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Economic recovery in ASEAN expected to be strong this year, but some risks lie ahead

Economic recovery in Asean is expected to be strong this year, bolstered by pandemic fatigue and countries shifting its strategies from grappling with Covid-19 to living with it.


But there are some uncertainties about whether governments will re-impose restrictions and growth will be collective, given that some economies are more badly impacted than others by the pandemic.


These were some of the points highlighted by economists and other experts at panel discussion organised by the European Union-Asean Business Council on Thursday (Jan 27), after the Asian Development Bank forecast South-east Asia's growth for this year at 5.1 per cent.


Mr Joseph Incalcaterra, chief economist for Asean at HSBC, said last year, some countries were not prepared for the Delta wave.


"Policymakers are now more realistic and they understand that Covid-19 is not going away. Countries that were sticking to a zero-Covid-19 policy last year have abandoned those," he said, adding that the commitment to live with Covid-19 will allow Asean countries to be more flexible with their policy actions.


"By and large, it is very clear that we are not going to see the same lockdowns that we saw, I don't think there is a political appetite nor economic capacity to have that again."

Mr Andrew Naylor, the regional chief executive of Asia Pacific (excluding China) at the World Gold Council, said how governments react to an emergence of a new variant is an uncertainty that may hamper growth.


He said: "The key is whether there will be an emergence of a new variant that perhaps escapes the vaccine...I think that is the main major immediate headwind that I see."


Dr Marty Natalegawa, former Indonesian foreign minister, also said growth may not be equal across all countries in Asean as the pandemic has had varied effects on different segments of societies.


The pandemic had a disproportionate impact on lower-income and emerging economies, as these countries tend to have less resources to defend against external shocks and support their economy.


Countries also have different degree of exposure to external factors around them. For example, Singapore would be far more integrated and exposed to international development than Indonesia, Dr Natalegawa said.


How well ASEAN can recover also depends on how well it can ride on global trends, such as the focus on environmental, social and governance, the panellists said.


Mr Incalcaterra said producers, especially companies in the West, will be looking at the carbon footprint of the country and how electricity is being derived before choosing to make an investment.


He said: "If you are producing components of electric vehicles' batteries, but those components are being made with (coal-fired) electricity, then that makes it very difficult to sell to investors."


Source: The Straits Times

Date: 27 January 2022

Link: Here

Solar energy in nat’l grid up 10%

The amount of solar energy transmitted through the national grid is around 10 per cent higher than in the same time last year, and authorities are encouraging more investment in clean and renewable energy, according to the head of the state electric utility.

Electricite du Cambodge (EdC) director-general Keo Rottanak told The Post on February 7 that the Ministry of Mines and Energy and EdC have been working to increase the power supply capacity and meet the growing demand inspired by economic growth.

He highlighted two main goals in the undertaking – ensuring sufficient electricity supply and providing clean energy sources.

A 20MW solar farm in Monorom commune, Svay Teap district, Svay Rieng province was recently hooked up to the national grid through connection to a distribution network in Bavet town, bringing the province’s solar power generation capacity to 30MW, he said.

He added that this will curb reliance on electricity supply from the capital and hydropower sources such as the Sesan river, stimulate investment activities, and promote what he termed a “green-energy zone”.

He stressed that Cambodia regards the furtherance of clean energy generation as a major priority. “This results in the provision of sufficient energy in Cambodia, with the appreciation that the sustainability of environmental protection is ensured,” he said.

About 350MW of solar power has been integrated into the national grid, with Pailin province accounting for the lion’s share at 90MW or 25.7 per cent, followed by Kampong Speu (80MW; 22.9 per cent), Battambang and Kampong Chhnang (60MW; 17.1 per cent), and Banteay Meanchey and Svay Rieng (30MW; 8.6 per cent), he added.

For full article, please read here


Author: Hin Pisei

Source: The Phnom Penh Post 

JCA eyes Banteay Meanchey agriculture potential for Japan investment

The Japan-Cambodia Association (JCA) is seeking additional investment in the agricultural sector of Banteay Meanchey province, where most Japanese investors act in the electronics manufacturing and auto assembly markets.

