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.

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
Chinese President Xi Jinping Concludes Southeast Asia Tour
(21 April 2025) Chinese President Xi Jinping completed a diplomatic tour of Viet Nam, Malaysia, and Cambodia, focusing on reinforcing regional cooperation through trade, infrastructure, and cultural agreements. The visit included the signing of multiple trade deals, highlighting strengthened bilateral ties, particularly with Malaysia, where China remains the largest trading partner with 2024 trade volumes reaching MYR 450 billion (USD 100 billion). ASEAN-China trade totalled MYR 4.3 trillion (USD 980 billion) in 2024. Xi’s itinerary included Viet Nam, Malaysia—currently ASEAN chair and country coordinator for ASEAN-China Dialogue Relations—and Cambodia, a long-time ally. The trip was interpreted as a strategic effort to position China as a stable economic and political partner amid global uncertainties. Casey Barnett of the American Chamber of Commerce in Cambodia noted Xi’s emphasis on historical ties to frame enduring regional partnerships. Asanga Abeyagoonasekera of the South Asia Foresight Network described the visit as a calculated demonstration of China’s credibility and regional leadership, aligned with Xi’s broader vision of a global community with a shared future.

MALAYSIA, EFTA
Malaysia highlighted as strategic investment destination for EFTA members
(24 April 2025) Swiss and Icelandic parliamentarians from the European Free Trade Association (EFTA) highlighted Malaysia’s growing appeal as a strategic investment destination for EFTA members—Switzerland, Iceland, Norway and Liechtenstein—due to its cost-effectiveness relative to Singapore and technological advancement over Viet Nam. The Swiss delegation cited China’s shift toward domestic production and export barriers as factors pushing Swiss firms to explore Malaysian opportunities. The Icelandic delegate noted Malaysia’s neutral foreign policy and balanced ties with both the US and China as key advantages amid geopolitical uncertainty. A new Malaysia-EFTA Economic Partnership Agreement (Meepa), to be signed in June, will eliminate import duties into EFTA countries and replace Malaysia’s existing preferential access under the Generalised System of Preferences. The Malaysian Investment, Trade and Industry Minister stated Meepa would offer long-term trade certainty. Separately, Switzerland is negotiating a new investment protection agreement with Malaysia to replace the current 1978 treaty. The Swiss delegation expects Swiss parliamentary approval but noted a potential delay if a public referendum is triggered.

MALAYSIA
IMF downgrades Malaysia’s 2025 GDP growth forecast to 4.1% from 4.7%
(23 April 2025) The International Monetary Fund (IMF), in its April 2025 World Economic Outlook, downgraded Malaysia’s 2025 real GDP growth forecast to 4.1% from 4.7%, with a further projection of 3.8% for 2026, citing regional and global economic pressures. The IMF also revised global growth for 2025 to 2.8%, down 0.5 percentage points from its January estimate, amid uncertainty stemming from recent tariff escalations by the United States, including widespread duties announced on 02 April and modified from 09 April onward. Regional downgrades include Indonesia (4.7% from 5.1%), the Philippines (5.5% from 6.1%), and Thailand (1.8% from 2.9%). The IMF highlighted diverging productivity trends, with industrial production rebounding in China and ASEAN-5 countries but remaining weak in Japan and major EU economies. US industrial production has shown stronger recovery relative to other advanced economies. Inflation is gradually aligning with central bank targets, and labour markets have largely normalised.

MALAYSIA, INDONESIA
Malaysia and Indonesia mulling large-scale plantation projects in Kalimantan and Papua
(24 April 2025) Malaysia and Indonesia are considering the development of large-scale plantations in Central Kalimantan and South Papua, following discussions between Malaysia’s Minister of Agriculture and Food Security and Indonesia’s Minister of Agriculture. Both parties also agreed to examine cross-border agricultural cooperation in West and North Kalimantan, targeting strategic sectors such as rice, dairy, animal feed, coconut, and grain corn, all identified as critical to their respective food security agendas. Indonesia’s Minister of Agriculture presented Indonesia’s agricultural transformation strategies, including smart technology adoption, a three-season annual padi planting model, and high-yield varieties like IPB 9G. During a working visit that began on 20 April, Malaysia’s Minister of Agriculture and Food Security also met with the leadership of Perusahaan Umum Bulog, Indonesia’s main agency for managing staple food stocks, to discuss collaboration in padi sector development, food supply chain management, strategic reserves, and logistics infrastructure. The Ministry of Agriculture and Food Security stated that the visit aligns with Malaysia’s broader goals to enhance food security and build a competitive, sustainable food system, particularly in its role as 2025 ASEAN Chair.

INDONESIA
Indonesia to implement higher mineral royalty rates on 26 April 2025
(24 April 2025) Indonesia will implement higher mineral royalty rates on 26 April 2025, raising nickel ore royalties from 10% to between 14% and 19% depending on price levels, and increasing rates for coal, gold, copper and tin based on price and permit conditions, with some doubling. The government stated the new policy is intended to maximise national benefit and ensure fairness and sustainability in resource management. The move comes amid declining tax revenue, the cancellation of a VAT increase, and rising expenditure on President Prabowo Subianto’s flagship programmes, including a national free meals initiative. Industry representatives have criticised the timing, citing a fall in commodity prices—nickel futures fell to USD 14,015 per tonne on 09 April—and geopolitical pressures. Concerns raised include investment uncertainty, rising operational costs, and potential production halts or mass layoffs. Nonetheless, the Indonesia Nickel Miners Association supports implementation, while acknowledging that a 14% royalty could make some mines unviable. The royalty hike aligns with Indonesia’s broader industrialisation and downstream policy, including a 2020 ban on raw mineral exports, and its long-term economic goals targeting 8% annual growth by 2029.

THE PHILIPPINES
The Philippines’ strategically positioned to benefit from lower tariffs
(24 April 2025) A study by the Philippine Institute for Development Studies found that the Philippines is among the least exposed Southeast Asian economies to the new US tariff regime, facing a 17% average tariff rate—the lowest among Malaysia, Thailand, Indonesia, Viet Nam and the Philippines. Using a Tariff Exposure Composite Index, the Philippines and Indonesia both scored 2.2, placing them in the moderate risk category; however, Indonesia is more vulnerable due to its higher 32% tariff and narrower exemption coverage of only 10%, compared to the Philippines’ broader 33% exemption coverage, primarily in semiconductors and electronics. Malaysia, with a 24% tariff and the highest exemption coverage at 46%, scored 2.8. Vietnam and Thailand, with tariffs of 46% and 36% respectively, scored 3.4 and 3.0, reflecting higher exposure; Vietnam sends 35% of its exports to the US, the highest in the group. The study concludes that the Philippines is strategically positioned to benefit from diverted trade and investment due to its favourable tariff structure and product mix. However, it notes that the country lacks the infrastructure, manufacturing scale, and investment readiness to immediately capitalise, highlighting the need for improvements in logistics, export promotion, and investment facilitation.

VIET NAM, CHINA
Chinese firms operating in Viet Nam face uncertainty due to tariffs 
(24 April 2025) Chinese businesses operating in Viet Nam are facing uncertainty due to the potential imposition of a 46% US tariff on Vietnamese exports, with firms like Huochacha New Energy Group reporting delays in factory projects and equipment orders from clients such as TCL. The firm’s manager confirmed that three to four projects are currently on hold, attributing this to client hesitancy amid the tariff threat. Despite Viet Nam’s current 10% blanket US tariff, businesses remain cautious ahead of possible reciprocal measures in July. Chinese investment in Viet Nam has surged, with China ranking third among foreign investors in 2024 and accounting for over 25% of newly registered projects, driven by trade friction with the US and intensifying competition in China. In Bac Ninh province, home to significant Chinese and South Korean industrial activity, the number of Chinese residents exceeded 10,000 by end-2023 and has likely risen further. Managers cited growing interest from Chinese firms seeking to relocate production and access new markets. A 2024 IMF report found no clear evidence of Viet Nam facilitating Chinese exports to the US, but some have acknowledged entrepôt trading practices among clients. In response, Viet Nam’s trade ministry has instructed tighter control over goods origin to mitigate sanction risks. Labour impacts are also emerging, with workers at Chinese-owned factories, such as Hung, reporting reduced hours and income uncertainty. Investor sentiment remains cautious, with planned capital expenditures and equipment upgrades delayed due to the trade outlook.

