COVID-19 in Southeast Asia
Emerging Market Experts (EMEx) tracks the spread of the coronavirus in the emerging markets of Southeast Asia. We also look at government COVID-19 responses and the socio-economic impact on those emerging markets.
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Emerging Market Analyses
Last updated 30-06-2020 15:15
We track lockdown measures and travel restrictions in Singapore, Malaysia, Thailand, Myanmar, Indonesia, Timor-Leste, Brunei, Vietnam, Cambodia, Laos and the Philippines.
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Malaysia’s official reserves at US$102.95bil as at end-may 2020
Malaysia's international reserves remained usable as at end-May 2020, with official reserve assets at US$102.95 billion, in accordance with the International Monetary Fund's Special Data Dissemination Standard (IMF SDDS) format.
Malaysia posts May trade surplus of RM10.4b, exports below forecast
Malaysia posted a trade surplus of RM10.41bil in May this year, rebounding from a deficit of RM3.63bil in April but overall exports were weaker than expected, the Ministry of International Trade and Industry (MITI) said. (The Star)
Malaysia Shippers, manufacturers face financial burden due to delays in cargo collection
The delays in collecting cargoes during the movement control order (MCO) period has resulted in accumulated charges, causing financial burden to local shippers and manufacturers, says Malaysian National Shippers’ Council (MNSC) chairman Datuk Dr Andy Seo Kian Haw.
“We call for the Ministry of Transport’s (MOT) intervention once again, this time with the shipping lines and we hope that the MOT will urge them to waive or to provide discounts on demurrage and detention charges due to delays in the collection of cargoes held during the MCO period,” he said in a statement.
The MNSC commended the timely intervention of the MOT in urging port authorities to waive port-related charges have led Port Klang, as well as the port authorities of Johor and Sabah to grant a waiver on port storage charges during the MCO period, which has greatly reduced the burden of financial losses that shippers will need to bear during this difficult period.
Seo said the government intervention is important to ensuring shippers ability to cope with the situation and their survival during this unprecedented period, failing which there would be a detrimental impact on the economy.
Besides that, he noted that the International Maritime Organisation Low Sulphur Fuel Surcharge was imposed collectively by shipping lines, effectively Feb 1 this year at a fix rate of RM9 per metric or cubic metre (m3) on top of the current applicable bunker surcharge. (Malaymail)
Green lane and commuting arrangement to be set up between Singapore and Malaysia
A green lane and periodic commuting arrangement will be established between Singapore and Malaysia to meet the needs of different groups of cross-border travellers, a statement from the Ministry of Foreign Affairs said on Saturday (June 27) afternoon, following a telephone call between Prime Minister Lee Hsien Loong and Malaysian Prime Minister Muhyiddin Yassin.
The two leaders, who spoke on Friday, discussed the gradual and phased resumption of cross-border travel between Singapore and Malaysia.
The Reciprocal Green Lane (RGL) will facilitate cross-border travel for essential business and official purposes between both countries. Travellers would have to adhere to a set of Covid-19 prevention and public health measures, which are still being discussed and will have to be mutually agreed upon by both countries.
The Periodic Commuting Arrangement (PCA) will allow Singapore and Malaysia residents who hold long-term immigration passes for business and work purposes in the other country to periodically return to their home countries for short-term home leave.
They will be able to return home for leave after spending at least three consecutive months in their country of work, and they will be allowed to re-enter their country of work after their home leave.
In the call, PM Lee reiterated Singapore's commitment to address the needs of Singaporeans and Malaysians who were previously commuting between both countries. Both leaders agreed that any bilateral arrangement would have to include mutually agreed public health protocols. This is meant to preserve the public health and safety of citizens on both sides while taking into account the medical resources available in both countries.
The MFA said the operational details of the RGL and PCA are being worked out and the two countries will continue discussions on other proposals to gradually facilitate further cross-border movement of people so as to ensure a stable recovery of the two countries from the Covid-19 situation. (Straits Times)
World Bank lowers Malaysia GDP, sees it shrinking by 3.1%
The World Bank has downgraded its forecast for Malaysia's economy this year and expects GDP to contract by 3.1% from its earlier expectation of -0.1% in April while it expects the near-term outlook to be uncertain due to the COVID-19 pandemic. (The Star)
US businesses in Malaysia adjusting, seizing opportunities
United States-based companies in Malaysia have resumed operations and are adjusting to the— with a focus on mitigating the risks that emerged while driving efficiency and productivity.
Chief Executive Officer (CEO) of the American Malaysian Chamber of Commerce (AMCHAM), Siobhan M Das, said companies are taking necessary measures and are adjusting in the face of the new situation.
“Despite these challenges, and reflecting (on) the long-term nature of American investment in Malaysia post-Covid-19 recovery phase , the vast majority of our members are deploying their Business Continuity Plan and managing the operations to mitigate the risks as best as they can.
“Businesses were able to see clearly where strengths and weaknesses existed in their ecosystem, and many are busy managing not just the newly-exposed risks but are also seizing the opportunities that sprouted from the pandemic and the shifts in business models,” she said in an email interview with Bernama.
She said that while most of the US businesses report financial losses due to the restrictions imposed, a Business Impact Survey conducted by AMCHAM in April also found that its members have been able to avoid laying-off of staff or implementation of mandatory unpaid leave during the movement control order (MCO).
Malaysia imposed the MCO on March 18 and embarked on a recovery phase on June 10 where most businesses and social activities are allowed to resume operations with strict standard operating procedures after having successfully put the outbreak under control.
Siobhan, who assumed the role of AMCHAM’s CEO in January this year, said the chamber will continue to be proactive and be at the forefront to support its members in navigating the Covid-19 crisis.
She said AMCHAM provided immediate and urgent support to its members during the MCO by ensuring they had the latest information and data from various authorities. (Malaymail)
Malaysia should look into 'travel bubble', for business travellers
Industry trade events organiser, Informa Markets has urged the government to consider reopening the borders for business travellers from countries which have managed to contain the COVID-19 spread. (The Star)
Malaysia’s debt-juggle continues
As a country that has faced budget deficits for over two decades amid efforts to turn surplus, Malaysia has consistently relied on borrowings to finance its revenue shortfalls. (The Star)
Harvey Norman Malaysia on expansion drive
Harvey Norman Malaysia is expanding the number of stores it operates in Malaysia post the movement control order (MCO) period with three more new stores planned by the end of this year.
Harvey Norman Asia managing director Kenneth Aruldoss told StarBiz that those stores will be in the Klang Valley.
Currently, Harvey Norman has 23 stores and the lifestyle retailer specialising in electrical, computers, furniture and bedding aims to have more than 50 stores in Malaysia by the end of 2023, subject to the pace of opening of new shopping malls and the situation of the economy post the Covid-19 pandemic.
Aruldoss said Harvey Norman conducts feasibility studies including demographics when deciding on the location of its stores.
“Similar to most companies, Covid-19 has hit us like a sledgehammer but it is only temporary,” he said.
Aruldoss said Harvey Norman has been working with the shopping malls on potential sites for new stores. While the Harvey Norman stores themselves are crowd pullers, he said dealing with established landlords of shopping malls was also critical in the success of its stores. (The Star)
Malaysia's AirAsia launches e-commerce platform to help farmers
AirAsia has initiated Ourfarm, an e-commerce platform, to help farmers fly high with a greater revenue-generating capability.
The Ourfarm business-to-business platform was poised to revolutionise the agribusiness supply chain, connecting farmers directly to businesses, thus eliminating middlemen cost and boosting farmers' earning power.
It also comes with logistical support to help farmers fulfil orders directly to businesses.
Agriculture and Food Industries Minister Datuk Seri Dr Ronald Kiandee, AirAsia Group executive chairman Datuk Kamarudin Meranun and AirAsia Group chief executive officer Tan Sri Tony Fernandes launched the Ourfarm e-platform at Serdang Agriculture Department on Monday (June 15).
Ourfarm was established as a strategic partnership with the ministry, supporting over 1,000 government contract farmers as well as owners of private farms.
