IC plant, total investment RM8.5billion
(10 June 2021) AT&S, the Austria-headquartered global manufacturing leader of high-end printed circuit boards (PCB) and integrated circuit (IC) substrates, has chosen Malaysia as its first production plant in Southeast Asia. AT&S’ new facility in Kulim Hi-Tech Park, Kedah involved a proposed total investment of RM8.5 billion and would create 5,000 high-tech and high impact jobs, Senior Minister and International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali said. Construction of the facility is scheduled to begin in the second half of 2021 with commercial operations targeted to come on stream in 2024. Besides the manufacturing of high-tech products, a significant amount of R&D activities will be executed at this new location.

SINGAPORE 
UOB becomes the first bank in Singapore to pilot digital signature authorisation
(11 June 2021) United Overseas Bank Limited (UOB) has announced on 10 June that it will pilot the use of GovTech’s Sign with Singpass to confirm transactions or product applications using its customers’ digital signatures. The bank will test its digital initiative through an initial 12-month pilot with some of its retail and corporate customers. The pilot will cover forms for individual wealth planning services and the PayNow Corporate application. Following the 12-month pilot period, UOB says it aims to expand the use of Sign with Singpass to more products and services for both the retail and wholesale segments in Singapore.

THE PHILIPPINES  
UNObank secures digital banking license in the Philippines
(9 June 2021) SINGAPORE-headquartered fintech company DigibankASIA Pte Ltd, one of the primary incorporators of the UNObank digital bank, has been granted a license to operate a digital bank in the Philippines. UNObank’s goal is to help bridge the financial inclusion gap in the Philippines and eventually Southeast and South Asia. UNO, which means ‘one’, sets the premise for a digital bank that offers one app and one card to enable consumers anywhere in the Philippines to save, borrow, transact, invest, and protect their finances easily. In a statement, DigibankASIA said it has received approval from the Bangko Sentral ng Pilipinas (BSP), the Philippine’s central bank, to operate a digital bank in the country. The company said it is working with world-leading modern technology firms, including Mambu, Backbase and AWS, to build their technology stack.

THE PHILIPPINES
Philippines external trade doubled in April 2021 compared to 2020
(11 June 2021) Total merchandise trade between the Philippines and the rest of the world more than doubled in April to US$14.16 billion from 2020, with both exports and imports posting substantial growth. The latest data from the Philippine Statistics Authority (PSA) showed that total external trade jumped 107.5% in April from US$6.83 billion in the same month in 2020. In a report, ING’s senior Philippine economist Nicholas Mapa attributed the export gains to the resumption of regional manufacturing operations. The PSA earlier reported that the volume of production index, a proxy for factory output, also reverted to growth of 162.% year-on-year in April 2021. The Development Budget Coordination Committee expects goods exports to grow 8% this year, while imports were projected to rise by 12%.

THAILAND
Thailand targets 3 million foreign tourists this year under phased COVID-19 reopening
(9 June 2021) Tourism-reliant Thailand expects about 3 million foreign tourist arrivals this year, tied to a phased reopening to vaccinated visitors later this year, the state tourism agency said on 9 June. Thailand, which launched its mass vaccination campaign on 7 June, will allow inoculated foreign tourists to visit Phuket Island without a quarantine next month in a pilot scheme before reopening nine other provinces in October after a year of tight entry restrictions. Most of the 3 million arrivals are expected in the final quarter, with spending estimated at between 240 billion baht to 300 billion baht (US$7.7 billion to US$9.6 billion), Siripakorn Cheawsamoot, Deputy Governor of Tourism Authority of Thailand, told Reuters.

RCEP Monitor

SINGAPORE 
COVID-19-induced border closures from South Asia causing labor shortages in Singapore
(01 June 2021) The COVID-19 induced border closures with South Asian countries have caused labor shortages in Singapore, particularly in sectors which depend on low cost labor such as construction and shipping. Even before the authorities had prevented entries from India in late April 2021, and subsequently other South Asian countries in early May 2021, tighter travel rules were already keeping workers away. The labor shortage has caused construction projects to be delayed by as much as a year, pushed up labor wages by up to 30%, and have forced many laborers to undertake higher workloads. In 2020, the number of foreign workers working at building sites, shipyards, and factories plunged 16% year-on-year to 311,000, while the total number of international workers dropped by 14% year-on-year to reach 1.23 million. While the government has maintained its annual growth outlook for 2021 at 4% to 6%, versus last year’s 5.4% contraction, they noted the recovery could be uneven across different sectors and industries.
 