RCEP Monitor

JAPAN
Japanese pharmaceutical companies show relative resilience amid broader market declines
(22 April 2025) Japanese pharmaceutical companies have shown relative resilience amid broader market declines triggered by U.S. tariff threats, with Takeda, which earns 89% of its revenue overseas (51.5% from the U.S.), maintaining stable share performance due to localised U.S. production of its blood plasma products. Chugai Pharmaceutical’s stock rose 19% year-to-date following positive Phase 3 results for orforglipron, licensed to Eli Lilly, while its overseas operations and royalties are managed by Roche. Shionogi anticipates over 50% of its revenue from royalties on HIV treatments licensed to GSK’s ViiV. Despite pharmaceuticals currently being exempt from reciprocal tariffs, a 25% sectoral tariff remains under review, with a Section 232 investigation launched by the U.S. Commerce Department on 01 April to assess national security risks tied to pharmaceutical imports. Market uncertainty persists over which products will be affected, complicating investment and operational planning. BMI and UBS analysts highlight continued inelastic demand for patented drugs, while concerns remain over cost distribution—whether borne by patients, insurers or manufacturers. The U.S. continues to push for greater access for innovative U.S. drugs in Japan. Globalised production, including shifts to Ireland and Singapore, has contributed to a growing U.S. pharmaceutical trade deficit, which now makes up 11% of the USD 1.2 trillion total. Japan also maintains pharmaceutical trade deficits with the U.S. and Europe, though analysts suggest Japan’s drug sector may not be central to Trump’s tariff agenda.

CHINA
Chinese state-backed funds halting new investments into US private equity 
(21 April 2025) Chinese state-backed funds, including China Investment Corporation (CIC), are halting new investments in U.S. private equity, driven by government pressure amid escalating trade tensions with the U.S. Multiple private equity executives confirmed that Chinese funds have withdrawn from allocating capital to U.S.-headquartered buyout firms and are also avoiding deals involving U.S. companies, even when led by non-U.S. firms. This policy shift follows U.S. tariff hikes on Chinese exports of up to 145%, and reciprocal Chinese tariffs of up to 125%. Some Chinese investors are reversing previously planned allocations that were not yet finalised. Historically, sovereign entities like CIC and the State Administration of Foreign Exchange have been among the largest investors in U.S. alternative assets, with approximately 25% of their USD 1.35 trillion and USD 1 trillion portfolios, respectively, allocated to this asset class as of 2023. Chinese funds had been major backers of firms including Blackstone, Carlyle, TPG, Vista, and Thoma Bravo, sometimes investing directly or via partnerships such as CIC’s joint fund with Goldman Sachs. The current investment freeze marks a significant reversal after decades of capital flow from Chinese sovereign wealth funds into U.S. private equity, which helped expand the industry to USD 4.7 trillion in assets under management. Global investors, including Canadian and European pension funds, are also reassessing their commitments due to the evolving geopolitical risk environment, according to statements from industry executives including Blackstone President Jonathan Gray.

AUSTRALIA
Australia mulls establishing AUD 1.2 billion critical minerals strategic reserve
(24 April 2025) Australian Prime Minister Anthony Albanese announced that, if reelected on 3 May, his government will establish a AUD 1.2 billion (USD 760 million) critical minerals strategic reserve. The reserve will purchase, stockpile, and sell domestically produced critical minerals, including rare earths, to strengthen economic resilience and national security. It will support domestic industries and allies by providing access to priority minerals during market or trade disruptions. Funding will be sourced by expanding the existing critical minerals facility, which has already allocated over AUD 1 billion to projects such as Iluka and Arafura. The reserve, set to be operational in the second half of 2025, will involve voluntary national offtake agreements and include a pricing mechanism to underwrite mining projects. Domestic availability and global sales are both planned revenue streams. The scheme follows industry lobbying for floor-price guarantees, with Citi noting positive market implications, especially for NdPr rare earth oxide. The reserve will also maintain modest, time-limited stockpiles based on strategic assessments. The move comes amid China’s dominance in mineral processing and recent export controls, and Australia’s efforts to position itself as a key supplier to low-carbon and defence industries. However, challenges remain in downstream processing due to cost and complexity, and existing tax credits for mineral processing are not effective until 2027.

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.

SINGAPORE
Singapore’s upcoming general election to focus on cost of living and job security 
(15 April 2025) Singapore’s general election on 03 May 2025 will be the first major electoral test for Prime Minister Lawrence Wong, who succeeded Lee Hsien Loong in May 2024. The ruling People’s Action Party (PAP), which has governed since 1965, is aiming to recover from its 2020 result of 61.2% of votes, down from 69.9% in 2015. The election will be contested across 97 parliamentary seats, with key voter concerns centring on cost of living (34% of respondents in a January Blackbox Research survey), job security, and economic resilience amid rising U.S. tariffs. Wong’s February budget included SGD 2 billion in household and wage support, viewed by analysts as election groundwork. The Workers’ Party, led by Pritam Singh—recently convicted for lying to a parliamentary committee—seeks to expand beyond its 10 current seats, while the Progress Singapore Party, founded by former PAP MP Tan Cheng Bock, campaigns on affordability and tax cuts. Eugene Tan of Singapore Management University noted rising appetite for opposition among younger voters and framed the vote as a key inflection point for Wong’s political future.

THAILAND, MALAYSIA
Thailand and Malaysia confirm collective ASEAN response to US tariffs
(17 April 2025) Prime Minister Anwar Ibrahim and Thai Prime Minister Paetongtarn Shinawatra confirmed a joint commitment to address U.S. tariffs at the ASEAN level through a fair and sustainable negotiation framework, following bilateral discussions held during Anwar’s two-day visit to Thailand. The leaders also reviewed bilateral economic initiatives, including advancing cross-border economic cooperation in northern Malaysia and southern Thailand. Bilateral trade surpassed USD 25 billion in 2023, with a target of USD 30 billion by 2027. A memorandum of understanding was signed concerning the construction agreement for the Rantau Panjang–Sungai Golok Bridge, which is on schedule. Discussions also covered peace in Thailand’s southern provinces, with Malaysia agreeing to cooperate on economic development projects such as halal food production and the Rubber City project. Paetongtarn emphasised ASEAN’s potential to act collectively on tariff-related issues, while acknowledging that each member state would continue with individual strategies.