Kamarudin said the platform was a disruptor that would help many small businesses by reducing the cost of fresh produce procurement by up to 25% as they could source directly from the agriculture producers.
"Importantly, Ourfarm will help increase the profit margins of agriculture producers by eliminating middlemen cost. (The Star)
Malaysia keeps borders closed
The country's borders will remain closed to anyone during the recovery movement control order (MCO) unless travellers have pressing matters to address, says Datuk Seri Ismail Sabri Yaakob.
"Malaysians will need a good reason to travel out of the country and apply to the Immigration Department for permission.
"For example, if a student needs to return to their university overseas to sit for an exam, that is allowed," the Senior Minister said.
He said the no-travel policy also applies to athletes who need to travel abroad for championships or competitions to qualify for the Olympics. (The Star)
Malaysia’s fiscal deficit to be at 5.8% to 6% this year
Malaysia’s fiscal deficit is expected to increase to between 5.8% and 6% of GDP this year following the implementation of the government’s stimulus programmes to offset the severe fallout from the Covid-19 pandemic.
Finance Minister Tengku Datuk Seri Zafrul Aziz said during a Webinar on June 9 hosted by Maybank Investment Bank Research the Economic Recovery Plan (Penjana) will bring the budget deficit up to 5.8%-6.0% of GDP.
According to Maybank IB Research over 300 participants dialed in consisting of fund managers, corporate clients, Ministry of Finance and Bursa Malaysia officials, and Maybank officials and he addressed a wide range of questions.
Zaful had said the earlier Prihatin programme raised the budget deficit to 4.7%-5.0%. Total fiscal injection of both Penjana and Prihatin was RM45bil, of which RM35bil was under Prihatin and RM10bil under Penjana. (The Star)
Malaysia Airports sees increase in local flights under RMCO
Malaysia Airports has seen a gradual increase in the number of flights offered by local airlines at the KL International Airport over the past two days after the implementation of the recovery movement control order (RMCO).Group CEO of Malaysia Airports Mohd Shukrie Mohd Salleh said the average number of daily flights had increased from 97 to 122 — an increase of 15%.“The country’s three main airlines —Malaysia Airlines, AirAsia and Malindo Air — have reopened local flights and have aggressively stepped up their offerings to woo Malaysians to take a break and experience travel after a three-month stay at home.“We are also seeing similar patterns at other international and domestic airports nationwide where passenger movements have increased three-fold over the last couple of days since the relaxation of the restrictions,” he said in a statement. (Free Malaysia Today)
Malaysia to see massive spike in cloud services
According to a recent report in the Financial Times, the competition saw a frenzy of investment, with Amazon, Google, Alibaba, Tencent and Microsoft increasing their data centre footprint in the region by almost 70% over the past three years.
Global market intelligence firm International Data Corporation (IDC) states that investment in cloud infrastructure in Asia hit US$98bil last year.
Other market research reports project that cloud computing market revenue in South-East Asia is estimated to reach US$40.3bil by 2025. This is a result of increased demand for cloud computing among SMEs.
Closer to home, the cloud computing market in Malaysia is expected to be worth US$3.7bil in 2024, growing at a compounded annual rate of 13% from 2020. (The Star)
Malaysia will lift most of lockdown measures starting Wednesday
Malaysia will lift most coronavirus restrictions on businesses on Wednesday, including a ban on travel between its states, after a lockdown of nearly three months although its international borders will remain closed.
Prime Minister Muhyiddin Yassin announced in a televised address on Sunday the novel coronavirus outbreak was under control and Malaysia would begin a new recovery phase until Aug 31.
Malaysia had gradually allowed businesses to reopen with social distancing guidelines over the past month, after shutting all non-essential businesses and schools, banning public gatherings and restricting travel on March 18.
- EMEx classifies Singapore 'lockdown' as Low due to lifting of lockdown measures
Malaysia to double deficit to fund stimulus, says finance minister
Malaysia aims to borrow its way out of an economic slump brought on by the coronavirus pandemic, and the finance minister told Reuters it will nearly double its fiscal deficit this year while keeping open the option of raising the public debt ceiling.
Southeast Asia's third-biggest economy has announced incentives worth 295 billion ringgit (US$69 billion) to soften the impact of the coronavirus pandemic, with the government vowing to directly inject 45 billion ringgit of that into the economy, mostly raised through domestic borrowings.
Finance Minister Tengku Zafrul Aziz told Reuters the fiscal deficit would rise to around 6 per cent of annual economic output this year because of the stimulus, and that a direct fiscal injection of 10 billion ringgit announced on Friday (Jun 5) would be raised through domestic borrowing.
"There is only so much monetary policy can do," Tengku Zafrul said in an interview in his office. "So you need fiscal policy to come into play, as long as you have the discipline and the commitment in the longer term to go back to where you should be in terms of the deficit." (CNA)
Malaysian oil palm farms face $3.9b loss over worker shortage
The coronavirus pandemic has left Malaysia's palm oil industry without enough workers. The shortage could cost farmers as much as 25 per cent of their annual production - a loss worth about US$2.8 billion (S$3.9 billion).
Malaysia's economy relies on palm oil, its most important agricultural commodity, but palm oil needs migrant workers from Indonesia, Bangladesh and India to do the jobs that locals will not do.
As countries in South-east Asia struggle to get the Covid-19 outbreak under control, governments have tightened restrictions on travel for workers coming and going. (Straits Times)
Malaysia PM unveils short-term economic recovery plan
Putrajaya has announced a comprehensive economic recovery plan which will involve wage subsidies, upskilling, tax holidays for investors, grants, and other incentives.
In a televised address today, Prime Minister Muhyiddin Yassin said these measures were contained in the Plan Jana Semula Ekonomi Negara or "Penjana" for short, which will involve RM10 billion in direct fiscal injection.
He said the measures were necessary as Malaysia and the global economy were experiencing unprecedented economic contraction and furthermore, domestic unemployment was projected to reach 5.5 percent by the end of 2020.
Muhyiddin did not announce whether the conditional movement control order (MCO) would end on June 9 as scheduled.
The conditional MCO is enforced by means of a gazette that barred certain economic, social, and educational activities from taking place. (Malaysiakini)
Malaysia delays 5G by 12 months as spectrum allocations nullified
Malaysia will have to wait another year before it can roll out 5G services after spectrum allocations to five telcos, one politically well-connected but lacking experience, were nullified due to the backroom nature in which they were sealed, sources told Nikkei. (Nikkei Asian Review)
Malaysia's Sarawak allows entry to visitors from other states again from June 9
The Sarawak government has decided to allow all Malaysians to enter the state again starting June 9.
However, state Disaster Management Committee chairman Douglas Uggah Embas said Malaysians from the peninsula, Sabah and Labuan must have undergone Covid-19 tests in their respective states or places three days before entering Sarawak.
Those with overseas travel history but who had been quarantined in the peninsula must also present their release order from the health ministry (annex 17) and test results showing that they had tested negative for Covid-19 before entering the state.
Those with travel history from overseas or transiting from Kuala Lumpur International Airport and entering Sarawak, but have not undergone quarantine, would have to undergo 14 days’ isolation at a hotel. (Free Malaysia Today)
Malaysia wants Japanese companies leaving China
The international trade and industry ministry (Miti) is identifying Japanese companies seeking to relocate their operations from China. It wants to invite them to invest in Malaysia.
Minister Mohamed Azmin Ali said this following Japan’s decision to help its manufacturers shift production out of China or relocate their operations to other countries in response to the Covid-19 impact.
“Miti will strive to convince Japanese investors to use Malaysia as a new investment destination, as well as a hub to penetrate the Asean market, with Asean being home to over 650 million people.
“I believe Malaysia can provide the best infrastructure, stable politics and a skilled workforce." (Free Malaysia Today)
Malaysia, Singapore agree to defer HSR project until Dec 31
Malaysia and Singapore said on Sunday (May 31) they have reached an agreement to defer the Kuala Lumpur-Singapore High-Speed Rail (HSR) project again until the end of the year.
The construction of the 350km-long HSR project has been suspended since September 2018 and was due to resume at the end of May.