SINGAPORE 
Unemployment rate for Singaporean citizens and residents falls in April 2021
(03 June 2021) According to the Singaporean Ministry of Manpower, the unemployment rate for Singaporean residents and citizens continued to decline in April 2021. The unemployment rate for citizens fell by 0.1% to 4.1%, while the rate for Singapore residents fell from 4% to 3.9%. Overall, the unemployment rate remained unchanged at 2.9% in April 2021. A total of 92,100 people were unemployed in April, including 82,800 citizens. The unemployment rate peaked in September 2020, and has remained flat or declined from month to month since then. The Minister of Manpower noted that the unemployment rate remains elevated.
 

INDONESIA
Indonesian government to stick to promise of narrowing budget deficit to less than 3% of GDP by 2023
(31 May 2021) The Indonesian government intends to stick to its pledge of reducing its budget deficit to less than 3% of GDP by 2023, despite the fiscal uncertainty caused by the COVID-19 pandemic. The Indonesian Finance Minister stated that the government would be able to reduce its budget deficit to as low as 2.71% of GDP in 2023, from 5.7% in 2021 and 4.5% to 4.85% in 2022. The deficit ratio is expected to go down steadily, to as low as 2.6% by 2025. Indonesia’s efforts in fiscal consolidation has been complicated by a fresh spike in COVID-19 cases. The Finance Minister stated that the government can make spending more efficient and tap new funds like the sovereign wealth fund to bring in more equity financing instead of relying on debt financing. New taxes may also be introduced.
 

MALAYSIA 
Malaysia’s wealthiest saw their combined wealth jump by 14% in 2021
(04 June 2021) According to Forbes, Malaysia’s wealthiest saw their combined wealth jumped from US$79 billion in 2020 to US$90 billion in 2021, an increase of 14%. This was largely attributed to Malaysia’s dominant position as a major exporter of gloves to the world. During the pandemic, demand for protective gear increased significantly, causing Malaysian's exports of rubber gloves to doubled. Sugar baron Tan Sri Robert Kuok remains the richest Malaysian, with a fortune of US$12.2 billion. Tan Sri Quek Leng Chan, second-generation head of the privately-held Hong Leong Group, remains at No 2 with US$9.6 billion. Seven individuals from the 2020 list dropped out in 2021, including AirAsia duo, Tan Sri Dr Tony Fernandes and Datuk Kamarudin Meranun, due to the effects of the pandemic on the travel industry.
 

PHILIPPINES  
The Philippines central bank projects inflation to return to within its 2% to 4% target band by the second half of 2021
(04 June 2021) The Philippines central bank has projected inflation to return to within its 2% to 4% target band by the second half of 2021. This came after government data released on 04 June 2021 showed headline inflation had stabilized at 4.5% for the third consecutive month. The annual inflation figure for May 2021 reflected slower price increases in the heavily-weighted food and non-alcoholic beverage index, which offset higher energy costs. Core inflation, which excludes more volatile food and fuel prices, was also unchanged at 3.3% in May 2021. Inflation averaged at 4.4% in the first five months of 2021. The central bank projects the headline figure to remain above 4% in June 2021, and then to decelerate to within the target range by the second half of 2021 and beyond in 2022.

THAILAND
Thai government approves US$4.5 billion in stimulus measures to counter impact of new COVID-19 wave
(01 June 2021) The Thai government approved a package of economic stimulus measures totalling US$4.5 billion to counter the impact of Thailand’s most recent COVID-19 wave. The measures include cash handouts, co-payments, and cash rebates, and are expected to be implemented starting on 01 July 2021. Thailand’s economy is facing headwinds from its most recent COVID-19 wave, which has totaled more than 130,000 cases since it began in Bangkok in April 2021. The Governor of the Bank of Thailand stated on 31 May 2021 that the Thai economy may not return to its pre-pandemic growth levels until early 2023. Thailand’s most recent packages will be financed through borrowing under a US$32.0 billion program approved in April 2020.
 