ASEAN
Trump’s tariff threats prompts renewed calls to strengthen intra-ASEAN trade 
(15 April 2025) U.S. President Donald Trump’s imposition of 33% average tariffs on ASEAN nations has exposed the region’s dependence on global markets and prompted renewed calls to strengthen intra-ASEAN trade, which accounted for only 21% of total trade in 2024, according to ASEANstats. Malaysian Prime Minister Anwar Ibrahim, chairing ASEAN in 2025, urged regional economic self-reliance, but structural barriers persist, including nontariff measures, weak demand, and limited political coordination. Fitch Solutions estimates the tariffs could reduce Viet Nam’s GDP by up to 3 percentage points and Singapore’s by 1 point, with regional losses averaging 1.5 points. Despite tariff eliminations under the ASEAN Trade in Goods Agreement, the number of non-tariff measures more than doubled to 9,494 between 2008 and 2020, led by Thailand, the Philippines and Indonesia. ASEAN Business Advisory Council chair Nazir Razak highlighted the bloc’s lack of enforcement mechanisms and suggested intra-bloc trade may be structurally capped at 30%. Analysts warn of over-reliance on China, whose exports to ASEAN are growing, potentially worsening trade asymmetries, while compliance burdens may rise for firms to prove no Chinese links amid 145% U.S. tariffs on China. Industry voices stress the need for deeper regional integration through harmonised standards and investment in value chains. The ASEAN Economic Community and a proposed ASEAN Business Entity badge aim to address mobility barriers. The Philippines and Viet Nam are positioning to attract tariff-displaced investment, but relocation of capital-intensive manufacturing may take two to five years.

THE PHILIPPINES, UNITED STATES
Filipino officials claim country is less exposed to trade shocks
(14 April 2025) A Philippine delegation led by Special Assistant to the President for Investment and Economic Affairs Frederick Go will visit the United States in May to address potential U.S. tariffs on Filipino exports, with the administration framing the trip as diplomatic engagement rather than confrontation. The Economic Planning Secretary stated that the Philippines’ relatively small exposure to global trade, compared to its Asian neighbours, limits its vulnerability to external shocks. However, he stressed the urgency of enhancing export performance and investment conditions to benefit from trade diversion resulting from U.S. tariff measures. The Philippines is seeking a free trade agreement with the U.S. to preserve market access, building on existing pacts with South Korea and Japan. Balisacan affirmed that economic targets remain unchanged, citing resilient domestic consumption, which accounts for approximately 75% of GDP, as a growth driver. The government maintains its 2025 GDP growth forecast at 6.0% to 8.0%, with Balisacan calling the lower end of the range still achievable despite global uncertainty.

INDONESIA
Trade surplus projected to have narrowed to USD 2.64 billion in March 2025  
(17 April 2025) Indonesia’s trade surplus is projected to have narrowed to USD 2.64 billion in March from USD 3.12 billion in February, according to the median forecast of eight economists surveyed by Reuters. The expected decline is attributed to a 3.4% year-on-year contraction in exports, following 14.05% growth in February, and a 6.6% increase in imports, up from 2.3% the previous month, coinciding with higher domestic consumption during the Eid-al-Fitr festival. While Indonesia has maintained a monthly trade surplus since mid-2020, economists have cautioned that the current 90-day pause on U.S. tariffs may only temporarily delay negative impacts on Indonesian exports.

THAILAND
Bank of Thailand preparing to revise its GDP forecast downwards due to US tariffs
(17 April 2025) Thailand’s central bank is preparing to revise its GDP forecast downward at the 30 April Monetary Policy Committee meeting due to the expected impact of US tariffs, according to Assistant Governor Sakkapop Panyanukul. Growth is now projected to fall below the previously signalled 2.5%, with estimates indicating a potential reduction of up to one percentage point if the 36% levy is maintained beyond the current 90-day pause. The Bank of Thailand’s February 25-basis point rate cut had partially accounted for tariff effects; however, a further reassessment is planned, including inflation projections, which may ease further due to declining global commodity prices. The central bank, which has reduced rates by 50 basis points since October, is coordinating closely with the Finance Ministry, with Thailand’s Finance Minister set to lead negotiations in the US beginning 23 April. Prime Minister Paetongtarn Shinawatra has proposed increasing imports of US commodities and lowering import restrictions to mitigate the trade impact. Financial markets have experienced high volatility following the 02 April tariff announcement, with the baht fluctuating between a five-month low and a six-month high, and the stock index briefly hitting a five-year low. The BOT has intervened to manage excessive baht volatility but views currency movements as consistent with regional trends. Foreign exchange reserves stand at USD 247 billion and are considered well diversified despite rising US Treasury yields.

MALAYSIA
GDP grows 4.4% year-on-year in Q1 2025, below 4.8% median forecast
(18 April 2025) Malaysia’s GDP grew 4.4% year-on-year in Q1 2025, below the 4.8% median forecast and marking the third consecutive quarter of slowing growth, driven by weaker performance in manufacturing, construction, and a 4.9% contraction in mining and quarrying. The services sector remained the primary contributor to growth, expanding 5.2%, though also at a slower pace than the previous quarter. Advance estimates from the statistics department indicated that seasonal factors, including Chinese New Year, Ramadan preparations, and the school reopening, supported activity. Employment remained strong, with the unemployment rate stable at 3.1%. The government is reviewing its 4.5%-5.5% growth forecast for 2025 amid uncertainty from global trade tensions, particularly following a 24% US import tariff, later reduced to 10% for 90 days. Bank Negara Malaysia is maintaining its policy stance for now, with the last rate move being a 25-basis-point hike in May 2023, but analysts suggest easing may be considered if growth drops towards 3% in H2. Malaysia’s Investment Minister stated that Malaysia is engaging with the US to reduce tariffs and expand exemptions. Regional peers, including the Philippines and Singapore, have already eased monetary policy in response to global trade risks. Malaysia recorded 5.1% GDP growth in 2024, in line with official forecasts and above 2023 levels.

RCEP Monitor

CHINA
GDP grows 5.4% in Q1 2025, surpassing 5.2% forecast  
(16 April 2025) China’s GDP grew 5.4% year-on-year in Q1 2025, surpassing the 5.2% forecast, driven by stronger-than-expected March data including a 7.7% rise in industrial output and a 5.9% increase in retail sales. The National Bureau of Statistics attributed the growth partly to front-loaded exports in anticipation of US tariffs. However, the economic outlook has worsened following President Trump’s imposition of 145% tariffs, which are expected to significantly reduce US-China trade from April onwards. Economists warned of a rapid downturn without urgent stimulus, citing early signs of falling US-bound shipments. The government has acknowledged external risks and weak domestic demand, and released a 48-point plan in March to boost consumption in services sectors such as catering, healthcare, entertainment and tourism. A Politburo meeting later in April may signal the scale and timing of further stimulus. Despite early momentum, economists at UBS, Goldman Sachs, Citigroup and Societe Generale have revised 2025 growth forecasts to around 4%, below the official 5% target. Measures under consideration include interest rate cuts, reserve ratio reductions, and trillions of yuan in new fiscal borrowing. Markets reacted negatively to tariff concerns, with Hong Kong-listed Chinese stocks falling up to 2.9%. No high-level US-China talks have occurred, and President Xi has not responded to Trump’s requests for negotiations.

CHINA
New-home prices in China’s 70 major cities decline 0.08% in March from February  
(16 April 2025) New-home prices in China’s 70 major cities declined 0.08% in March from February, easing from a 0.14% fall the prior month, while existing-home prices fell 0.23%, the smallest drop in nearly two years, according to National Bureau of Statistics data. Year-on-year, new-home prices declined 4.99% and existing-home prices 7.25%, both moderating from February. Residential sales by value fell 0.4% year-on-year in March, but private data indicated an 11% decline in new home sales by China’s 100 largest developers. Property investment dropped 9.9% in Q1. The deputy NBS head confirmed policy effects were beginning to stabilise the housing market, though overall demand remains subdued. Analysts expect further support measures in Q2 amid escalating external risks, notably the 145% US tariffs imposed by President Trump. Goldman Sachs estimated 20 million Chinese workers—around 3% of the labour force—may be exposed to US-bound exports, raising concerns of broader economic strain.