During a visit to the northwestern province on the Thai border, JCA director and Nippon Koei Co Ltd general manager Tsutomu Tamura on February 1 met with provincial governor Um Reatrey.

Tamura said he had gone on the trip to learn more about the potential of the province, observe the rewards and challenges associated with the operation of the Japanese factories based in Poipet town, and gain other important insights.

“The JCA plans to lead Japanese investors on a visit to Cambodia, especially to Banteay Meanchey, a province with potential in agriculture, paddy rice, cassava and tourism,” he said.

The governor said that the Banteay Meanchey Provincial Administration is “always ready” to support the JCA’s initiatives and collaborate on any activities that could potentially bring economic prosperity to the province.

Reatrey called on the JCA to promote tourism and investment to Banteay Meanchey, especially in agriculture, saying that 85 per cent of the province’s 790,000 population is engaged in farming – highlighting the sector’s untapped potential for investment.

Banteay Meanchey provincial Chamber of Commerce president Chhoeung ChhivIen told The Post on February 2 that most high-rolling Japanese businesspeople based in the province invest in electronics manufacturing and auto assembly in the Sanco Poipet Special Economic Zone.

He suggested Japanese and other foreign investors look into agricultural product processing in the province, saying that major investments could have a meaningful impact on farmers, significantly helping them overcome market challenges.

Reatrey noted that the province has three primary border gates with Thailand – Poipet, Boeung Trakuon and Malai.

He also listed five major industrial zones in the province – Poipet-O’Neang Special Economic Zone, Sanco Poipet Special Economic Zone, Poipet PP Special Economic Zone and Ly Utny Special Economic Zone in Poipet town; and Sisophon Industrial Park in the provincial capital of Sisophon.

For original article, please read here


Author: Hom Phanet 

Source: The Phnom Penh Post 

Cambodia’s garment, footwear, travel goods exports up 15.2 pct in 2021

Cambodia’s garment, footwear and travel goods industry has seen a 15.2 percent rise in exports in 2021, according to a report from the General Department of Customs and Excise on Saturday.

The Southeast Asian nation exported the products worth $11.38 billion last year, up 15.2 percent from $9.88 billion in the year before, the report said.

The garment, footwear and travel goods industry is the largest foreign exchange earner for Cambodia. The sector consists of roughly 1,100 factories and branches, employing approximately 750,000 workers, mostly female, according to the Labor Ministry.

The sector is one of the four pillars supporting the kingdom’s economy.

Minister of Economy and Finance Aun Pornmoniroth said earlier this week that the success of the national vaccination campaign in controlling the spread of COVID-19 has allowed the country to fully resume its socio-economic activities in all areas.

“With the success, Cambodia’s economy is projected to grow at a better-than-expected rate of 3 percent in 2021 from a 3.1 percent contraction in 2020, propelled by a swift rebound in garment sector and non-garment sector as well as agriculture,” he said.

“For 2022, the economy is predicted to grow at a higher rate of around 5.6 percent, buoyed by the expected rise of global demand and foreign investors’ confidence,” he added.

Pornmoniroth said Cambodia is one of a few countries in the region and in the world which have achieved high vaccination rates and induced strong COVID-19 herd immunity.

The country has so far administered at least one dose of COVID-19 vaccines to 14.37 million people, or 89.8 percent of its 16 million population, the Health Ministry said on Saturday.

Nearly 13.8 million people, or 86.2 percent of the population, have been fully vaccinated with two required shots, and 5.97 million, or 37.3 percent, have taken a third dose or booster shot, said the ministry.

For full article, please read here


Author: Xinhua

Source: KhmerTimes 

Cambodia: New platform set in motion to promote RD on food technology

While Cambodia is known for its wealth in natural resources and raw materials, it is still very much reliant on imported products including products of the sea.

Fisheries is one sector that is thought to be neither competitive nor reaching its full potential in the country, attributed to the lack of innovation and technology.

Director General of the Fisheries Administration Poum Sotha revealed that fishery processed products from Cambodia are behind in terms of added-value and product diversification as there has not been an optimised use of the resources from the sea.