The update comes after Singapore Transport Minister Khaw Boon Wan on Friday said that Singapore was considering Malaysia’s request to extend the suspension period of the project.
Mr Khaw wrote in a Facebook post on Sunday that Malaysia had requested a seven-month extension to allow both sides to discuss and assess Malaysia’s proposed changes to the project. (CNA)
Malaysia could face recession in six months
The Malaysian economy is about to feel the full brunt of the coronavirus pandemic.
After posting its slowest growth since the global financial crisis, the economy is set to slip into a recession in the next four to six months, the country’s top statistician said.
With its borders shut to foreigners and a standstill in commerce around the world, industries including tourism and aviation have been crippled, adding uncertainty to a rebound in trade in the first quarter, Mohd Uzir Mahidin, chief statistician of Malaysia, said in a report Friday.
The expected decline comes as the country’s gross domestic product grew marginally at 0.7% in the first three months of the year, the lowest since the third quarter of 2009, he said. That’s significantly less than the expansion of 3.9% to 4.2% expected as the country lost 22.8 billion ringgit ($5.3 billion) in economic output because of a countrywide lockdown, he said.
In March, as the world began the “Great Lockdown,” a leading indicator recorded its steepest drop since November 1991, the statistician said. (Bloomberg)
Malaysia's Mahathir Mohamad expelled from his own party
Malaysia's former prime minister, Mahathir Mohamad, has been ousted from his ethnic Malay political party in the latest twist of a power struggle with his successor, but he has vowed to challenge the move.
The 94-year-old Mahathir, along with his son and three other senior members, were expelled from the Bersatu party on Thursday.
The party has has been split into two camps since intense political wrangling led Mahathir to resign as prime minister in February and the king to appoint fellow party member Muhyiddin Yassin as his replacement despite Mahathir's objections.
Mahathir's son, Mukhriz Mahathir, has since challenged Muhyiddin as party president in a vote that's been postponed by the coronavirus pandemic.
"The unilateral action by Bersatu's president to sack us without valid reason is due to his own fears in facing party elections as well as his unsafe position as the most unstable prime minister in the history of the country's administration," a joint statement by Mahathir and the four others said.
Mahathir co-founded Bersatu with Muhyiddin in 2016, and the party joined an alliance that won a stunning victory in 2018 polls, leading to the first change of government since independence. (Star Tribune)
Foreigners in Malaysia have three options
Foreigners who are currently in Malaysia and are looking into making arrangements on their current situation have three options, Defence Minister Datuk Seri Ismail Sabri Yaakob said.
According to the senior minister, this would involve foreigners who are either staying in the country on a visa or social visit pass. The matter also includes those whose documents have expired.
"Firstly, even if their visas have expired but they wish to return to their home countries, they can do so by going to the airport with a flight ticket.
"Secondly, those who wish to renew their social pass or visa can now do so at immigration offices, but you must make an appointment online with the respective offices before going there.
"Thirdly, if their documents have expired and they wish to stay in Malaysia, they can do this too," he told a press conference in Putrajaya today. (New Straits Times)
Luxury hotels for sale in Malaysia
The owners of some of Kuala Lumpur’s finest hotels are putting their properties up for sale as the Covid-19 pandemic continues to cripple the travel and hospitality industry. Malaysian Association of Hotel Owners executive director Shaharuddin M Saaid said many hotel owners want to cash in on their properties as revenue has all but dried up due to travel restrictions across the world. Speaking to FMT, he said some 20 hotels had already closed, adding that this was no surprise. In recent weeks, a number of unnamed hotels, including five-star properties, have been listed for sale on iproperty.com.my. Asking prices vary but five-star hotels are being listed from RM350 million to as much as RM1.7 billion in the city centre. Shaharuddin said some hotel owners had already been preparing to sell their properties before the Covid-19 outbreak, while others had listed their properties to see what prices they could fetch. (Free Malaysia Today)
Malaysia is not heading for deflation according to economists
Malaysia is not heading for deflation despite Consumer Price Index (CPI) having deflated further 2.9 per cent to 117.6 points in April from 121.1 in the same month in 2019, the lowest level since 2010, economists said.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the core CPI, which removes the volatile items such as fresh food and administered prices, had been recording positive growth of 1.3 per cent for the past three months now.
"Therefore, it is not deflation since the primary driver for the decline in headline CPI was due to fuel prices and electricity charges whereby both sub indices have declined by 38.2 per cent and 33.3 per cent respectively during April.
"I do not think deflation is going to happen in a truer sense. We can see food prices are still at elevated levels. Some items have been reporting quite substantial increment," he told the New Straits Times.
Malaysia will boost digital economy
Digital connectivity is a vital aspect in the daily lives of the people, more so when the country is facing the threat of Covid-19 pandemic.
Communications and Multimedia Minister Datuk Saifuddin Abdullah in a statement today said good and comprehensive digital connectivity is not only facilitating the people in their daily activities but it is critical to revive the country’s economy.
“Yesterday (May 22) , I held a meeting with representatives of various ministries, and agencies among them, Education Ministry, Higher Education Ministry, Communications and Multimedia Commission and the Malaysian Digital Economic Corporation (MDEC) on digital connectivity,” he added.
Saifuddin said the meeting was aimed at finding the best solutions so that the country’s digital infrastructure would be further enhanced in terms of coverage, quality and level of capability. (MalayMail)
Malaysia's new normal may be permanent
Consumer behaviour has possibly changed due to the Covid-19 pandemic, making the new normal permanent — something retailers need to prepare for to help the economy recover.
Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said his ministry has seen online sales of fast-moving consumer goods growing by 40 per cent due to the pandemic.
The minister made these remarks during an exclusive interview with Bernama for the Malaysians United vs. Covid-19 documentary.
Tengku Zafrul said 10 million workers have now gone back to work, injecting much-needed revenue into the economy.
As Malaysia is dependent on consumer consumption for Gross Domestic Product (GDP) growth, he said it is important to adapt to the psychology of the consumers and see how the coronavirus has affected their behaviour.
He also cautioned against having unrealistic expectations, as it would take time to restart the economy.
“If you go to the malls, you can see people are slowly going out again, but it takes time because the psychological impact of Covid-19 or the MCO has been such that people are very careful of going out and they only go out if they need to.”
Part of the response is adopting and adapting to e-commerce, which has seen more traffic and purchases since the MCO started. He said new buyers now account for 40 per cent of all online sales.
“Who is to say that this 40 per cent will stop buying (online) just because the shops are open? They’re now comfortable buying online; this could be the new normal even after getting the vaccine,” he said. (Malay Mail)
Malaysia and India restore trade ties
Malaysia voiced its commitment to further strengthen diplomatic and trade ties with India, after the world's largest edible oil buyer renewed purchases of Malaysian palm oil, in a sign of improving relations between the two countries.
Indian buyers contracted up to 200,000 tonnes of Malaysian crude palm oil for June and July, after a four-month gap following a diplomatic row.
Malaysia's exports to India in January to April fell to 96,145 tonnes, down 94% from the same period in 2019, Plantation Industries and Commodities Minister Mohd Khairuddin Aman Razali said on Thursday. (agriculture.com)
ING claims Malaysia falling prices call for more interest rate cuts
Deep negative inflation in Malaysia has driven the real interest rate to one of the highest in Asia – not a good thing for the post-Covid-19 economic recovery. We are adding a 50 basis point cut to ING's forecast for the Bank Negara Malaysia's policy rate this year, taking it to an all-time low of 1.00% by end-2020
Movement control dents inflation
Released today, Malaysia’s consumer price index for April posted a steeper than expected fall, by 2.9% from a year ago, beating the previous low of -2.4% at the height of the global financial crisis in 2009. This was a significant disappointment for the consensus of -1.6% YoY and our -1.8% forecast.
Core inflation stayed in positive territory in April and was also unchanged from a 1.3% rate in March, meaning most of the fall in the headline was due to food and oil-related CPI components. This isn’t a surprise though. Food prices typically rise during the month of Ramadan. This year they were weak because restrictions on movement dented the usual festive season demand. Still, despite two straight months of decline in this component, the yearly increase was unchanged at 1.2%.