JAPAN, SOUTH KOREA
Japanese and Korean steel exports to US decline following US tariffs  
(17 April 2025) Japanese steel exports to the United States declined 16.6% year-on-year in March, while South Korea’s fell 24%, following the 25% U.S. tariffs imposed on March 12. Total Japanese iron and steel exports dropped 8.2% during the month, compared to a 14.1% decline for South Korea, according to Japan’s Ministry of Finance. Despite this, Japan’s overall exports rose 3.9%, marking six consecutive months of growth, attributed to front-loading ahead of U.S. tariff enforcement. Vehicle exports increased 7.2%, and chipmaking equipment exports rose 4.2%. A 10% baseline tariff on Japanese goods took effect on 05 April, while an additional 24% ‘reciprocal tariff’ announced in early April is on hold for 90 days. Separately, a 25% U.S. tariff on imported vehicles from 03 April targets Japan, which supplied 13% of U.S. vehicle imports in 2024. Japan’s imports increased 2.0% year-on-year in March, resulting in a trade surplus of JPY 544 billion (USD 3.8 billion). Moody’s Analytics noted that front-loaded exports may mask underlying weakness, with expectations for significant declines ahead due to worsening global trade conditions.

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
Southeast Asian economies among hardest hit by Trump’s new tariffs
(03 April 2025) The United States has imposed unexpectedly high tariffs on six Southeast Asian countries, with Viet Nam and Cambodia receiving the highest rates at 46% and 49% respectively. Thailand was hit with a 37% tariff, exceeding the 11% it had anticipated. These tariffs, significantly above those for the EU (20%), Japan (24%), and India (27%), threaten regional economies that had benefited from the China+1 strategy. Viet Nam, where exports to the U.S. totalled USD 142 billion in 2024 (nearly 30% of GDP), has seen its stock index drop 6.7% and its currency reach an all-time low. Viet Nam’s Trade Minister sent a diplomatic note to the U.S. and is seeking talks, while Prime Minister Pham Minh Chinh convened an emergency cabinet meeting and launched a task force. ING estimates that 5.5% of Vietnam’s GDP is at risk. Thailand, facing 3% GDP exposure, has also committed to negotiations. Malaysia, facing a 24% rate, will likewise pursue dialogue without retaliatory measures. On 10 April, Trump announced a 90-day pause on ‘reciprocal’ tariffs on countries who had not retaliated in order to allow ongoing negotiations to continue. During this time, the universal baseline tariff of 10% will remain in place.

THAILAND
Bill legalising casinos to be delayed as opposition mounts
(08 April 2025) Thailand has delayed parliamentary debate on the integrated entertainment business bill, which includes legalising casinos, amid prioritisation of responses to the recent 36% U.S. tariff and last month’s earthquake in Bangkok. The bill, endorsed by the cabinet in March, limits casinos to 10% of integrated complex space and proposes entry restrictions for Thai citizens, including proof of THB 50 million in bank deposits. Opposition parties and civil groups have criticised the bill for favouring large corporations and bypassing sufficient public consultation. Thailand’s Prime Minister confirmed the bill will not be withdrawn but deferred to the next parliamentary session. She stated that casinos would only be located in approved resorts and that the government will continue public communication to address concerns. Finance ministry officials project each complex could attract THB 100 billion in investment and create 20,000 jobs, increasing foreign tourist spending by 40%.Licences would require THB 10 billion in paid-up capital, with a 30-year permit priced at five billion baht initially and one billion baht annually thereafter. Target locations for complexes include Bangkok, Chiang Mai, and Phuket.

VIET NAM, SPAIN
Viet Nam and Spain commits to strengthening economic cooperation amidst rising trade tensions
(09 April 2025) Viet Nam and Spain committed to strengthening economic and defence cooperation during Spanish Prime Minister Pedro Sanchez’s visit to Hanoi, as both countries face newly imposed U.S. tariffs—46% on Vietnamese exports and 25% on EU goods. Viet Nam’s Prime Minister Pham Minh Chinh expressed intent to elevate bilateral relations to a comprehensive strategic partnership. Both leaders emphasised support for multilateralism, rules-based international order, and opposition to trade conflicts. Spain signalled interest in expanding investment in Viet Nam, particularly in railway infrastructure, citing experience from its high-speed rail network. Vietnam is pursuing major railway projects, including a proposed 1,541 km high-speed line between Hanoi and Ho Chi Minh City, and connections to China.

INDONESIA, UNITED STATES
Indonesia announces series of import tax reductions on US goods
(08 April 2025) Indonesia has announced a series of import tax reductions on US goods—including steel, mining products, health equipment, electronics, mobile phones and laptops—as part of a broader effort to negotiate relief from a new 32% US tariff set to take effect on 09 April. Indonesia’s Chief Economic Minister, who will lead a high-level delegation to Washington next week, stated that Indonesia also plans to increase imports of US liquefied petroleum gas, liquefied natural gas, and soybeans. Indonesia’s Finance Minister confirmed reductions in US import tariffs to a 0–5% range from previous rates of 5–10%, and cuts in import tax on electronics from all countries to 0.5% from 2.5%. The measures were disclosed during a high-level policy meeting attended by President Prabowo Subianto, senior ministers, the central bank governor, and financial authorities. Indonesia recorded a USD 16.8 billion trade surplus with the US in 2024, with exports valued at USD 26.3 billion, primarily comprising electronics, apparel, and footwear. The Chief Economic Minister stated that the tariff impact on Indonesia would be limited, noting US exports represent only 2.2% of national GDP. He also suggested that Indonesia could replace Viet Nam and other Asian economies as a supplier to the US under the revised trade regime. President Prabowo remarked that the tariffs underscored the strategic need for national economic self-reliance. The government is also reviewing a potential reduction in local content requirements for US tech and communications firms and may increase US imports for an oil refinery project.

MALAYSIA
Malaysia announces commitment to develop border areas with Thailand and Indonesia 
(08 April 2025) Malaysian Prime Minister Anwar Ibrahim announced commitments to develop border areas with Thailand and Kalimantan in Indonesia to strengthen ASEAN cooperation and stimulate cross-border economic activity, citing the Johor-Singapore Special Economic Zone (SEZ) as a model. Speaking at the ASEAN Investment Conference 2025, held alongside the 12th ASEAN Finance Ministers’ and Central Bank Governors’ Meeting, Anwar emphasised infrastructure investment as essential for regional resilience against climate change and natural disasters. He identified technologies such as carbon capture, circular production, and low-emission innovation as critical to ASEAN’s future industrial landscape.

THE PHILIPPINES
Bangko Sentral ng Pilipinas reduces key rate amidst slowing inflation
(10 April 2025) The Bangko Sentral ng Pilipinas reduced its target reverse repurchase rate by 25 basis points to 5.5% on 10 April, marking a resumption of monetary easing amid heightened global uncertainty linked to new US tariff policies. The decision, anticipated by 26 of 28 economists in a Bloomberg survey, follows a period of stability after three previous cuts. The move comes as US President Donald Trump imposed a 17% tariff on US imports from the Philippines—lower than the rates applied to Indonesia, Malaysia, and Viet Nam—before announcing a 90-day pause and setting a base tariff rate of 10% for most countries, while raising duties on China to 125%. The BSP cited increased uncertainty over global economic policies despite inflation in March easing to a five-year low. In March, the central bank also lowered banks’ reserve requirement ratio, releasing approximately PHP 300 billion (USD 5.2 billion) into the financial system. The April rate cut is intended to support market confidence and domestic growth against a volatile external backdrop.