CAMBODIA
Cambodia’s fresh chilli exports see 95% year-on-year jump in first five months of 2021 
(04 June 2021) According to Cambodia’s Ministry of Agriculture, Forestry and Fisheries, Cambodia’s fresh chilli exports jumped by 95% year-on-year in the first five months of 2021, reaching 56,507 tonnes in exports. Cambodia also exported 600 tonnes of dried chillies within the same period, a decline of 50% compared to the same period last year. The biggest export market for Cambodia is Thailand, followed by the United Arab Emirates. Among Cambodia’s other major agricultural exports include rice, rubber, cassava, cashew nut, corn, fresh banana, pomelo, mango, and pepper.

RCEP Monitor

ASEAN 
Scrap demand may exceed supply in ASEAN countries in 2021
(20 May 2021) ASEAN-7 countries exported about 1.20 million MT of ferrous scrap in 2020, which saw a decrease of 46.8% from 1.75 million MT of the same period in 2019. The top 3 exporting countries were Singapore, Malaysia and Thailand. 31.4% of the export has gone to India and 20.3 % to Indonesia. Other smaller countries in the APAC and ASEAN too have sourced the material for their steelmaking facilities due to their limited domestic scrap availability. The 2020 SEAISI Steel Statistical Yearbook noted that the local generation of ferrous scrap in the ASEAN-7 region is enough only to feed about half to its local requirements. All of the countries do not have enough supply of local ferrous scrap to meet the demand and therefore need to source the critical materials from outside of the region. Steel mills in the region will go back into full swing in their operations in the coming months to meet past established and new market requirements. And with more planned capacities to kick off after a long delay, sourcing the raw material ferrous scrap is expected to be very competitive. An external factor that drives this trend is China’s policy for a cleaner environment, which encourages the setting up of more electric arc furnaces (EAF) and fewer blast furnaces / basic oxygen furnaces (BF/BOF) investments and this will increase the demand for ferrous scrap. ASEAN-7 steelmakers maintained their utilisation rates last year and are expected to do the same for this year as economic activities are returning to the level seen before the pandemic. With ferrous scrap being such an important raw material for the production of iron and steel, there are concerns that demand may outstrip supply.

INDONESIA 
Indonesia says it is building a US$1.2 billion battery plant with South Korea’s LG
(24 May 2021) State-owned Indonesia Battery Corporation (IBC) and South Korea’s LG will build a new battery plant worth US$1.2 billion with the capacity of 10-gigawatt hours (GWh), Indonesia’s Investment Minister, Bahlil Lahadalia, said on 24 May. “The first phase of construction will have a production capacity of 10 GWh, which will later be used for electric vehicles (EVs) from Hyundai ” he added. The plant, part of a bigger US$9.8 billion EV deal between LG and Indonesia signed last year, will be built in the city of Bekasi, on the eastern border of the capital Jakarta. Indonesia is targeting to produce 140 GWh worth of batteries by 2030, officials have said.

MALAYSIA, SINGAPORE 
Chinese corporates view Singapore and Malaysia as top destinations for growth opportunities in ASEAN, says Standard Chartered
(27 May 2021) The majority of Chinese companies focusing on ASEAN expect to see their businesses grow in the region over the next 12 months, according to a survey commissioned by Standard Chartered. The Borderless Business: China-Asean Corridor report explores potential opportunities for cross-border growth between both regions. The survey, which was conducted in April among senior executives at 43 China-based companies, revealed that the same companies consider Singapore and Malaysia as the best markets for expansion opportunities in ASEAN. 60% of respondents from the survey indicated that they are focusing on expanding in Singapore to capture sales and production opportunities, second to Malaysia at 65%, and followed by Thailand’s 53%. Around 47% of Chinese corporates are also keen to tap into Singapore as a major regional procurement hub, and 44% of the same companies indicate that they are looking to build a regional research and development (R&D) or innovation centre in the country as they look to expand across ASEAN. In addition, 47% of the respondents agreed that the network of Free Trade Agreements (FTA) makes Asean the ideal base to access the global markets.