To address this, a Food Technology, Research, and Innovation Platform has been set up. It is aimed at promoting research and development, knowledge transfer and enhancing collaboration between the post-harvest fishery production sector and higher education institutions.

The initiative which also received support from the European Union also aims to build a research and innovation ecosystem in Cambodia.

To initiate the establishment, a one-day discussion was held, headed by CAPFISH  Project of the United Nations Industrial Development Organization (UNIDO ) together with representatives from higher education institutions, the private sector, officials from the Fisheries Administration, and the Ministry of Industry, Science, Technology and Innovation.

The cooperation would benefit higher education institutions, research institutions and the private sector in promoting support for fisheries sub-sector development, both freshwater and sea aquaculture to meet the needs of both the domestic and export markets.

For full article, please read here 


Author: Sok Sithika

Source: Khmer Times 

‘Missing Digital Link’ to deliver e-commerce boost for small businesses in Cambodia

Online portal will speed shipments, open export markets. It will provide a lift for Cambodia’s MSMEs, which account for only 10 percent of its total exports despite a dominant role in the economy. That figure trails the 30 percent share of exports reached by MSMEs in other regional economies.

Expanding into new global markets will soon be easier for Cambodian businesses thanks to a project launched today by the Cambodian government and the Global Alliance for Trade Facilitation, which will digitalise paper-based customs clearing processes for small packages sent through the post.

Cambodia’s General Department of Customs and Excise (GDCE) and Cambodia Post already have established electronic systems for handling small package clearances but lack a digital link that would allow them to realise their full potential. So instead, customs declarations are still filled in and processed manually and only at or after the arrival of shipment.

Through its implementing partner Swisscontact, the Alliance is clearing that roadblock with this new project, which will develop the missing digital link between the two systems. That link will enable faster clearance of parcels, end the dependence on burdensome paper processes, and allow shipping information to be transmitted before a package arrives at its destination country.

The Alliance is also working with the Cambodian Women’s Entrepreneur Association (CWEA) to ensure that micro, small, and medium enterprises (MSMEs), many of them women-led, can take full advantage of these improvements. To this end, the project will be establishing a new online portal to act as an e-trade ‘one-stop’ service point for MSMEs to ship goods internationally and upscale their export capabilities.

Once implemented, the project will provide a lift for Cambodia’s MSMEs, which account for only 10 percent of its total exports despite a dominant role in the economy. That figure trails the 30 percent share of exports reached by MSMEs in other regional economies. Getting up to that level could potentially add USD3.2 billion in exports to Cambodia’s economy.

For original article, please read here


Author: Khmer Times 

Source: Khmer Times 

Rules for implementing VAT on foreign E-commerce activities in Cambodia

Cambodia’s Prakas 542 provides the rules for implementing a value-added tax on non-resident foreign e-commerce suppliers.

Prakas 542 also clarifies that the non-resident entity must register for VAT purposes in Cambodia and file for VAT returns if their turnover from the e-commerce activities reaches a certain threshold.

Notified in September 2021, Prakas 542 provides the rules for implementing value-added tax (VAT) on foreign e-commerce activities in Cambodia.

Prakas 542 is an implementing regulation of Sub-decree 65, which was issued in April 2021. It mandates that non-resident e-commerce entities register for VAT with the local tax authority – if they do not have a permanent establishment in Cambodia. (E-commerce entities here refer to entities engaged in the digital supply of goods and services.)

Sub-decree 65 was issued in response to the growth of Cambodia’s e-commerce sector, which bolstered by the pandemic, saw revenue reach over $900 million in 2021 and could reach $1.7 billion by 2025.

Cambodia’s national e-commerce strategy
Further, in November 2020, the government established a national e-commerce strategy aimed at developing the domestic industry and preparing for a robust digital economy that can integrate Cambodia’s small and medium-sized enterprises (SMEs) into global value chains.

Cambodia’s national e-commerce strategy comprises 10 chapters:

Legal and regulatory frameworks;

Institutional coordination and policy focus;

Information and communications technology infrastructure;

Payment systems;

SME regulations;

Cross-border trade;

Domestic e-commerce logistics;

Access to finance;

Market support; and

Digital knowledge/skills infrastructure.

What are the compliance obligations for a non-resident e-commerce provider in Cambodia?