LAO PDR
Lao PDR’s GDP forecast to grow by 4.0% in 2026 according to ADB
(10 April 2025) According to the Asian Development Bank, Lao PDR’s GDP is forecast to grow by 3.9% in 2025 and 4.0% in 2026, driven mainly by logistics and tourism services, while macroeconomic pressures persist. The kip stabilised in late 2024 following tightened monetary policy, with an annual depreciation of 5.4% against the US dollar and a 1.2% appreciation against the Thai baht. Inflation averaged 23.3% in 2024, driven by high food, alcohol, restaurant, and hotel prices, but is projected to ease to 13.5% in 2025 and 10.4% in 2026. Increased electricity tariffs from March 2025 are expected to exert upward price pressure. Export values in electricity, minerals, and agriculture are set to rise, though agriculture will face climate-related constraints and labour shortages. The 2025 budget targets a 1.0% GDP deficit, with revenue projected to grow 36% to LAK 68.1 trillion and expenditure by 19.1% to LAK 71.8 trillion, supported by tax reforms and administrative improvements. Foreign currency-denominated debt and US tariff hikes remain key external risks, potentially impacting Lao PDR directly and indirectly via neighbouring trading partners.

RCEP Monitor

JAPAN
Commodity-related stocks record steep losses amid concerns over global recession
(08 April 2025) Japan’s commodity-related stocks, particularly nonferrous metals and oil and coal product sectors, have recorded steep losses amid concerns over a global recession triggered by U.S. President Donald Trump’s new tariff regime. The Topix nonferrous metals index dropped 13% on Monday and remains over 10% lower than levels at the beginning of the month. The oil and coal sector index fell more than 20%, while banking stocks posted the second-largest decline, linked to expectations that the Bank of Japan may not proceed with further interest rate hikes. The broader Topix index declined 14% over the same period. Market rebound on 08 April partially recovered earlier losses, but analysts warned the recovery may be temporary. Under Trump’s new policy, a baseline 10% tariff was introduced on 05 April, with country-specific higher rates commencing 09 April. China has announced retaliatory tariffs of 34% beginning 10 April and threatened further escalation. In response, Malaysia is coordinating an ASEAN-level reaction. Defensive stocks in sectors such as land transport, food retail, and pharmaceuticals have shown relative resilience, each declining less than 10%.

CHINA
Onshore Chinese yuan falls to 19-month low after central bank set its reference rate weaker
(08 April 2025) The onshore Chinese yuan fell to 7.34 per U.S. dollar on 08 April, its weakest level since September 2023, following the People’s Bank of China’s (PBOC) decision to set its reference rate at 7.2038, compared to 7.198 the previous day. The offshore yuan dropped to approximately 7.352. The PBOC’s weaker fix signals a potential shift in policy to allow the currency to depreciate in response to rising U.S. tariffs. This follows U.S. President Donald Trump’s threat to impose an additional 50% tariff on China unless it withdraws retaliatory measures. Analysts view the move past the 7.2 threshold as a more proactive stance by the PBOC, although sharp depreciation is deemed unlikely due to capital outflow risks. The PBOC is expected to maintain currency stability while preparing for potential monetary easing. Analysts are monitoring for possible interest rate cuts and further easing to mitigate expected pressure on exports.

SOUTH KOREA
South Korea announces USD 2 billion emergency support package for automobile sector  
(09 April 2025) South Korea has announced a USD 2 billion emergency support package in response to U.S. President Donald Trump’s imposition of a 25% tariff on South Korean automobiles and auto parts, a sector which accounted for USD 42.9 billion in exports to the U.S. last year. The government warned of significant impact on the auto industry and committed to “flexible action” based on evolving damage assessments. Key measures include a KRW 2 trillion expansion of low-cost financing for auto firms, a KRW 1 trillion support programme led by Hyundai Motor and financial institutions, and tax deferrals of up to nine months for affected companies. To strengthen the domestic market, the government will operate an electric vehicle subsidy system tied to manufacturer discounts and will raise its matching support ratio from 20–40% to 30–80%. The initiatives aim to safeguard the country’s manufacturing base amid reduced export volumes. Trump discussed the tariffs with South Korea’s acting president, but uncertainty persists over whether the tariffs are a permanent measure or a negotiating tactic. The U.S. trade deficit with South Korea in goods reached over USD 66 billion in 2024.

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
Thailand’s economic outlook worsens following Myanmar earthquake
(31 March 2025) Thailand’s economic outlook has worsened following the Myanmar earthquake, which killed at least 1,700 in Myanmar and 18 in Bangkok, with 70 workers missing in the latter after a building collapsed. The Stock Exchange of Thailand fell 1.7% on Monday, led by declines in property and financial shares. Kasikorn Research estimates an immediate economic impact of THB 20 billion (USD 590 million), primarily from reduced consumer spending. Analysts expect the Bank of Thailand (BOT) to consider another interest rate cut at its 30 April meeting, following reductions in February and October. Standard Chartered and Citi Research highlighted that the BOT’s “outlook-dependent” policy stance increases the likelihood of easing, while the central bank has urged financial institutions to provide relief to disaster-affected borrowers. BOT officials stated that while the earthquake’s impact on tourism and consumption is expected to be short-term, the property sector may face longer-term pressure due to safety concerns. The Thai Hotels Association forecasts a 10%–15% decline in international tourist arrivals over the next two weeks. The finance ministry maintains that economic fundamentals remain strong, targeting 3% growth in 2024, while the property market’s recovery may be delayed due to unsold condominiums and earthquake-related fears.

ASEAN
Japanese expats leave Southeast Asia, replaced by local hires
(02 April 2025) The number of Japanese expatriates in Southeast Asia has declined, with Japan’s Ministry of Foreign Affairs reporting a 14.7% drop in Thailand to 70,421 between 2021 and October 2024, and sustained declines in Indonesia, the Philippines, Viet Nam, and Malaysia. Mercer Japan attributes this trend to companies increasingly relying on local managers for market adaptation, a shift from the traditional three-to-five-year expat assignments. Rising regional incomes and dual-income households in Japan have also reduced overseas postings, as partners are reluctant to interrupt their careers. A survey by staffing firm Uzuz found that 52.7% of 1,118 respondents did not want to work abroad, citing language concerns and reluctance to leave home. Transfers within Southeast Asia, such as Singaporean staff moving to Thailand, are becoming more common under global HR strategies. Factory closures by Suzuki, Nissan, and Honda in Thailand may impact future expatriate numbers, but the Annual Report of Statistics on Japanese Nationals Overseas states these closures have not significantly contributed to the decline. Despite fewer Japanese expatriates, the number of Japanese corporate offices in Southeast Asia is increasing, according to Japan’s Ministry of Foreign Affairs.

ASEAN
Southeast Asian stock markets suffer drops following new US tariffs
(03 April 2025) Viet Nam’s main stock index fell 6.7% on 03 April, its sharpest one-day drop since September 2001, as Southeast Asian markets declined following new US tariffs. Around 70% of shares on the Ho Chi Minh Stock Exchange hit the 7% daily loss limit, with Bank for Investment & Development of Vietnam and Bank for Foreign Trade of Vietnam among the largest drags. The US imposed tariffs of 46% on Vietnamese exports, 36% on Thai exports, and 32% on Indonesian exports, while China now faces a cumulative 54% tariff. Investors had expected lower tariffs, prompting panic selling. Singapore stocks recovered some losses after being hit with a 10% tariff, and its dollar strengthened alongside the Philippine peso. Southeast Asia’s sovereign debt insurance costs rose, with credit-default swaps widening by the most in 19 months, while Indonesia’s five-year CDS reached its highest level since October 2023. The region’s currencies remained volatile, with the rupiah down 2.8% this year. China opposed the US tariffs and pledged countermeasures, raising trade tensions. Markets await potential retaliatory moves from affected nations.