THAILAND 
Thailand plans more economic measures to cope with COVID-19 impact
(27 May 2021) Thailand plans additional measures to retain jobs and boost domestic consumption in a bid to help the Southeast Asian economy weather its most severe COVID-19 outbreak so far, the state planning agency said on 27 May. The tourism-reliant nation is struggling with the third wave of infections which have accounted for more than 80% of its total cases and deaths. “We need to have enough oxygen for the business sector to get going… and to sustain consumption at normal levels,” Danucha Pichayanan, head of the National Economic and Social Development Council, told a seminar. Thailand’s tourism might not normalise until 2026, affecting over 7 million workers, as the country’s jobless rate hit a 12-year high in the first quarter. The measures being prepared to include one to retain jobs at smaller firms and assistance for tourism, which has been hit by the outbreak. The new measures would be financed by new borrowing of 500 billion baht (US$16 billion), which was approved by the king earlier this week, Danucha said.

SINGAPORE
Tech invasion of Singapore offices, chipping away at the dominance of banks in the island-state’s central business district
(28 May 2021) In the financial mecca of Singapore, a new crowd is flocking to its offices: technology companies. The financial industry used to be the main driver of office demand in Singapore, taking up almost half of new space between 2004 and 2014. That share plunged to 26% between 2015 and 2020, according to estimates by real estate consultancy firm Jones Lang LaSalle Inc. Over the same period, the portion obtained by tech firms almost tripled to 22%. According to Alan Miyasaki, head of Asia real estate acquisitions at Blackstone Group Inc, financial firms were forced to trim workspace because of the pandemic but that vacancy was snapped up quickly because there were a lot of these technology firms coming in to take over vacancies.” Easy access to funding for tech firms including startups makes Singapore an appealing destination. And to draw top global talent, the government last November launched a program providing a two-year visa for tech entrepreneurs and investors. Rents in Singapore are showing signs of recovery after slumping during the pandemic-induced recession. The office rental index climbed 3.3% in the first three months of 2021, the first gain in seven quarters, according to Urban Redevelopment Authority data.

THE PHILIPPINES  
Nokia wins 5G deal with DITO in the Philippines
(26 May 2021) Nokia announced that it has been selected by DITO Telecommunity Corporation (DITO) to deploy 5G services on the island of Mindanao in the Philippines. The deployment will enable DITO to complete its ambitious strategy of building a high-quality 5G network throughout the country, which formally launched in May 2021. To achieve the desired network performance, Nokia is providing equipment from its comprehensive massive MIMO, multi-band, Single RAN AirScale portfolio to build the Radio Access Network (RAN) for the 5G infrastructure across Mindanao, the Philippines’ second largest island. DITO also utilized Nokia’s NetAct solution for network management and seamless daily network operations, including configuration management, monitoring, and software management. Nokia has been an existing 4G LTE radio partner since 2020. DITO, a joint venture between Udenna Group and China Telecom, is the newest telecommunications provider in the Philippines and is pursuing a strategy of creating a new network in the country.

VIETNAM
ADB Signs Green Loan to Develop 144 MW Wind Farms in Vietnam
(27 May 2021) The Asian Development Bank (ADB) signed a US$116 million green loan with Lien Lap Wind Power Joint Stock Company (Lien Lap), Phong Huy Wind Power Joint Stock Company (Phong Huy), and Phong Nguyen Wind Power Joint Stock Company (Phong Nguyen) to build and operate three 48-megawatt (MW) wind farms, totalling 144 MW, in Quang Tri Province, Viet Nam. The project will increase Viet Nam’s wind power capacity by 30%, helping the country meet the rapidly growing demand for energy. It is ADB’s first financing of a wind power project in Vietnam and is certified by the Climate Bonds Initiative, which administers the international Climate Bond Standard and Certification Scheme. The ADB loan comprises a US$35 million A loan directly funded by ADB and a US$81 million syndicated B loan. The project will generate an average of 422 gigawatt-hours of electricity and avoid an average of 162,430 tons of CO2 emissions annually.

RCEP Monitor

ASEAN 
ASEAN nations being impacted by new wave of COVID-19
(15 May 2021) Much of Southeast Asia is being impacted by a new wave of COVID-19, with clusters having been found in areas particularly vulnerable to the spread of the virus, including hospitals, quarantine facilities and border crossings. New variants of COVID-19 which are more transmissible have also been blamed for the new outbreaks. In particular, new cases in Malaysia have more than tripled over the past month, while Thailand’s daily tally has jumped from 50 in early April to more than 2,000 a month later. Meanwhile, nearly 90% of Cambodia’s 20,000 odd recorded infections occurred since the start of April. Most countries’ outbreaks have been attributed to mass travel associated with religious or national holidays, as well as foreign travellers bringing the virus into their borders. While vaccination rates are rising within the region, with the exception of Singapore and Viet Nam less than 10% of the adult population in each country has received any COVID-19 vaccine doses.
 

