CARI Captures 298
Malaysia’s economy grows at fastest pace in a year
Malaysia’s economy grew at the fastest pace in a year, growing by 4.5 percent in the fourth quarter of 2016 on the back of strong consumer spending and a recovery in exports and commodity prices. While government expenditure has decreased, domestic consumption has been the key driver to economic growth, with the central bank keeping interest rates low to fuel this growth. Private consumption which makes up about half of the country’s GDP grew at 6.2 percent last quarter compared to the last quarter of 2015. Recovering commodity prices also helped government expenditure continue in large infrastructure projects such as the highway connecting the Borneo states of Sabah and Sarawak. The services sector saw a fall in growth which was at 5.5 percent compared to the previous quarter when it grew by 6.1 percent. The manufacturing sector grew by 4.8 percent compared to 4.2 percent in the previous quarter.
Source: Bloomberg (16 February 2017)
Monthly household income grows at a slower rate
Singapore’s Department of Statistics annual Key Household Income Trends survey showed that the median monthly income for employed households grew from $8,666 (US$6,100) in 2015 to $8,846 ($6.203) in 2016. This is a 2.6 percent rise in real terms. However, this was a slower growth rate than that recorded in 2015 which was 4.9 percent. Additionally, income inequality on the island nation fell to its lowest level in a decade with the Gini coefficient, going down from 0.463 in 2015 to 0.458 in 2016.
Source: The Straits Times (16 February 2017)
Bank cards to adopt to EMV to meet ASEAN standards
The Central Bank of Myanmar said that all the payment cards issued by local banks will have to be upgraded to the EMV standard, as a measure to strengthen security. EMV chip technology is fast becoming the global standard for credit card and debit card payments. Named after its original developers (Europay, MasterCard and Visa), EMV cards are more difficult to clone. In order to implement this nationwide upgrade, Myanmar Payment Union (MPU), which was established together by 23 local private banks, signed a deal on 7 February with Unionpay International (UPI). Myanmar’s eagerness to connect to the global financial system was first demonstrated by AYA Bank who became the first lender to offer bank cards with a stamp from Japanese global payment network provider JCB.
Source: Myanmar Times (16 February 2017)
Philippines seeks aid of US and China to protect southern waters
The Philippines is seeking US and Chinese help to guard the Sibutu Passage as Islamic militants shift attacks to international shipping. The deep-water channel is the fastest route from Australia to manufacturing giants China, Japan and South Korea. Each year 13,000 vessels pass through the channel which is situated between southern Philippines and the state of Sabah in Malaysia. Philippines Coast Guard chief, Commodore Joel Garcia, said rising incidents of piracy around the 29-kilometre-wide area threaten to increase overall shipping costs, including insurance for vessels, cargo and crew.
Source: Channel News Asia (8 February 2017)
Malaysia to be a logistics hub in ASEAN
Malaysian Transport Minister, Datuk Seri Liow Tiong Lai, said that the Malaysian Cabinet has discussed plans to turn the country into a logistics hub. The Sepangar Bay Container Port in the state of Sabah together with Port Klang in the state of Selangor will be the key ports that are a part of this plan. Sabah, in particular, is ideally located to become the a hub for product distribution within ASEAN. Sabah falls on sea routes connecting South America and Australia to China. However, he said Sabah needs to develop more manufacturing and downstream activities which will ensure that ships leave the ports of Sabah at full capacity rather than half empty as they currently do. The current lack of cargo volume from Sabah means that containers are transshipped from Sabah to Port Klang. The Federal Government had previously approved RM1.027billion (US$231 million) its 11th five year plan for the expansion of Sepangar Bay Container Port to become a transshipment hub.
Source: The Star Online (16 February 2017)
Thailand keen to ink FTA with India
Thai Deputy Prime Minister, Somkid Jatusripitak, said, “We really want to work with the Indian government to have a free trade agreement (FTA) together even though we had some obstacles in the past.” In 2004, the two countries abolished duties on 82 items under an ‘Early Harvest Scheme’. These items included products like fruits, processed food, gems and jewellery, iron and steel, auto parts and electronic goods. This was the first step of the proposed bilateral FTA. The agreement could reduce and eliminate duties on approximately 90 percent of goods traded.
Source: Economic Times, India (16 February 2017)
Need for a collective voice from Brunei business community
A joint consultation of chambers and business associations in Brunei explored how the country’s businesses could have a single voice, especially when meeting foreign delegates. A delegate at the consultation noted that businesses from from China, South Korea, Japan and the United States are seeking to come to ASEAN and the delegates hoped to form a core team that would create this ‘one voice’. The session was attended by members of Asean Business Advisory Council (ABAC), business chambers, cooperatives, BIMP-EAGA Business Council, Brunei Association of Banks and business councils.
Source: Borneo Bulletin (14 February 2017)
RCEP agreement could be ready by November 2017
Filipino Trade Secretary, Ramon Lopez, said that there is a possibility of an agreement being reached on RCEP by November this year. The Philippines is looking to secure a significant milestone during its chairmanship of ASEAN and to speed up economic integration within the region. He added that the the reduction in tariff levels would be discussed at the ASEAN Economic Ministers Meeting in March. RCEP is a multilateral FTA between the 10 nations of ASEAN and Australia, China, India, Japan, New Zealand and South Korea.
Source: Manila Times (11 February 2017)
Philippines to push for expansion of ASEAN services agreement
Undersecretary for Trade and Industry, Ceferino Rodolfo, said the Philippines has a particular interest in the services agreement due to the country’s strength in the IT-BPO industry. The Philippines will push for the expansion and deepening of the ASEAN services agreement, tentatively over a 10-year transition period, to allow the liberalisation of more sectors, including the practice of professions and the movement of persons across all ASEAN member countries. Currently, the ASEAN Framework Agreement on Services (AFAS) has liberalised 11 sectors and completed eight mutual recognition agreements on professions and their standards. Under the ASEAN Economic Community 2025 Blueprint AFAS will be replaced with the more dynamic ASEAN Trade in Services Agreement (ATISA).
Source: Manila Bulletin (11 February 2017)
ASEAN needs to build bond market connectivity
The ASEAN bond market is fragmented with different currencies, legal regimes and foreign exchange control policies. At an annual conference organised by ratings agencies from Malaysia and Indonesia, Securities Commission Malaysia Chairman, Tan Sri Ranjit Ajit Singh, said there was no mutually-acceptable ASEAN rating scale nor an ASEAN bond asset class for investors as guidance. Several efforts had been made by the ASEAN Capital Market Forum (ACMF) to enable connectivity for ASEAN bond market, including the fully-harmonised prospectus disclosure requirement through the ASEAN Disclosure Standards. This has helped issuers from participating ASEAN jurisdictions in facilitating cross-border offering of equity and debt securities.
Source: The Star Online (15 February 2017)
ASEAN Convention Against Trafficking in Persons ratified by sixth nation
The ASEAN Convention Against Trafficking in Persons, Especially Women and Children (ACTIP) will enter into force in March. Philippines becomes the sixth ASEAN member-state to ratify the convention after Cambodia, Singapore, Thailand, Vietnam and Myanmar. ACTIP was signed by ASEAN leaders at the 27th ASEAN Summit in November 2015, ACTIP which is the first regionally binding instrument on trafficking in persons, will be the legal basis for ASEAN member-states to refer to when facing security challenges related to human trafficking. Permanent Representative of the Philippines on ASEAN Ambassador Elizabeth P. Buensuceso said that President Duterte places high importance to the fight against trafficking in persons.
Source: Business Mirror (13 February 2017)