LAO PDR
Lao PDR sets targets for energy and mining sectors, including increasing its contribution to 25% of GDP
(02 April 2025) Lao PDR’s Prime Minister Sonexay Siphandone has set targets for Lao PDR’s energy and mining sector, aiming for it to contribute 25% of GDP and maintain annual growth of 10%–12%. Speaking at the annual sector meeting on 31 March, he called for reforms to maximise economic benefits, reduce Electricité du Laos’ (EDL) debt, and enforce responsible mining. Strategic objectives include enhancing law enforcement and governance, developing viable power projects, expanding transmission networks for domestic and export use, and implementing balanced electricity pricing. Sonexay stressed the need for financial stability at EDL, strengthening grid infrastructure to attract investment, and enforcing sustainable mineral resource management. He urged deeper engagement with ASEAN, international organisations, and financial institutions to secure support, alongside increased foreign investment and technological expertise. Stakeholders were called to coordinate efforts in power generation, transmission, and market development to ensure energy security. He reiterated that the sector must drive Lao PDR’s economic transformation by 2030 and serve as a foundation for industrial growth while maintaining sustainability.

VIET NAM, LAO PDR
Viet Nam and Lao PDR aim to strengthen trade and investment ties through exhibition
(03 April 2025) The 5th Exhibition of Ho Chi Minh City and Friendship Provinces and Cities in Savannakhet is taking place from 2 to 6 April, with the aim of strengthening Viet Nam-Lao PDR trade and investment ties. The deputy head of Ho Chi Minh City’s National Assembly deputy delegation underscored the event’s importance in fostering business partnerships. Savannakhet’s Vice Governor highlighted the exhibition’s role in trade expansion and market promotion. The expo features 250 booths, drawing over 50 enterprises from seven Lao provinces and Vietnamese businesses from Australia, Thailand, Lao PDR, and Cambodia. More than 130 companies from Viet Nam’s Quang Bình, Quang Tri, Long An, Gia Lai, and Ho Chi Minh City are showcasing products such as handicrafts, jewellery, wooden furniture, home decor, agricultural goods, and food. A key event is the Lao PDR-Viet Nam Trade and Investment Promotion Conference, focused on business networking, investment policy discussions, and priority sector insights to deepen economic cooperation.

CAMBODIA
Trump’s tariffs could diversify FDI sources for Cambodia
(03 April 2025) Dr Jayant Menon, visiting senior fellow at ISEAS-Yusof Ishak Institute, stated that US President Donald Trump’s newly announced tariffs could shift the trade war’s focus from “Made in China” to “Made by China,” potentially affecting Cambodia through supply chain disruptions. He noted that the additional 10% tariffs would negatively impact Chinese exports and Southeast Asian economies linked to the electronics supply chain. While previous tariff measures led Chinese firms to relocate production to Southeast Asia, Trump’s new approach—targeting ownership rather than location—may reduce the likelihood of Cambodia benefiting from redirected Chinese FDI. However, non-Chinese FDI currently based in China or Viet Nam may seek diversification, which could reduce Cambodia’s dependence on a single country. Menon stressed that economic diversification is critical for Cambodia, as its early-phase shift from agriculture to industry is nearing its limit. Future diversification must come from intra-sectoral specialisation, requiring government intervention. He identified two major constraints: limited human capital with skill mismatches and high business costs due to infrastructure, energy, and financing issues. Menon emphasised the need for enhanced education, vocational training, and collaboration with the private sector to improve workforce skills and reduce business costs.

THE PHILIPPINES
The Philippines positioning itself to benefit from relatively lower US tariffs
(03 April 2025) The Philippines is positioning itself to benefit from relatively lower US tariffs, with the country’s Trade Secretary seeking discussions with her US counterpart to enhance economic ties. President Donald Trump’s executive order set a tariff of 18% on Philippine exports, revised from an earlier 17%, the second lowest in Southeast Asia after Singapore’s 10%, and significantly lower than Viet Nam’s 46% and Thailand’s 37%. Key Philippine exports such as copper ores, integrated circuits, and coconuts are either exempt or face lower tariffs than regional competitors. The Philippines’ Finance Secretary noted the potential for expanding garment and coconut-based product exports to the US, as major competitors like China, Bangladesh, and Viet Nam face higher tariffs. The US accounted for 17% of Philippine exports in 2023, with electronic products comprising more than half. The government’s initial assessment suggests the direct impact of tariffs will be less severe than for other ASEAN nations. The country is also exploring market access improvements for key exports, including automobiles, dairy, frozen meat, and soybeans, under a potential bilateral free trade agreement. US-Philippines trade reached USD 23.5 billion in 2024, with the US trade deficit rising 22% to USD 4.9 billion.

RCEP Monitor

AUSTRALIA-CHINA
Australian businesses remain cautious with Chinese market due to geopolitical uncertainties
(02 April 2025) The chairman of the Australia China Business Council, stated that despite renewed optimism in trade relations, Australian businesses remain cautious due to geopolitical uncertainties and the possibility of Beijing reinstating trade barriers. Speaking at the Boao Forum for Asia, he highlighted the importance of balancing economic ties with China while recognising risks. The CEO of Fortescue Metals noted that demand for critical minerals would surpass geopolitical tensions, with Australian mining firms maintaining strong ties with Chinese counterparts. However, heightened scrutiny of foreign investment, driven by national security concerns and alliances such as AUKUS, has slowed Australian initiatives like the energy transition, which requires Chinese technology and capital. Australian businesses are now focusing on diversification, acknowledging that overreliance on China is risky. Some have pointed to new opportunities in the Chinese market including renewable energy and services, the latter of which include elderly healthcare and sports infrastructure. There have also been warnings against siloed trade policies, emphasising the benefits of open markets. China’s experience in diversifying away from the US during past trade disputes may mitigate future risks.While Australia seeks increased foreign investment, regulatory scrutiny remains a challenge.

SOUTH KOREA
South Korea lift its 17-month short-selling ban on 31 March 2025
(31 March 2025) South Korea will lift its 17-month short-selling ban on 31 March 2025, reopening its USD 1.7 trillion market to hedge funds and global investment banks. The move is expected to boost liquidity and support the country’s bid for an MSCI upgrade to developed market status. Firms including Pictet Asset Management and Amundi SA plan to increase investments, while Citigroup raised its Kospi target by 4%, viewing the resumption as a market catalyst. Short selling accounted for 5% of Kospi turnover before the November 2023 ban, which was implemented due to unlawful naked short selling. A new electronic monitoring system to detect such trades will launch alongside the ban’s removal. Franklin Templeton expects near-term volatility but sees potential long-term gains if corporate governance improves under the “Value-up” initiative. Foreign investors have sold USD 20 billion in South Korean stocks since August, and the government may accelerate MSCI upgrade efforts, with potential watchlist inclusion by June 2025 or 2026. The convertible bond market, which declined during the ban, may see renewed activity. Major short-selling targets include Samsung Electronics, due to concerns over its technological leadership, as well as EV battery makers Samsung SDI, Ecopro, and Posco Future M. Goldman Sachs analysts predict a possible short squeeze in the sector.

CHINA, MALAYSIA
Chinese AI ambitions fueling expanding Malaysian data centre sector
(03 April 2025) Malaysia’s data centre capacity has nearly doubled since 2021, reaching 504.9 megawatts in 2024, with further expansion driven by Chinese tech firms seeking offshore facilities for AI training and data storage. YTL Corporation’s new 605-megawatt data centre park, set to begin operations in May, will contribute to this growth. Malaysia’s low operating costs—30% cheaper than Singapore—along with access to US-designed microchips, have made it a strategic hub for Chinese AI firms facing US export restrictions. Major investors include Alibaba Cloud and ByteDance, with Chinese firms using Malaysia’s data centres for e-commerce, social media, and AI applications. The region’s AI-driven demand for data centres is expected to rise, supporting industries like smart home devices, drones, and autonomous vehicles. However, geopolitical risks remain, with potential US regulations limiting Chinese access to Southeast Asian computing power. Malaysia’s environmental challenges include resource-intensive cooling needs and concerns over sustainable power sources, leading Johor to reject some new data centre applications.