MYANMAR 
Total imports from eight trading partners including US, Canada, and New Zealand fell 38% on the year in February 2021
(19 May 2021) According to data collected by Nikkei Asia, Myanmar’s imports from eight trading partners, including the United States, Canada, and New Zealand, fell 38% on the year in February 2021. Meanwhile, Myanmar’s exports to these eight trading partners fell by 9% within the same period. These eight trading partners make up roughly one-tenth of Myanmar's total trade. Trade with the United States fell the furthest, with American exports to Myanmar contracting by 60% and its imports falling by 12%. This has been attributed to Washington’s relatively quick imposition of sanctions on the country. Trade figures for March and April are expected to show sharper contractions. 
 

MALAYSIA 
Malaysia preparing to offer handsome tax incentives to accelerate the electric vehicle industry in the country
(19 May 2021) The Malaysian government is preparing to offer ‘handsome’ tax incentives to accelerate electric vehicle development in the country in its soon-to-be-announced accelerated EV policy under the National Automotive Policy (NAP) 2020. Under the incentives plan, fixed incentives including excise duties, import duties and sales taxes will be offered to industry players and EV car users. Higher levels of incentives will be offered to companies bringing something ‘extraordinary’ into the country. Original equipment manufacturers (OEMs) will be able to enjoy fixed incentives as well as other special incentives customized for them. Among the benefits which EV car users can enjoy will include road taxes, green parking schemes, charging installations as well as toll rebates. It is hoped that this policy will be brought to the Cabinet by June 2021 for approval, before announcing it in July.
 

INDONESIA 
Indonesia’s Finance Minister proposes budget deficit of 4.51% to 4.85% of GDP for 2022
(20 May 2021) Indonesia’s Finance Minister Sri Mulyani Indrawati proposed a budget deficit of 4.51% to 4.85% of GDP for 2022, as well as new potential taxes to increase revenue amid improving economic conditions. This proposal was based on the assumption that the rupiah exchange rate would average 13,900 to 15,000 a dollar and the yield of the benchmark 10-year bond would be within the range of 6.32% to 7.72%. The Indonesian government is targeting between 5.2% to 5.8% GDP growth for 2022, while also targeting 2% to 4% inflation rate for the same year. Indonesia is expected to produce between 686,000 to 726,000 barrels per day in 2022, while gas lifting was projected to be between 1.031 million to 1.103 million barrels of oil equivalent per day.
 

THE PHILIPPINES
The Philippines government slashes growth projections to between 6% and 7%
(18 May 2021) The Philippines’ Development Budget Coordination Committee slashed its growth projections for 2021 to between 6% and 7%. This is down from its previous estimates of 6.5% to 7.5% growth. It also lowered its growth projections for 2022 to between 7% and 9% growth, from 8% to 10% earlier. This downgrade came after the country’s first quarter GDP contracted by more than expected at 4.2%. This has been attributed to stricter COVID-19-related curbs introduced since late March 2021 in the capital and surrounding provinces. According to a survey of economists by Bloomberg News in May 2021, the Philippines economy will expand by 5.5% in 2021, 6.5% in 2022, and 6.1% in 2023.
 

THAILAND  
Thailand to add workers in Bangkok and nine other provinces to the front of the vaccination queue
(20 May 2021) Thailand intends to add workers in Bangkok and nine other provinces with large economies to the front of the vaccination queue, in an effort to buttress the economy. Millions of workers under the social security program will be eligible for the vaccine alongside other priority groups including senior citizens and individuals with underlying conditions. Thailand has thus far only administered some 2.4 million shots, and its pace of vaccinations has been relatively slow due to the limited supply of vaccines. Thailand has slashed its growth projections for 2021, citing the delay in reopening borders to foreign tourists and slow pace of vaccination. The economy may expand between 1.5% and 2.5% in 2021, less than the 2.5%-3.5% forecast in February 2021.
 