The controls on movement and unusually weak Ramadan demand also depressed transport costs, which had already been dragged down by lower gasoline prices. A 21.5% YoY fall here surpasses the 20% fall during the GFC. Adding to these negative forces was housing, with a sharp swing from +1.6% YoY in March to -2.2% in April, which has not been seen in the last two decades. (ING)
Malaysian retailers forced to go digital
Malaysian retailers are under increasing pressure to move away from their traditional "brick and mortar" models in order to stay relevant and thrive, amid the Covid-19 pandemic.
In a recent Ernst & Young live poll conducted during a webinar for the retail sector, 70% of nearly 100 respondents shared that they were prioritising online sales and marketplace listings to improve their topline results in the immediate term.
The survey respondents recognised that there was a need to reinvent themselves, with digital strategies (55%) and business restructuring (31%) identified as key strategic options in the next 12 months, ahead of alternatives such as divesting non-core assets and mergers and acquisitions (M&As).
EY, a global leader in assurance, tax, transaction and advisory services, said regional sector trends were gaining headway locally.
"The accelerated disruption to the retail sector across Asean centers around three common trends. It is a matter of time before these trends are seen in Malaysia, with some already resonating locally," it said. (New Straits Times)
Malaysia's economy threatened by another political crisis
As countries globally grapple with the coronavirus outbreak and the resulting economic fallout, Malaysia faces an additional threat — the fragility of its current government.
That’s a “triple-whammy crisis” for the Southeast Asian country at a time when businesses and households have been hit by months of lockdown to combat the pandemic, said Tricia Yeoh, a fellow at Malaysian think tank Institute for Democracy and Economic Affairs.
“At the moment we know that the coalition that governs the federal government is operating at a very, very thin, fragile ... majority,” Yeoh told CNBC’s “Street Signs Asia” on Monday.
“As long as the current government doesn’t table any motion (in parliament), it is secured — but the question of political stability will continue to haunt the current government and has, of course, tremendous economic impact.” (CNBC)
Malaysia's chicken farms cut down on exports
Many poultry farms in Malaysia have cut down on its chicken export supply due to the country's lockdown. Even as the Malaysian government has gradually loosened the restriction measures, the supply has yet to recover fully and this has resulted in an imbalance in the supply and demand, causing import prices in Singapore to increase with 50%. (Mothership)
Malaysia My Second Home (MM2H) participants stranded abroad have been allowed to return to the country since May 14, following the easing of movement restrictions.
Tourism, Arts and Culture Minister Datuk Seri Nancy Shukri said there were 253 MM2H participants and their dependents who had requested to return to Malaysia.
"While the government is concerned and shared the plight of the stranded MM2H participants abroad during the Movement Control Order (MCO), we hope they understand the challenges faced by the government in dealing with the Covid-19 pandemic.
"The government's priority is to protect the people, including the MM2H community from Covid-19, as well as secure Malaysia's borders from the virus," she said in a statement today.
Nancy said all returning MM2H members must comply with the MCO requirements, which include undergoing a medical screening at the Kuala Lumpur International Airport, observe a 14-day mandatory quarantine, and bear the accommodation cost at the respective quarantine stations. (NewStraitsTimes)
Park Royal Kuala Lumpur today confirmed that it will close for renovations for 15 months in a move aimed at stemming losses due to the Covid-19 pandemic.The hotel’s spokesman, Edward Chryslo Abraham, verified an internal memo sighted by FMT which announced a “total closure of the hotel” next month and called on all its employees to accept the offered voluntary separation scheme (VSS).The hotel said the decision was made due to the movement control order (MCO), which it said had brought the hospitality industry to “a complete halt”.The company said its operations and finances had been severely impacted by the MCO, and that significant financial losses were projected for the year even after taking into account various cost reduction measures. (freemalaysiatoday.com)
Technology start-ups are urged to tap into the RM100 million Technology Start-ups Funding Relief Facility (TSFRF), for working capital and expansion.
"Tech start-ups that could show their competitive edge and growth potentials are encouraged to apply for the TSFRF, irrespective of the sectors they are involved in" said special investment officer to the Penang chief minister, Datuk Seri Lee Kah Choon.
TSFRF, by Malaysia Debt Ventures (MDV) aims to provide immediate and targeted cash flow support to technology start-ups. (New Straits Times)
For more information on the TSFRF please check out the official website: http://mdv.com.my/tsfrf3/
Malaysia’s economy as measured by GDP grew 0.7% in the first-quarter of 2020 (1Q20), the lowest growth in over 10 years due to containment measures taken to curb the spread of the Covid-19 pandemic. The 1Q20 GDP growth was the weakest since the third-quarter of 2009, when the economy contracted by -1.1%, Bank Negara Malaysia (BNM) governor Datuk Nor Shamsiah Mohd Yunus said in a live press conference today. “The moderation reflected the impact of measures taken both globally and domestically to contain the spread of the Covid-19 pandemic. Domestically, it mainly reflected the implementation of the Movement Control Order (MCO),” she added. The growth was also a sharp moderation from the 3.6% expansion recorded in 4Q19. (The Malaysian Reserve)
Malaysia’s industrial production index (IPI) dropped 4.9% in March 2020 from a year earlier due to the decrease in all three components of the index.
In a statement today, the Statistics Department said the IPI’s manufacturing component fell 4.2% while the mining and electricity segments declined 6.5% and 7% respectively.
"The Department of Statistics Malaysia also reports that on [a] year-on-year basis, the manufacturing sector output dropped 4.2% in March 2020 after recording an increase of 6.2% in February 2020. The major sub-sectors contributing to the decrease in [the] manufacturing sector in March 2020 were electrical and electronics products (-5.0%), Non-metallic mineral products, basic metal and fabricated metal products (-9.8%), and food, beverages and tobacco (-9.9%).
"The mining sector output dropped 6.5% in March 2020 as compared to the same period of the previous year. The negative growth was due to the decrease in natural gas index (-6.0%) and crude oil and condensate index (-7.1%).
"The electricity sector output decreased 7.0% in March 2020 as compared to the same month of the previous year,” the department said.
(The Edge Markets)
The motion of no confidence in Prime Minister Muhyiddin Yassin is unlikely to be heard come May 18 when the Malaysian Parliament sits. But a brewing political contest is underway. A full analysis on CNA.