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 records 17.5 million international arrivals in 2024, ranking third in Southeast Asia 
(25 March 2025) Viet Nam recorded 17.5 million international arrivals in 2024, surpassing Singapore and ranking third in Southeast Asia behind Malaysia (25 million) and Thailand (35 million). It leads the region in tourism recovery, regaining 98% of its pre-pandemic levels, ahead of Thailand (87.5%) and Singapore (86%). In January and February 2024, 4 million international tourists visited, a 30.2% year-over-year increase, according to the Vietnam National Authority of Tourism. Key growth factors include Vietnam Airlines’ first nonstop US route (San Francisco–Ho Chi Minh City, launched in 2021), expanded electronic visa policies from 2023 allowing 90-day stays, and visa-free entry for over a dozen countries. Security concerns in Thailand have driven more Chinese visitors to Viet Nam. The country aims for 23 million international arrivals in 2025, with Long Thanh International Airport opening by March to raise capacity to 25 million. By 2030, Viet Nam seeks to surpass Malaysia, leaving Thailand as its primary competitor in regional tourism.

VIET NAM, UNITED STATES
Viet Nam to reduce tariffs on several US products to improve trade balance
(26 March 2025) Viet Nam will reduce tariffs on several US products as part of efforts to improve trade balances. The tariff on US liquefied natural gas will drop from 5% to 2%, on automobiles from 45%–64% to 32%, and on ethanol from 10% to 5%. Vietnam will also eliminate tariffs on US ethane. The decree formalising these cuts is expected within the month and will take effect immediately. Viet Nam’s trade surplus with the US exceeded USD 123 billion in 2023. The cuts align with its Comprehensive Strategic Partnership with the US and recent measures to address its trade surplus. US President Donald Trump has announced an 02 April decision on reciprocal tariffs targeting trade partners with high surpluses, referring to the date as a “Liberation Day” for the US economy. The US Treasury Secretary has indicated that the focus will be on the “Dirty 15” economies with the highest goods trade surpluses with the US. The US Census Bureau lists Viet Nam among these economies, along with China, the EU, Mexico, Taiwan, Japan, South Korea, and others. White House officials have warned that early tariff reductions may not guarantee exemption from new US tariffs, as factors such as non-tariff barriers and currency policies will also be considered. The Office of the United States Trade Representative has sought public input on reciprocal tariffs, focusing on countries that collectively account for 88% of total US goods trade.

MALAYSIA, UNITED STATES
United States expected to impose tariffs on several Malaysian exports
(27 March 2025) The US is expected to impose tariffs on Malaysia’s electrical and electronics (E&E), rubber, furniture, and optical and scientific equipment exports, which are among the most vulnerable sectors, according to UOB. E&E exports account for 40% of Malaysia’s total exports, making it the third-largest Asian supplier of electrical machinery to the US. Rubber, furniture, and optical and scientific equipment exports to the US represent 2.9%, 3.5%, and 9% of Malaysia’s total exports, respectively. Malaysia ranks 15th on the US trade deficit list with a USD 24.8 billion (MYR 109.9 billion) deficit. The tariffs stem from the America First Trade Policy executive order, signed by Trump on 20 January 2024, which initiated trade investigations based on trade deficits and economic security. UOB expects retaliatory measures from major economies but notes Malaysia is unlikely to respond with countermeasures. The final tariff structure will depend on Malaysia-US negotiations and proactive policy responses. Trump’s trade strategy, aimed at reshoring US manufacturing, is expected to be more aggressive, with scope for negotiations but limited chances of full tariff removal.

MALAYSIA
Increasing pressure on Malaysia’s external balance forecasted due to slowing export growth and US tariffs  
(28 March 2025) ANZ forecasts increasing pressure on Malaysia’s external balance due to slowing export growth and potential US tariff hikes, which could weaken the ringgit. The currency, stable since early 2025 after strong appreciation in 2024, may depreciate to 4.60 against the US dollar by year-end. The FBM KLCI remains 6% below its 2024 close amid continued foreign equity outflows. Malaysia’s trade and current-account surpluses provide some currency support, with the current-account surplus projected to remain at 1.7% of GDP. However, the balance of payments surplus may narrow to 0.5% of GDP in 2025 from 0.8% in 2024. Lower foreign investment approvals in 2024 suggest weaker foreign direct investment inflows, while global financial market volatility points to a moderate financial account surplus. The government is relying on domestic demand, supported by household spending and business investment, to offset external risks. Bank Negara Malaysia has maintained its 2025 GDP growth forecast at 4.5%–5.5%, despite increasing trade uncertainties.

MALAYSIA, SINGAPORE
Companies investing in JS-SEZ may receive additional incentives beyond standard tax breaks  
(27 March 2025) Companies investing in the Johor-Singapore Special Economic Zone (JS-SEZ) may receive additional incentives beyond standard tax breaks, including talent incentives and import duty exemptions, depending on their economic impact. Investors in the 3,571 sq km zone already qualify for a 5% tax rate for up to 15 years on new manufacturing investments exceeding MYR 1 billion (USD 226 million). The Malaysian government will evaluate projects based on their strategic value, employment creation, and local business impact. South Korean dental implant company Onecera is considering a USD 10 million investment in JS-SEZ for manufacturing, citing lower costs compared to Singapore. The Korea-Asean Business Forum in Seoul, organised by UOB, Kim & Chang, and PwC, highlighted rising South Korean investments in Southeast Asia, which reached USD 10.9 billion in 2023, making South Korea the sixth largest investor in the region. UOB has opened its 11th foreign direct investment advisory centre in Seoul, supporting Korean companies expanding into ASEAN. Since 2011, UOB has facilitated over 150 Korean companies’ investments in Southeast Asia, totalling nearly SGD 3 billion. ASEAN’s growing middle class and strategic market have made it appealing for South Korean businesses.

INDONESIA
Hari Raya homecoming travel expected to decline by 24% in 2025 due to economic slowdown  
(28 March 2025) Indonesia’s Hari Raya homecoming travel is expected to decline by 24% in 2025, with 146.48 million travellers compared to 193.6 million in 2024. Indonesia’s Transport Minister attributed the drop to rising ticket prices, economic slowdown, and widespread industrial layoffs. Domestic flight prices surged, with Jakarta-Padang fares increasing from IDR 1.2 million to IDR 6 million since the start of Ramadan. Layoffs affected 60,000 workers in January and February, according to the Indonesian Trade Union Confederation. The government has introduced discounts on flights, toll fees, and shopping, along with food price stabilisation measures. It has also allocated IDR 50 trillion in religious allowances for three million civil servants and recommended a 20% holiday bonus for four million gig economy motorcycle riders. Gojek and Grab have provided bonuses under specific conditions. Household consumption, contributing 54.04% to GDP in 2024, has slowed, with Ramadan spending growing only 5%–7%, compared to 9%–12% in previous years. February’s Consumer Price Index fell by 0.09% year-on-year, the first recorded deflation since 2000. Weak demand, falling food prices, and layoffs have been attributed as key factors behind declining purchasing power.