VIET NAM
Alibaba leading US$400 million investment deal into Vietnamese conglomerate Masan Group Corp.’s retail arm
(18 May 2021) Chinese tech giant Alibaba Group Holding Ltd and partners are investing some US$400 million into Vietnamese conglomerate Masan Group Corp.’s retail arm, thereby expanding Alibaba’s reach into the online groceries business in Southeast Asia. Alibaba and its partner Baring Private Equity Asia are leading a consortium that will take a 5.5% stake in The CrownX, which holds Masan’s interests in Masan Consumer Holdings and VinCommerce, while the conglomerate will own 80.2% of the firm following the investment. The CrownX is believed to have a pre-investment valuation of US$6.9 billion. As part of the deal, the Vietnamese retail firms will partner with Alibaba’s Southeast Asian unit Lazada to expand its digital business in the country.

RCEP Monitor

ASEAN 
ASEAN manufacturing conditions picked up in April 2021
(5 May 2021) ASEAN manufacturing conditions improved at a noticeably quicker rate during April and one that was the fastest since July 2014, according to the latest IHS Markit Purchasing Managers’ Index (PMI™) data. The headline PMI posted above the neutral 50.0 mark for the second month running, rising from 50.8 in March to 51.9 in April, signalling the fastest improvement in the health of the ASEAN manufacturing sector since July 2014 and one that was moderate overall. Across the seven constituent nations, Vietnam saw the strongest growth. The headline PMI for Vietnam hit a near two-and-a-half-year high of 54.7 and signalled a sharp rate of expansion. Following closely behind was Indonesia, where the PMI hit a record high (since early-2011) of 54.6, and likewise pointed to a marked improvement in overall manufacturing conditions. Growth was also recorded in Malaysia, where the headline index climbed above the neutral 50.0 mark for the first time in ten months. Thailand likewise saw a return to expansion during April. The headline PMI (50.7) was indicative of only a mild rate of growth. Elsewhere, both Singapore and the Philippines registered renewed contractions during April. For the former, the headline index (49.5) signalled the first deterioration in conditions since last September, but only a fractional one. In the Philippines, the contraction was the first in four months and, though marginal, was the fastest since October 2020 (index at 49.0). Finally, Myanmar again registered the steepest downturn of the seven monitored nations, as ongoing factory closures amid political instability continued to heavily impact the manufacturing sector. The PMI did rise to a three-month high of 33.0 but was nonetheless indicative of a substantial contraction.p;

ASEAN 
Increasing demand for environmental services in ASEAN opens opportunities for international trade in environmental services, says the ASEAN-Japan Centre
The ASEAN region is seeing an increase in the demand for environmental services due to rapid population growth and urbanization, including waste and wastewater management, air pollution and climate change mitigation, according to the study by the ASEAN-Japan Centre, Promoting Services Trade in ASEAN: Trade in Environmental Services, published on 6 May 2021. According to the report, due to the public nature of environmental services provision, the main types of trade liberalization in environmental services, like any other services trade, are service market access and national treatment; while licensing and approval procedures are the most prevalent regulatory measures as these processes can be discretionary in some countries. Important emerging issues related to this include the import of plastic waste by several ASEAN states and the increasing marine plastic debris problem. The paper recommends that freer trade reduce the cost of environmental services and help firms access cheaper or more advanced technology. Considering the public good nature of environmental services, the paper recommends ASEAN states to further delineate the commitments/activities that fall under environmental services, to focus on adapting to emerging new environmental situations as a region, and to include environmental services in provisions in regional trade agreements, which is not the case for the recently concluded Regional Comprehensive Economic Partnership (RCEP).

INDONESIA 
Indonesia aims for V-Shaped recovery after disappointing GDP in Quarter 1, 2021
(5 May 2021) Indonesia is setting its sights on a sharp turnaround starting this quarter as it assembles more stimulus programs to lift stubbornly weak domestic demand. GDP declined 0.74% in the first quarter from a year ago, the Indonesian statistics bureau said on 5 May 2021, worse than the median estimate of -0.65% in a Bloomberg survey of economists. Still, it represented an improvement from the 2.19% contraction in the final quarter of 2020. Southeast Asia’s largest economy should return to growth this quarter as the government readies tax and sales measures to support the retail sector, Coordinating Minister for Economic Affairs Airlangga Hartarto said in a briefing. “The trend of economic recovery is toward positive growth,” Hartarto said. “The curve is V-shaped, as seen in many other countries.” According to Bloomberg, the Indonesian GDP is expected to expand 6.9%-7.8% in the second-quarter period, a pace that would be its fastest since 2008. The country’s benchmark stock index pared the day’s gains to 0.2% after the GDP data were released. The rupiah was little changed at 14,435 to the dollar.