A non-resident e-commerce supplier in Cambodia must register for VAT within 30 days. This is applicable for business-to-consumer (B2C) and business-to-business (B2B) transactions.

For full article, please read here

 

 

Author: ASEAN Briefing.com

Source: Khmer Times 

FDIs expand for 6th straight month in November

MANILA, Philippines — Riding on the tailcoats of economic reopening in November in domestic and global economies, foreign direct investments to the Philippines grew for the sixth straight month, the Bangko Sentral ng Pilipinas reported Thursday.

What’s new

Data from the BSP revealed FDI tallied a net inflow of $1.1 billion in November 2021, sustaining its feverish pace of growth at 96% year-on-year.

On a monthly basis, FDI jumped 28.07%.

In 11 months, FDI net inflows to $9.2 billion, markedly improving 52.5% compared with the same period in 2020 and exceeding BSP's target of $8 billion net inflow for last year.

Why this matters

FDIs are firmer commitments that provide jobs for Filipinos, so the government wants to attract more FDIs and not only keep existing ones, unlike the so-called “hot money” which enters and leaves markets with ease.

For this year, the central bank revised its full-year forecast to $8 billion, which was already exceeded back in October 2021.

Other figures

  • Equity capital placements, a measure of new FDIs, sagged 1.4% on a yearly basis to $1.74 billion in the first 11 months of 2021. The majority of this fresh capital came from Singapore, Japan, and the United States. 
  • Intercompany borrowings between multinational companies and their local offices soared 82.1% year-on-year to $6.8 billion in the January-November period.
  • Reinvestment of earnings swelled 12.8% on-year to $1.02 billion in the first 11 months of 2021

ADB bewails delay in RCEP ratification

MANILA, Philippines — Firms waiting for the ratification of the Regional Comprehensive Economic Partnership (RCEP) should not be discouraged despite the delay as the Philippines can still catch up, according to the Asian Development Bank (ADB).

Still, the ADB said the deferment of the ratification of RCEP, which is considered as the world’s largest free trade agreement, is unfortunate.

During the launch of the Asian Economic Integration Report (AEIR) yesterday, ADB chief economist Albert Park said RCEP presents an avenue for economies such as the Philippines to find new opportunities and global value chains that are going to be facilitated by the agreement.

“So it is unfortunate to delay the implementation of that agreement. But at the same time, the agreement just went into force in January and I think its impact is going to be quite gradual,” Park said.

The RCEP took effect on Jan. 1 as the required number of countries had deposited their instruments of ratification of the deal.

However, the Philippines failed to ratify the agreement. The Senate last week adjourned its session for the election break.

President Duterte ratified the RCEP last September. It has since awaited the concurrence of the Senate.

Amid the delay, Trade Secretary Ramon Lopez expressed hope that the Senate would give its concurrence once session resumes in May.

Park said the impact of RCEP would unfold over time as companies understand and then react to the changing opportunities brought about by the agreement.

“I don’t think companies in the Philippines or workers should feel discouraged as long as there’s an agreement to get there eventually. I’m sure as the years unfold, those opportunities will also be made available. And that’s true for any country, not just the Philippines,” Park said.

In particular, ADB economist Cyn-Young Park said the trade deal would significantly help the business process outsourcing (BPO) sector in creating jobs and income for many Filipinos.

“The Philippine government, I do believe, is taking measures to ratify. I share the optimistic sentiment that it will provide great potential for promoting more active employment generation in the BPO sector in the Philippines,” she said.

The Philippines is a major hub for services exports through BPOs such as call centers and high-end outsourcing or knowledge process outsourcing and business process management.

The Philippines accounts for over 12 percent of the global IT-BPO market and is expected to cover 15 percent of the global outsourcing market this year.

In an earlier report, ADB said the RCEP could provide the Philippines with an additional $7 billion in exports by 2030 even amid trade uncertainties, allowing total exports to hit $184 billion.

Meanwhile, the AEIR showed that trade among economies in Asia-Pacific jumped to its highest level in three decades amid recovery from the pandemic.

Trade in the region grew nearly 30 percent in the first three quarters of 2021 following a 3.1 percent contraction in 2020.