Malaysia's government extended the time frame for movement and business curbs by another four weeks to June 9, amid a gradual reopening of economic activity stunted by the coronavirus pandemic. Earlier this week, businesses were allowed to resume business as usual, albeit under strict health guidelines, after having to close shop for two months as health authorities worked to contain the pandemic. Malaysia has so far reported 6,589 cases with 108 deaths. Existing rules under a conditional movement control order remain in place until the new expiry date in June, which include practicing strict hygiene and social distancing, Prime Minister Muhyiddin Yassin said in a televised address on Sunday. (Guardian)
TA Enterprise Bhd’s (TAE) application to ask the Securities Commission (SC) permission to withdraw its offer to buyout TA GLOBAL BHD (TAG) heralds the drastic implications that the coronavirus pandemic can have on capital markets. The regulator has a tough decision to make, considering that TAE has cited the adverse impact of the Covid-19 pandemic to TAG’s business as the reason for making the application. On Tuesday, TAE said it was seeking the SC’s consent to withdraw its conditional voluntary offer to take over its property arm TAG. The offer was first made on Feb 12, when TAG said it had received a conditional voluntary take over from TAE to acquire close to 40% shares in the former at a price of 28 sen a piece. TAE had already owned 60% of TAG at that point in time. The effects of Covid-19 on the hotel business, which is TAG’s core business, has been crippling. (The Star)
Malaysia's Parliament will allow a vote of no confidence in Prime Minister Muhyiddin Yassin moved by his predecessor Mahathir Mohamad, although it is unlikely that it will be held in the upcoming one-day sitting on May 18. Speaker Ariff Yusof said on Friday (May 8) the motion was in accordance with regulations. The Speaker on Thursday rejected a separate confidence vote in Tun Mahathir, who resigned as premier amid a political imbroglio in February, as unconstitutional. "As Speaker, I must study and ensure all motions submitted meet and abide by the Standing Orders to uphold the supremacy of the law," he said in a statement. However, Tan Sri Ariff only said the motion was accepted to be "brought to the upcoming House of Representatives meeting" without specifying if it would be on May 18 or in July when Parliament is due to reconvene. (Straits Times)
The small and medium enterprises (SMEs) have been urged to be more radical in enhancing their digital technology skills in order to be on par with their peers in other developed countries. Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed is making this call after finding there are SMEs that do not understand the technology and hence have failed to benefit from it. “There are SMEs that are knowledgeable, efficient and ready in e-commerce, but there are also those that have not realised its relevance. Therefore, exposure (to the technology) will be increased,” he said in an interview during TV3’s Malaysia Hari Ini programme. “It is time we changed radically in terms of lifestyle, implementation method and strategy in line with the current digital world,” he said. (MalayMail)
Moody’s Investors Service senior vice president Vikas Halan said rating changes for Asian National Oil Company's (NOCs), including Petronas, are likely to be small despite low oil prices straining their credit metrics. "We expect that additional notches of uplift owing to sovereign support could be incorporated in the ratings of most NOCs should their Baseline Credit Assessment decline," he said in a statement. Moreover, NOCs that have hedged the price risk for a portion of their production will be better positioned to withstand the sharp decline in crude prices in the near term. Indonesian state-owned Pertamina and Petronas have successfully raised US$3 billion and US$6 billion respectively via the debt market thus far this year. (Star Malaysia)
Those stranded in Kuala Lumpur and other states will be able to return to their hometowns between tomorrow and Sunday. Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob said the police, through Gerak Malaysia, had released travel schedules for those leaving Kuala Lumpur and other states. "Those in Kuala Lumpur can return to other states, and for those from Kuala Lumpur who want to fetch their children left in their kampung (hometowns) when the movement control order (MCO) began can do so. (NST)
Malaysia criticised the World Health Organisation on Monday (May 4) for advising adults to avoid palm oil in their diet during the COVID-19 outbreak and use alternatives such as olive oil. Malaysia, the world's second-biggest producer of palm oil, said such advice was "antiquated". Neighbours Malaysia and Indonesia together produce 85 per cent of the world's palm oil, but the industry has faced intense criticism from environmentalists over mass stripping of tropical forests to grow the lucrative crop. (CNA)
The country's 2020 gross domestic product (GDP) could hit the 2016 level if the Movement Control Order (MCO) is prolonged and the government is not taking steps to lift it by phases, said Minister in the Prime Minister's Department (Economy) Datuk Seri Mustapa Mohamed. In 2016, Malaysia's GDP stood at RM1.23 trillion. Last year, the GDP grew 4.3 per cent to about RM1.48 trillion. Mustapa said while health remains the government's top priority, it is equally important to ensure the economic livelihood of the rakyat. "The Malaysian Institute of Economic Research (MIER) has projected 2.4 million unemployment rate in Malaysia if the MCO is prolonged, meaning a lot of businesses are halted during this period. We already heard that people are losing jobs during this period. "The country's unemployment rate has been stable for the last few years at around 3.2 to 3.3 per cent. Bank Negara Malaysia expects that the rate will go up to 8.0 per cent if no actions is being taken. (New Straits Times)
The Health Ministry has urged the public to download the MySejahtera and MyTrace mobile apps to help frontline workers detect new Covid-19 infections in the country. Its director-general Datuk Dr Noor Hisham Abdullah said the MySejahtera app is used to conduct self-assessment, and also to help the ministry obtain early information on the health of an individual for prompt and effective action. (New Straits Times)
Just a day before the Malaysian government is set to allow a majority of businesses and activities to resume tomorrow in a conditional relaxing of the movement control order (MCO) restrictions, more than 420,000 have signed an online petition to urge the government to cancel this decision. Even this morning, at least hundreds or even thousands more individuals have been signing the online petition at Change.org, with more signatures added on by the minute. At the time of writing, 423,582 signatures have been collected for the petition. This petition titled Teruskan PKP. Batalkan PKP Bersyarat (Continue MCO. Cancel conditional MCO) was started two days ago by Rakyat Malaysia Prihatin, or on Friday (May 1) after the prime minister announced the conditional lifting of MCO restrictions from May 4 (tomorrow) onwards. In a brief five-point petition in the Malay language to the Malaysian government, the petition urged the government to immediately cancel the conditional MCO and to continue the MCO, saying that it did not want Malaysia to experience the same mistake of other countries who cancelled or relaxed their own MCOs. (Malaymail)
Seven states won't follow CMCO. Kedah, Sabah and Sarawak have decided not to follow the Federal Government’s move to relax the movement control order (MCO), which includes allowing most businesses to reopen with conditions. Selangor and Negri Sembilan have said they would restrict the number of businesses when operations resume on Monday (May 4). Pahang too said it would be maintaining the status quo on the MCO for now. Penang said it would implement the conditional MCO “in three phases” starting May 4. Chief Minister Chow Kon Yeow that although it is necessary to restart the economy in the state, it cannot take the risk to completely loosen the MCO. (The Star)
- EMEx classifies Malaysia 'travel restrictions' as Medium because visitors of all nationalities are heavily affected
Malaysia will allow the majority of businesses to resume operations from May 4, Prime Minister Muhyiddin Yassin said on Friday, easing restrictions imposed to contain the spread of the new coronavirus. Economic sectors that involve large gatherings of people will not be allowed to reopen, Muhyiddin said in a televised address. (Malay Mail)
Senior Minister Datuk Seri Ismail Sabri Yaakob said that small and medium-sized enterprises (SME) will be given permission to operate soon during the movement control order (MCO). He said that the relaxation for SMEs will be accompanied by suitable standard operating procedures (SOP). “Yes, big companies are allowed to operate. However, wait for the latest announcement because further relaxation will be given to micro businesses and SMEs with SOPs that are related to them,” he said in a press conference. (Malay Mail)
A coalition of 12 business associations today urged the government to implement temporary legislature to protect business owners from legal suits after the movement control order (MCO) is lifted. The group said it is of “paramount importance” for a Covid-19 Bill or Act, similar to Singapore’s Covid-19 (Temporary Measures) Act. It hoped this can be put in place when Parliament convenes on May 18 to protect business owners from legal suits when they are unable to fulfil their contractual obligations post-MCO. (FMT)
Earlier this month, the Department of Statistics Malaysia (DOSM) released the results of a survey titled “The Effects of Covid-19 on Economic and Individuals (Round One)” with a total of 168,182 respondents nationwide. According to the study, almost 47% of self-employed workers had lost their jobs – about 19,677 respondents. As for those who still had jobs, 35.5% reported a decrease in income by over 90%. If the percentage is taken on an actual scale, this means that out of 2.86 million self-employed workers, 1.34 million workers have lost their jobs and almost 540,000 experienced a 90% decline in income. This is only for those who are self-employed, not even taking into account workers who have employers. Although DOSM said these are not the official statistics, they can still be used to explain the current situation. By definition, the self-employed group involves farmers, breeders, fishermen and those who have their own businesses without hiring workers. This includes Mak Cik Kiah, who sells pisang goreng at a stall on her own. Meanwhile, the Malaysian Institute of Economic Research estimates that about 2.4 million Malaysians will lose their jobs due to the Covid-19 crisis. To make things worse, these estimates are based on a one-month implementation of the movement control order (MCO). This means that the numbers are likely to increase given the recent extension until May 12. (FMT)
The government may be required to dish out more cash and incentives to insulate the economy from negative shocks resulting from the extension of the Movement Control Order (MCO), experts said. Despite efforts to reopen some segments of the economy, most businesses continue to remain shuttered with the economy losing about RM2.4 billion every day during the MCO. Collectively, the four MCO phases would total 55 days which amount to an overall loss of RM132 billion. Institute for Democracy and Economic Affairs research manager in economics and business Lau Zheng Zhou said while the stimulus packages would have made major contributions to stabilise the economy in the immediate aftermath of the MCO, what is needed next is an exit strategy. (The Star)
Around 15% of the 4880 hotels registered with the Malaysia tourism, arts, and culture ministry are about to close permanently. The figure of 732 hotels is a result of a survey conducted by the Malaysian Assocation of Hotels. About 50% of the hotels are considering ceasing operations and 35% of hotels say they want to temporary halt their business. The assocation conducting the survey, however, also said that part of the closures were also a result of oversupply of hotel rooms in the markets with many unregulated and unctrolled homes turned into tourist accomodations through platforms such as Airbnb. The closures are expected to begin in the coming weeks when financial reserves of hotels are running out.