THE PHILIPPINES
Bangko Sentral ng Pilipinas on track to resume rate cuts in April
(25 March 2025) The Bangko Sentral ng Pilipinas (BSP)’s Governor stated that the central bank is on track to resume rate cuts in April, with a likely 25-basis-point reduction, and total cuts could reach 75 basis points in 2025 depending on economic data. Inflation has remained within the BSP’s 2%-4% target for seven consecutive months, and the Philippine peso has gained nearly 1% against the US dollar this month, easing pressure for currency market intervention. Remolona confirmed that the BSP has been intervening less in foreign exchange markets in recent months. A 200-basis-point reduction in the reserve requirement ratio (RRR) for big banks will take effect on Friday, lowering it to 5% and injecting billions of dollars into the financial system. The BSP aims to reduce the RRR to zero over time while managing liquidity risks. Despite keeping the benchmark interest rate unchanged in February due to global uncertainties, the central bank continues its easing cycle. Remolona noted “somewhat more upside risk than downside risk” for inflation in 2025 and 2026. The last rate cut occurred in December before an unexpected pause in February.

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
Share of local pop music in Southeast Asia’s streaming market increasing
(16 March 2025) The share of local music in Southeast Asia’s streaming market is increasing, driven by lower production and distribution costs, rising middle-income consumers, and social media promotion. In Indonesia, homegrown music accounted for 35% of on-demand streaming in 2023, up 12 percentage points from 2020, while U.S. music declined by 5 points to 26%, and K-pop fell from 12% to 8%, according to Luminate. A similar trend is seen in Thailand, where local “T-pop” groups like 4EVE and Proxie are gaining traction. Thai and Indonesian music is also popular in neighboring countries such as Cambodia, Laos, Myanmar, and Vietnam, with Thai drama theme songs becoming regional hits. Migrant workers contribute to the spread of these cultural influences. Japanese music has a 2% share in Indonesia and Thailand’s streaming market, compared to under 1% in the U.S. and U.K. PwC forecasts the Asian music market will grow 20% to USD 20.8 billion by 2028. Indonesia’s per-capita GNI reached USD 4,810 in 2023, a 5.5-fold increase over two decades, while Thailand’s rose 3.3 times to USD 7,200, placing both in the World Bank’s upper-middle-income category.

MALAYSIA
Malaysian state-linked funds to increase investments into local startups
(17 March 2025) Malaysia’s state-linked funds Employees Provident Fund, Khazanah Nasional, and Permodalan Nasional Berhad will allocate an additional MYR 120 billion (USD 27 billion) to private companies, including startups, over five years. The funds, which collectively manage MYR 1.7 trillion in assets, typically allocate MYR 440 billion annually to domestic investments. The initiative aims to reduce reliance on foreign direct investment (FDI) and strengthen economic resilience by focusing on high-growth sectors such as technology and infrastructure. Malaysia secured MYR 378.5 billion in approved FDI in 2023, up 14.9% year-on-year, though future FDI inflows face uncertainties. The economy expanded by 5.1% in 2024, driven by household spending, and the stock market saw increased IPO activity. The government seeks to diversify economic drivers through investments in semiconductors, artificial intelligence, and data centres while maintaining focus on traditional sectors like tourism. Supply chain realignments continue to favour Malaysia, reinforcing its role in global trade.

THAILAND
Thailand to ease restrictions on alcohol sales and advertising 
(20 March 2025) Thailand’s House of Representatives approved amendments to the alcohol control bill, easing restrictions on sales and advertising, with Senate approval still pending. The bill revokes a 1972 ban on alcohol sales between 11:00 – 14:00 and 17:00 – 23:00 and relaxes advertising rules that previously prohibited displaying brand names, trademarks, or images of alcoholic beverages. A Thai lawmaker stated the amendments aim to reduce “unreasonable control” and boost economic activity. The changes follow recent legislation allowing microbreweries and small distilleries to compete in a market historically dominated by Thai Beverage Pcl and Boon Rawd Brewery Co. Prime Minister Paetongtarn Shinawatra has also indicated that the government may review other restrictions affecting tourism, including the ban on alcohol sales during Buddhist holy days and online sales. The measures align with broader efforts to enhance Thailand’s tourism appeal, alongside initiatives such as cannabis legalisation and proposed casino legalisation.

VIET NAM
Viet Nam plans to cut the number of provinces by 50%
(18 March 2025) Viet Nam plans to cut the number of provinces by 50% and reduce commune-level authorities by 60% – 70% before August 2024, according to Viet Nam’s Interior Minister. This follows previous reductions in government ministries from 30 to 22 and a planned 20% cut in public sector jobs over five years. As of 2022, nearly 2 million people worked in the public sector, with 100,000 set for redundancy or early retirement under ongoing reforms. So far, 22,000 jobs have been eliminated, according to VNExpress. The government has also announced the elimination of district-level authorities. Communist Party General-Secretary To Lam has stated that state agencies should not serve as “safe havens for weak officials.” Concerns have emerged over administrative slowdowns, but the foreign ministry denies any impact on investment or business operations.

THE PHILIPPINES
Bangko Sentral ng Pilipinas (BSP) anticipated to reduce rates by 50 to 75 basis points in 2025
(20 March 2025) The Philippine economy is expected to grow between 6% and 7% in 2024, supported by interest rate cuts, according to the country’s Finance Secretary. He anticipates the Bangko Sentral ng Pilipinas (BSP) will reduce rates by 50 to 75 basis points this year, with the first cut possible at the 10 April meeting. Inflation remains within the BSP’s 2% – 4% target, and the peso has strengthened by 1% against the dollar in 2024 after hitting a record low of 59 in December. The BSP’s assistant governor stated that inflation is projected to stay within target for the next two years, providing monetary policy flexibility. Recto dismissed concerns over political instability following former President Rodrigo Duterte’s arrest, saying there is “zero” risk of unrest. The government plans to raise PHP 100 billion through state asset sales, including a hydroelectric power plant.

THE PHILIPPINES, UK
The Philippines and UK to begin trade talks following lifting of import ban on British beef and poultry
(17 March 2025) The UK and the Philippines will begin trade talks following the Philippines’ decision to lift an import ban on British beef and poultry. The UK’s Trade Minister will meet the Philippine Undersecretary in London on Monday to discuss trade expansion, focusing on infrastructure, renewable energy, agriculture, and technology. The removal of the import ban, which was imposed due to cases of mad cow disease and bird flu, is expected to generate GBP 80 million for the UK meat industry over five years. Bilateral trade between the two countries is valued at approximately GBP 2.8 billion annually. Discussions will also cover up to GBP 5 billion in financing from UK Export Finance to support sustainable public infrastructure in the Philippines. The initiative is part of the UK’s broader strategy to expand trade ties in Asia, alongside ongoing negotiations with China, South Korea, Malaysia, and a post-Brexit reset with the EU.

INDONESIA
Indonesia seeing widespread layoffs as Eid approaches
(20 March 2025) Indonesia’s textile sector has seen widespread layoffs, with over 10,000 workers losing jobs at PT Sri Rejeki Isman (Sritex) on 26 February following its failed bankruptcy appeal. Sritex’s closure follows shutdowns at more than 60 textile and garment manufacturers between January 2023 and December 2024 and recent closures of major firms such as Yamaha Music, Sanken Electronic, and Danbi International in early 2025. The Indonesian Trade Union Confederation reported 60,000 job losses across 50 companies in January and February, while the Centre for Research at the Parliamentary Expertise Agency forecasts 280,000 layoffs in 2025, pushing unemployment to 5.2%. Analysts cite government policies favouring new investments and easing import restrictions as factors exposing domestic industries to foreign competition, particularly from China. The Central Bureau of Statistics reported a 0.09% year-on-year deflation in February, the first since March 2000, attributed to discounted electricity tariffs, though economists warn it signals weakening consumption and investment. Indonesia posted 5.03% GDP growth in 2024, with a 5% forecast for 2025, below President Prabowo Subianto’s 8% target. To counter slowing consumption, the government announced a IDR 445.5 trillion stimulus, Ramadan and Eid discounts, and IDR 50 trillion in religious holiday allowances for civil servants.