Intra-regional trade made up almost 60 percent of the region’s total trade last year, the highest share since 1990.

ADB said the strong intra-regional trade, along with the release of global pent-up demand and the early economic recovery in China, underpinned the region’s economic resilience.

Source: The Philippine Star

'Conversational commerce' to rise

CONVERSATIONAL commerce is among the digital trends that are seen to continue growing this year, a Viber executive said.

In a statement on Wednesday, David Tse, Rakuten Viber senior director for Asia-Pacific, underscored four digital trends, which include the further rise of conversational commerce.

"As we've witnessed on Viber, independent online business owners managed to get back on track and then move forward with more steady steps as they learn more about their customers' online behavior and preferences," Tse highlighted.

He said conversational commerce gained traction to replicate personal service without physical interaction, which increased the demand for chatbots.

"Before the pandemic, customers were used to receiving personalized services in traditional stores and their preference for an individual service shifted to digital and mobile shopping," he added.

Tse noted that Viber's Communities feature has seen a 22-percent growth in the country last year, especially those in business-related Viber Communities.

The feature allows brands and businesses to connect with consumers and have one-on-one conversations with members.

Tse also sees the trend for a person-to-person experience to continue this year, which he said online businesses can do by maximizing private chats with their customers.

"By increasing engagement with customers beyond just customer service support or promotional driven information, Communities allow businesses to create regular content to amplify the interest from the customers on the product category and organically create an interest-focused conversation rather than transactional conversation," he explained.

The digital era, likewise, highlighted more locally made products, according to Tse.

"This pandemic habit is likely to be embedded, as we've realized that going local can be very much part of our day-to-day life," Tse said.

Citing data from the trade and industry department, Tse noted that micro, small and medium enterprises or MSMEs accounted for 99.5 percent of business establishments in the country in 2020.

The segment also contributed around 36 percent to the country's economy in the past years.

Tse said data privacy would also be a priority for the consumers this year.

"Online business owners can better adapt and future-proof themselves by switching to partners that do not collect customer data for profit or by collecting data directly from consumers through conversational commerce, for instance," he said.

Source: The Manila Times

The Philippines: Tourism inquiries, bookings up as travel restrictions ease

Several members of the tourism industry have observed an increase in the number of bookings and inquiries they receive.

This follows the announcement of the government to reopen the sector for fully vaccinated foreigners from non-visa-required countries for tourism and business purposes starting Feb. 10. 

Cebu Pacific spokesperson Carmina Romero told CNN Philippines' The Exchange that they have seen higher bookings with the relaxation of restrictions. She said they are ready to support this through increases in flight frequencies in the coming months.

SM Hotels & Conventions Corp. SVP-Operations Walid Wafik said they have been also observing the same trend, especially from domestic travelers. 

In terms of events, Wafik said they are expecting these will come back this year as organizers confirm allocations and spaces for the resumption of their in-person activities.

Tourism Secretary Bernadette Romulo-Puyat said more tourists from the United States - especially balikbayans - are expected this year, as well as those from South Korea and Japan. Travelers are also inquiring in tourist spots like Cebu, Palawan, Bohol, and Boracay, she added.

However, she noted the reopening next week will be gradual and is more of a signal that the country is ready and health protocols are in place.

Romulo-Puyat also said they hope the US Centers for Disease Control and Prevention will reconsider its warning against traveling to the Philippines since this did not consider the current drop in local infections. 

Source: CNN Philippines

14.5% growth caps 2021 PH export, likely to double in the next five years

Philippine merchandise exports closed 2021 with a 14.5% growth with value reaching USD 74.6B, based on preliminary data from the Philippine Statistics Authority (PSA). Despite the emergence of a new COVID-19 variant that has impeded the full recovery of the global economy, Philippines exported goods increased in December which added USD 6.3B in the country’s export earnings, an increase of 7.1% from USD 5.9B in December 2020. Current exports also grew by 5.2% compared to USD 70.9B in the full year 2019 and 9.0% compared to USD 5.8B in December 2019.   