Malaysia has only 5 regions in the country designated as so-called red zones. The red zones are Ulu Benut in Johor, Labu in Negri Sembilan, Kuching and Kota Samarahan in Sarawak and Hulu Langat in Selangor.
- Green zones have zero active cases
Yellow zones have one to 20 active cases
Orange zones have more than 20 active cases
- Red zones have more than 40 active cases
Xpats Global wrote on the consequences of the Movement Control Order (MCO) for the participants of the Malaysia My Second Home (MM2H) programme:
There are members of the MM2H programme who are currently stranded abroad due to the MCO, says the Tourism, Arts and Culture Ministry (Motac). Minister Datuk Seri Nancy Shukri said she is aware of the plight of some expatriates who have not been able to return home to Malaysia. “In view of the seriousness of the imported cases that could wreck the current protocol to control the pandemic, the decision taken is that the MM2H participants who have been stranded abroad will have to wait till the lockdown is lifted, ” she said when contacted. The MM2H programme is under the purview of the Tourism, Arts and Culture Ministry. The country is currently in its third phase of the MCO, which started on March 18 and is expected to end on April 28. During this period, those on temporary work visas, student visas, employment passes and long-term social visit passes are allowed to leave Malaysia. However, they will not be allowed to return during the MCO. Many expatriates have been reportedly stranded abroad and unable to return to their homes in Malaysia. Since the inception of the MM2H programme in 2002, the government has given approvals to some 48,000 foreigners to reside in Malaysia. Participants of the programme enjoy the privilege of the Social Visit Pass, notably a multiple entry of 10 years and renewable visa. To date, the MM2H programme has gained popularity and has become one of the world most popular Residence By Investment Programme. Those who have further queries may email .
The King and Queen of Malaysia have been under quarantine since seven members of the palace staff tested positive for COVID-19 late March. Regardless, Tunku Azizah Aminah Maimunah Iskandariah, the Queen, is using her culinary skills to cook for hospital workers who are taking care of patients infected with the coronavirus. On her instagram page she started posting the food she has prepared for hospitals.
As expected, the Malaysian government has extended the general Movement Control Order (MCO) for the third time. The new end date is set on May 12. Prime Minister Muhyiddin Yassin announced that the infection rate looks to be more under control but not enough to easen measures. If the numbers continue to slow the government might gradually ease some restrictions phase by phase, he said. Under the MCO interstate and international travel are prohibited. Schools and non-essential businesses are shut down and Malaysians urged to stay home. Several locations with large numbers of infections were placed under an enhanced MCO further restricting people's movement.
Prime Minsiter Muhiddin announced in the same speech that the government is working on an economic recovery plan for the short, medium and long term. Among the initiatves are efforts to build capacity and skills in order to encourage domestic consumption and increase resilience of industries in order to create a more positive investing environment.
- Please click here for full details on the original MOC
The World Bank is concerned about Malaysia if the economic impact of the crisis drags on. The multilateral organizations warns that Malaysia has very little fiscal space left to counter the most serious consequences. Even a RM260b stimulus plan to retain jobs and and keep businesses afloat, as the government is currently undertaking, will probably not be enough. About 40% of the country's 16m workers are already left out of existing employment social protection according to the World Bank.
The government has declared more areas in Kuala Lumpur to be subjected to the enhanced movement control order (EMCO), which effectively prohibits residents from venturing outdoors at all times for two weeks. Senior Minister for Security Ismail Sabri Yaakob said the latest areas are in the northern part of the capital as well as the neighbourhoods surrounding the Kuala Lumpur Wholesale Market in Selayang. However, the market will remain open.
Privately held Golden Skies Ventures (GSV) has made a US$2.5 billion offer to fully take over the holding company of ailing state carrier Malaysia Airlines, with financing from a European bank, its executives told Reuters yesterday. GSV made the proposal a month ago, as airlines around the world were hammered by travel restrictions following the coronavirus pandemic. “(We have secured) in excess of US$2.5 billion from the bank. We will take about three to four months to get the long-term financing,” chief executive Shahril Lamin told Reuters in a phone interview. GSV also has a commitment from a Japanese private equity firm to inject immediate funds into the aviation group through an equity deal. The Edge weekly had first reported GSV’s proposal over the weekend. GSV declined to name the firms involved and said it was also in talks with other foreign banks and private equity firms for further funding. GSV has submitted its proposal to Morgan Stanley, the banker hired by the aviation group’s sole owner Khazanah Nasional Bhd. (FMT News)
Sabah, Malaysia's largest palm oil producing state, has halted all palm oil related operations after several new detections of the virus.Palm plantations and mills in Felda Sahabat, operated by the world's largest crude palm oil producer, FGV Holdings, would be temporarily suspended and public movements banned as authorities carry out coronavirus containment efforts. The state represents 25% of palm oil production in Malaysia. (The Star)
AirAsia Malaysia wants to resume domestic flights again if the government allows it on Wednesday 29 April.
Malaysia will probably keep its Movement Control Order beyond April 28 but with more sectors open for business. The government, which took office only last month after the previous ruling coalition imploded, has already announced a 260 billion ringgit ($59.56 billion) stimulus package to cushion the impact of the pandemic on the economy and its people. Its central bank forecast this month that the economy could shrink by as much as 2% or grow 0.5%, in what would be its worst economic performance in more than a decade. The economy grew 4.3% in 2019 in comparison. (Reuters)
Malaysia is going to delay plans to step up the use of palm oil in biodiesel. The country planned to manufacture biodiesel with a 20% palm oil component, known as B20, which was supposed to be implemented nationwide by mid-June 2021. The mandate will be delayed for regions that still need to implement it.
Statistics in Malaysia indicate that the country is doing a good job of testing and treating patients, resulting in low mortality and high recovery rates. Till recently, Malaysia had the highest infection rates in Southeast Asia but far less deaths than Indonesia or the Philippines. The Movement Control Order (MCO) seems to be working with infection rates on the decline over the last few days.
Malaysia has proposed that ASEAN should formulate an economic recovery plan post-Covid-19 (coronavirus) that focuses not only on the financial aspects but also on social safety nets, food security and education. The proposal was put forth during the Special ASEAN Summit on Covid-19 on Tuesday 14 April, via a video conference chaired by Vietnamese Prime Minister Nguyen Xuan Phuc and participated by heads of government of the bloc’s 10 member nations. In a statement today, the Prime Minister’s Office said the ASEAN economic recovery plan should contain measures to ensure a robust supply chain for the region’s 600 million people. (The Star)
Malaysian scientists have created a "medibot" that can make rounds on hospital wards to check on coronavirus patients. The barrel-shaped robot on wheels reduces the risk of infection for health workers. The robot costs around $3500 USD to produce and will be tested in the University's private hospital.
What to expect under phase 3 of the MCO:
- Extension period MCO to provide combat health care space COVID-19 in addition to prevent the spread of the outbreak
- Selected sectors to be allowed to operate on conditional basis.
- Rakyat needs to be prepared for a longer MCO, perhaps months before authorities can be sure that the spread can be 100% under control.
- Students will not be allowed to return to school until Covid-19 finds a cure, classes are to be conducted online.
- Government has ordered Chief of Police, the army, ATM and APMM to further strengthen enforcement on the country’s border control.
- Enforcement agencies are directed to tighten control on border areas, the country’s gateway to prevent smuggling of foreigners.
- No Ramadan bazaars, open celebrations for Hari Raya.
- Citizens might not be able to balik kampung.
The Malaysian government has extended movement and travel restrictions till Tuesday 28 April.
- Southeast Asia's latest inventions to combat the spread of the new corona virus. Click here for more.