MALAYSIA 
KLCI succumbed to selling pressure, but higher crude palm oil prices despite Movement Control Order (MCO 3.0) concerns
(5-6 May 2021) The FBM KLCI extended losses for the fourth consecutive session today, as most of the key index’s components succumbed to selling pressure amid news of the reimplementation of the Movement Control Order or MCO 3.0 in parts of Selangor, Johor Bahru and Kuala Lumpur. At 5 pm of 5 May 2021, the local benchmark index closed 12.58 points or 0.79% lower at 1,575.67. Market breadth was negative as losers surpassed gainers, at 810 vs 297 gainers, while 419 counters were unchanged. Total volume fell to 7.37 billion shares worth RM4.24 billion from 7.48 billion shares worth RM4.13 billion. In contrast, Bursa’ Energy Index rose 1.14% to 907.89. The Telecommunication and Media Index was steady, closing 0.01 points higher at 715.42. The Malaysian crude palm oil (CPO) prices also climbed to a level near RM4,700 a tonne in morning trade on Bursa Malaysia on 6 May 2021 as prices of commodities including crude oil and copper strengthened on economic recovery bets despite lingering Covid-19 pandemic concerns. Globally, it was reported that Asian shares rose today and commodity prices held near multi-year highs as investors switched to cyclical amid hopes of a strong economic recovery.

THE PHILIPPINES
Monde Nissin to raise US$1 billion in Philippines’ biggest IPO
(6 May 2021) The producer of the Southeast Asian country’s best-selling instant noodle brand Lucky Me! is selling 3.6 billion shares at 13.50 pesos (US$0.67) per share for its initial public offering, it said in a letter to the local stock exchange. That is lower than the 17.50 pesos (US$0.87) maximum price indicated in its IPO filing. At 48.6 billion pesos (US$1 billion), Monde Nissin’s offering will be the biggest on record in the country. Monde Nissin’s shares are expected to begin trading on June 7, according to an earlier prospectus. According to its website, Monde Nissin makes crackers, muffins and biscuits, and has a presence in more than 30 countries. Monde Nissin plans to use the IPO proceeds for purposes including loan repayment and general corporate use, according to an earlier filing.

SINGAPORE 
Singapore Press Holdings (SPH) restructuring amid falling revenue sparks questions over future of journalism
(6 May 2021) The publisher of Singapore newspaper The Straits Times billed a plan on 6 May 2021 to spin off its media business into a non-profit entity, but observers are pessimistic that the move due to concerns that the move will alter the country’s state of press freedom. Singapore Press Holdings (SPH) will transfer its media business into a not-for-profit entity amid the ongoing challenge of falling advertising revenue. The restructuring exercise involves transferring the entire media-related business of SPH to a newly incorporated wholly-owned subsidiary, SPH Media Holdings. Singapore Press Holdings (SPH), one of Asia’s biggest media groups, said its new ownership structure would be similar to the likes of Britain’s The Guardian and The Tampa Bay Times in the US, both of which are owned by non-profit entities. Local observers noted that organisations such as The Guardian, owned by the Scott Trust Limited, were able to preserve editorial independence through firewalls erected between funders and newsrooms. SPH has for decades enjoyed a near-monopoly in newspaper publication because of strict licensing rules. While it is publicly listed, state-linked entities hold management shares that are crucial to determining editorial appointments.

THAILAND
Bank of Thailand leaves rate at a record low, warns of Covid risk
(5 May 2021) The central bank left its key interest rate unchanged at a record low of 0.50% on Wednesday, preserving its limited ammunition as the economy struggles with the third wave of coronavirus infections. The Bank of Thailand’s (BoT) Monetary Policy Committee voted unanimously to keep the one-day repurchase rate unchanged for an eighth straight meeting. “Economic growth is likely to sharply slow due to the third Covid-19 wave,” the central bank said in a statement. Monetary policy will remain accommodative to support economic activity, the BoT said. The bank reiterated that the limited policy room should be preserved to be used at the most effective time.

RCEP Monitor