Department of Trade and Industry (DTI) Secretary Ramon M. Lopez reported, “December PSA data also showed that seven of the top 10 major commodity groups have recorded increases in annual export sales, in which five of these 7 gainers breached their pre-COVID export levels, led by coconut oil (135.2%). As sales of coconut oil continue to accelerate, other coconut products are also gaining traction in the global market.”  

According to Research and Markets, the demand for coconut products is expected to grow significantly in the future as the consumption of processed food products grows due to the rise in urban population.  

Other commodity groups that recorded large export growths include other manufactured goods (53.5%), chemicals (43.0%), machinery and transport equipment (19.2%), electronic equipment and parts (16.5%), other mineral products (4.9%), and electronic products (1.8%). 

Electronics exports amounted to USD 3.92B in December 2021 which brought the year-to-date (YTD) export figures to USD 45.92B 12.9% higher compared to January-December 2020.  Top Philippine electronics exports last month were components/devices (semiconductors), electronic data processing, other electronics, telecommunication, and consumer electronics.   

The World Semiconductor Trade Statistics (WSTS) expects the global semiconductor market to grow by 25.6% in 2021 with a market size reaching USD 553B. This will be the biggest jump in semiconductor sales since the 31.8% increase in 2010. Moreover, the robust global consumer demand pushed all major product categories to double-digit growth rates, except for optoelectronics. 

For December 2021, the US imported USD 1.0B worth of goods from the country while China imported USD 925.2 million. Philippine exports in the two markets accounted for 31.4% or USD 23.4B of the country’s total exports in 2021. 

Meanwhile, preliminary data for 2021 shows that Philippine exports grew in its top five markets: US (18.3%), China (17.5%), Japan (6.8%), Hong Kong (7.6%), and Singapore (11.2%). 

The Trade Secretary shared that more than half of Philippine commodity groups have recovered from the adverse economic impact of COVID-19 and have breached pre-pandemic export levels.  

He said, “Our focus for the first half of 2022 is to unlock the unrealized export potential of the country and empower our exporters in seizing opportunities in the recovery of global markets. Unlocking trade barriers or frictions alone could add another USD 20B to our export earnings.”  

Based on a recent study conducted by the International Trade Centre (ITC), the Philippines has an unrealized export potential of USD 49B, of which USD 20B is due to product-market-specific frictions and USD 29B is based on the projected growth of the Philippines and its export markets. According to the study, these trade frictions are often linked to lack of market knowledge, difficulties in complying with market requirements, and difficulties in matching buyers with the right suppliers, among others.  

Reinforcing the importance of the coconut industry in Philippine exports, ITC’s Export Potential Assessment has also identified coconut as one of the products with the highest export potential among the agricultural products with more complex value chains. The DTI will focus its efforts on promoting high-value coconuts, targeting the health and wellness market and other non-food uses for coconut, aside from the traditional food product segments.  

“As part of our initiatives to assist coconut exporters to unlock the unrealized export potential, we will be providing technical and marketing support to selected MSMEs through training and coaching on export management and marketing, including support to their participation in international trade fairs and business matching sessions,” said DTI Undersecretary for Trade Promotion Abdulgani Macatoman.  

He added, “First for this year will be the export promotion activities in the Middle East/North Africa (MENA) region, including in-store promotion of Philippine food products in leading supermarkets in the United Arab Emirates (UAE), participation in Gulfood, and a business matching session in Dubai.” 

Other products with high export potential include are bananas, pineapple, and tuna. The study estimates that Philippine agriculture, food, and beverage exports still have an unrealized export potential of USD 5.2B. 

For manufacturing, the sub-sectors that are technologically advanced and exhibit important export growth opportunities are motor vehicles and parts, plastics and rubber; optical products, watches, medical instruments, and machinery and electricity. 

The ITC study was conducted as part of the ARISE Plus Philippines Project supported by the European Union. The Project aims to foster inclusive economic growth in the Philippines through improved international trade performance and competitiveness as well as economic integration.  

Sec. Lopez added, “The ITC Export Potential Assessment validates and quantifies the potential of our export industry to grow by nearly twice its export levels in the next five years if we invest in increasing our production capacities and unlock or address these trade frictions.” 

Source: Department of Trade and Industry Philippines