Malaysia is one of the world's top rubber producers and a major source of condoms. The nationwide lockdown has disrupted supply chains forcing the contraceptive giant Karex, good for one in every five condoms globally, to produce 200 million fewer condoms than usual from mid-March to mid-April. The company warns that the world will definitively see a condom shortage. Karex is especially worried about the supply of condoms to developing countries. Karex had to close its three Malaysian factories during the lockdown which, for now, is due to last until Tuesday 14 April.
Malaysia's energy giant Petronas is working together with the country's Ministry of Health to develop a breathing aid. There is a need of a 'continuous positive airways pressure (CPAP) machina that can help patients breath easier. Het prototype CPAP waar Petronas aan werkt is oorspronkelijk ontwikkelt door haar partner het Mercedes Formule 1 team and the University College London (UCL). Mercedes can build 1000 CPAP machines a day within a week. It is not clear when the prototype is done or can be used for trials by Petronas.
Malaysia has approved the use of a cryptocurrency exchange to operate legally in the country. Tokenize Malaysia has been approved by the Securities Commission Malaysia to launch a digital asset exchange (DAX). In total, three market operators have been recognized to establish and operate cryptocurrency exchanges. "This followed the coming into force of “the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019” on Jan. 15 last year, designed to regulate DAX operators." Last year in June, Suruhanjaya Sekuriti Malaysia approved three crypto exchange operators conditionally: besides Tozenize Technology that were Luno Malaysia and Singery Technologies. Luno was the first to receive full approval. (Bitcoin.com)
- Please click here for our latest production on China, the Belt and Road Initiative, and the impact on Southeast Asia
Bank Negara Malaysia forecasted that Malaysia's GDP will fall between 5% and 2%. Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz told media that the government is focused on fiscal discipline. Many Malaysian economists believe that the country can weather the storm but argue that most decisions can cost the government politically. For example the implementation of Goods and Services Tax has to be considered to convince financial markets to avoid higher borrowing costs. The tax however will hurt Malaysian ctiziens especially the poorer ones. Malaysia currently has a very severe Movement Control Order in place. But even when that is gone social distancing measures might remain in place. Spending won't be back to normal, export growth rates will fall, and business activities will take time to get back to normal. A lot of the growth or fall also depends on global business activities.
Malaysia posted a mild decline in the headline IHS Markit Manufacturing PMI in March, relative to the rest of the Asean region which saw PMI falling to a record low last month. According to the latest data, Malaysia’s manufacturing PMI fell 0.1 in March to 48.4 from 48.5 in February, as the Covid-19 pandemic continued to cause demand and supply disruptions to the industry. Economists, however, say steeper contractions will be seen in the months ahead. (The Star)
We reported before on the second and more restricted phase of the Movement Control Order (MCO) in Malaysia. New additions to the order include that any travel to buy food, daily necessities, medicine or dietary supplements is restricted to 10km from a person's residence starting Wednesday 1 April until Tuesday 14 April. When people travel they are not allowed to be accompanied by another person unless there is a necessity.
If a person has to move from one place to another due to a special and particular reasons he has to get written permission from a police officer in charge at the nearest police stations. The movement of people has been restricted to the supply or delivery of food, daily necessities, medicine or dietary supplements, to seek healthcare or medical services or to perform any duty in relation to any essential service. The number of essential services has been reduced to 10 including food services, water, energy, communications and the internet. Security and defence, solid waste and public cleansing management and sewerage, healthcare and medical services, including dietary supplements, are also essential services.
Other essential services are banking and finance, e-commerce, as well as logistics confined to the provision of essential services, with the Regulations defining "essential services" as including any activity and process in the supply chain of each of the services. The Regulations also state that no person shall gather or be involved in any gathering in any premises within any infected local area, whether this for religious, sports, recreational, social or cultural purposes. "A person may gather or be involved in a gathering for the purposes of a funeral on the condition that the attendance to such ceremony shall be kept to the minimum, ” it said. The Regulations also state that every citizen, permanent resident or expatriate returning from overseas shall also get a health examination upon arrival in Malaysia before proceeding for immigation clearance at any point of entry and shall comply with any direction of an authorised officer. Those who break the rules of any of the provision under the Regulations or any direction of the Director-General or an authorised officer commits an offence and shall, upon conviction, be liable to a fine not more than RM1,000 or imprisonment for a term not more than six months or both. (The Star)
Grab Malaysia, the delivery app and part of the billion dollar company Grab Holdings based in Singapore, announced three measures to support local businesses, especially the small independent enterpreneurs and hawkers.
- A customised GrabPay link will be send to each eligible merchant, so that they can receive direct payments via chat, free of charge, and for orders made via Whatsapp, Facebook or phone. Customers, in turn, will be able to earn GrabRewards points as well.
For Grabfood orders the company will waive all commissions if customers choose to pick up the food themselves.
Grab will launch a ‘Local Heroes’ campaign to boost visibility and awareness for these restaurants across various digital channels. The campaign will begin on April 1 to hopefully generate more awareness for Malaysia's small, independent restaurants.
Read more about the measures on Grab's website.
Malaysia announced a second more restricted phase of the MCO. Senior Minister Datuk Seri Ismail Sabri Yaakob announced the plans on Monday. Eateries, markets, and petrol stations will only be allowed to operate from 8am to 8pm daily. The second phase will also see more roadblocks and checking on the movement of people. However, movement is still alowed and shops are still allowed to remain open in the designated hours. Also food delivery services like GrabFood and Food Panda will see shorter operation hours. The public is encouraged to use online payment methods for delivery. The ruling for houses of worship, for all religions, won't be changed. The government has restricted all forms of public gatherings or communal prayer sessions for the entire time the MCO takes. The government will give leeway to autistic and disabled Malaysians who are in need of therapy in outdoor settings. The second phase of the MCO starts Wednesday 1 April untill Tuesday 14 April.
- Please click here for full details on the original MOC
The economic impact of quarantines, lockdowns, and global panic starts to hit the Malaysian economy as well. The electronic manufacturing sector in Penang is hit hard by the COVID-19 impact. Test equipment and cip producers face serious shortages of raw materials. Frozen value-added seafood exporters are also hit hard because of low demand from Europe and cancelled orders. Flexible plastic packaging materials exporters were planning to meet the demands of the 2020 Tokyo Olympics but face serious disuptions. Three examples of sectors facing serious problems. (The Star)
Malaysia on Friday announced its largest economic stimulus package to date, with RM250 billion (S$83.6 billion) to be channelled towards supporting people and businesses grappling with the impact of the coronavirus pandemic. The new package largely includes one-off payments and discounts on utilities for people whose livelihoods have been affected by the pandemic, and to help small and medium-sized enterprises stay afloat and retain their staff. The government will also set up a 50 billion ringgit loan scheme for larger companies, which will offer guarantees of up to 80% of the sum borrowed to shore up working capital in the corporate sector. About 128 billion ringgit will be spent on public welfare measures, with 100 billion used to support businesses. (Straits Times)
The COVID-19 virus is spreading fast in Malaysia. An enhanced MCO is announced for residents of two areas in the Kluang district in Johor. They are not allowed to leave their homes for two weeks starting Friday 27 March. Basic foods and other essential products will be supplied by the government. Residents who need assistance can contact the special hotline at 07-773 5224/ 07-772 2434.
The transport ministry has created a webpage so Malaysian can track the latest updates: http://cccovid19.mot.gov.my/
The hotel sector in Malaysia has posted concerning stats about the impact of the COVID-19 crisis on hotels. About 9% have received a pay cut, 17% have been send on unpaid leave, and about 4% have been fired. Budget hotels are asking for more clearance by the government because they are designated as essential, to provide a stay to sleep for the people who are fighting the disease or distributing food around, but are not always recognized as such by local governments.
Malaysia's government announced that the movement control order (MCO) will be extended for another two weeks until April 14. The announcement was made by Prime Minister Tan Sri Muhyiddin Yassin. He asked students to delay their return to universities and companies that closed their offices to keep doing so. He also asked all Malaysian to not stock up food products because there is plenty.
- Please click here for full details on the MOC
The Securities Commission and Bursa Malaysia have announced that short-selling has been suspended until April 30, 2020, to mitigate potential risks from the heightened volatility and global uncertainties. In a joint statement, the regulators said the temporary suspension applies to intraday short selling (IDSS) and restricted short-selling (RSS) as well as intraday short-selling by proprietary day traders. The suspension will not apply to permitted short-selling (PSS). The SC and Bursa Malaysia reiterated the need for markets to remain open to ensure continued and reliable access to the Malaysian capital market, as it is vital for immediate and long-term market confidence. (The Star)
Malaysia plans to decide next week if its going to extend the restricted movement order. The government will also unveil a second stimulus package.
State governments are beginning to tighten the business hours of retailers and certain business premises in accordance with restrictions to tackle the Covid-19 crisis. Kelantan, Terengganu and Melaka have announced daylight hours only for sundry shops and 24-hour convenience stores, while Selangor and Penang are also taking action to ensure compliance with restriction orders. (Free Malaysia Today)
Companies that are exempted from the MCO must provide letters of permission to their employees in case they are stopped by police. (Malaymail)
- Please click here for full details on the MOC
All businesses in five Pahang districts must close from 7pm to 7am daily starting Saturday March 21. The districts are Kantan, Pekan, Jerantut, Bentong and Temerloh. The same order has already been implemented in Cameron Highlands since March 18. All shops, including eateries, convenience stores and petrol stations, are not allowed to operate for 12 hours as a preventive measure against the spread of COVID19. (The Star)
The Malaysian government announced to close it borders for all tourists. Malaysian citizens on the other hand, aren't allowed to leave the country for 2 full weeks. The new directions include a comprehensive restriction on movements and public gatherings, such as a ban on all religious, sports, social, and cultural activities. All houses of worship and business premises will be closed, with the exception of supermarkets, wet markets, grocery shops and convenience stores selling daily necessities. Most government premises, except those providing essential services such as water and electricity, will also be closed. Schools, universities and other education institutions will be closed until the end of the month. The measures will take effect on Wednesday 18 March till Tuesday 31 March.
- EMEx classifies Malaysia 'travel restrictions' as Severe because visitors of all nationalities are heavily affected
The Malaysian Government has put into effect the Malaysia Movement Control Order (MOC). It is also known as the Malaysia (partial) lockdown. Prime Minister Muhyiddin Yassin announced the order, which includes several restricted activities, in a televised speech.
The MOC will take effect starting Wednesday 18 March till at least Tuesday 31 March.
- Please click here for full details on the MOC.
- EMEx classifies Malaysia 'lockdown' as Severe because measures are nationwide and are having a significant impact on public life
Singapore's Temasek said to be keeping tabs on Keppel results as $4 billion bid hangs in balance
Temasek is prepared to drop a $4 billion bid for control of Keppel Corp should the Singapore conglomerate's next earnings report trigger a clause that allows it to walk away, according to people familiar with the matter.
The state investment firm is keeping a close tab on Keppel's financials, considering any significant impairment could trigger so-called material adverse change clauses, said the people, who asked not to be identified as the information is private. Temasek cannot adjust its offer price in accordance with the terms of the deal, leaving it little wiggle room, the people said.
Keppel shares dropped nine cents or 1.5 per cent to close at $5.95 apiece on Monday (June 29), 19 per cent below Temasek's offer price of $7.35.
Keppel is due to report its second-quarter earnings next month, while Temasek has until October to complete the deal, pending regulatory approvals.
Morgan Stanley is bullish on Singapore stocks and expects 14% returns
Morgan Stanley is bullish on Singapore stocks and expects as much as 14% returns for the MSCI Singapore index over the next 12 months.
In fact, investors could increasingly be looking to Singapore as a safe place to invest in as uncertainty roils the region, the investment bank said.
Covid-19 has ravaged economies worldwide, and Asia-Pacific nations have not been spared. (CNBC)
Singapore factory output falls 7.4% in May as biomedical growth cools amid circuit breaker
Singapore's manufacturing output shrank in May, reversing two straight months of expansion, as the pace of growth in the volatile biomedical cluster fell sharply.
Overall production dropped 7.4 per cent year on year in May after increasing 13.6 per cent in April, according to data released by the Economic Development Board on Friday (June 26).
The drop was in sharp contrast to expectations of continued expansion. Economists had tipped a 6.6 per cent rise, according to the median of their forecasts in a Reuters poll.
Mr Euben Paracuelles, economist at Nomura International, said; “We expect the decline to be sharper in June and therefore a large drop in GDP growth in the second quarter.” (Straits Times)
Singapore budget carrier Jetstar Asia to cut a quarter of its workforce
Budget carrier Jetstar Asia is cutting a quarter of its Singapore-based workforce in July as part of "difficult but necessary decisions".
The cuts of up to 180 people across all parts of its business affect 26 per cent of Jetstar Asia's workforce, even as most of the Singapore carrier's remaining employees will stay furloughed until the end of the year.
The announcement comes on Thursday (June 25) as the Qantas Group, which owns 49 per cent of Jetstar Asia, detailed its post-Covid-19 recovery plan. The three-year plan will involve measures including reducing the group's pre-crisis workforce by at least 6,000 people across all job roles, from baggage handlers to corporate non-flying workers.
The early retirement of some planes and possible return of leased aircraft also means some 220 pilots will have to be let go.
Jetstar Asia chief executive officer Bara Pasupathi said the "single biggest shock to the aviation industry" caused by the pandemic has forced tough decisions so the airline can "remain agile while staying true to our low-cost DNA".
Five Airbus A320 aircraft from Jetstar Asia's fleet will be retired, reducing the budget carrier's total fleet to 13 aircraft.
"There is no doubt that the travel market will look very different moving forward, so it is imperative that we change and adapt," he said in a statement.
Singapore Airlines and Scoot extend travel waiver for trips till end-August
More customers who booked trips with Singapore Airlines (SIA) and its budget arm Scoot will now be eligible to get refunds.
The two carriers said on Wednesday (June 24) that they have extended their refund policy to cover trips departing before the end of August. The policy previously covered trips departing before the end of July.
Passengers must have booked the tickets on or before March 15 in order to qualify.
The move comes with mass travel looking unlikely to resume anytime soon due to the ongoing pandemic.
Eligible SIA passengers can either get a full cash refund or flight credits, which will give them a bonus value of between $75 and $500.
Scoot passengers can request a full refund via their original method of payment or a 120 per cent refund in Scoot vouchers, valid for 12 months.
More information on the refund policy can be found on the airlines' websites. (Straits Times)
Singapore PM calls for general election to give new government fresh mandate
Prime Minister Lee Hsien Loong on Tuesday (June 23) said he has decided to call the general election now, while the Covid-19 situation is relatively stable, to “clear the decks” and give the new government a fresh five-year mandate.
In a televised address to the nation, Mr Lee set out why he has advised President Halimah Yacob to dissolve Parliament and issue the Writ of Election. A Writ of Election, which specifies the date of the polls, is expected to be issued shortly.
After the election, the new government can focus on the national agenda – which includes handling the coronavirus pandemic, the economy and jobs – and the difficult decisions it will have to make and to carry, he said.
The alternative is to wait out the pandemic, he said, noting however that there is no assurance that the outbreak will be over before the Government’s term ends next April. Experts say a vaccine will not be available for at least a year.
This general election will be like no other that Singapore has experienced, he said, not just because of the special arrangements to deal with Covid-19, but also the gravity of the situation and the issues at stake.
“The government that you elect will have critical decisions to make,” Mr Lee said. “These decisions will impact your lives and livelihoods, and shape Singapore for many years to come, far beyond the five-year term of the next government.”
The Prime Minister noted that under the Constitution the election must be held by next April at the latest.
GE2020 will take place in phase two of Singapore’s reopening after a two-month circuit breaker that was imposed to curb the spread of the coronavirus.
Mr Lee said he had to be certain of two things before calling the election – that voters can vote safely, and political parties can campaign effectively.
“After studying the issues, I am satisfied that both of these can be done,” he added.
Additional precautions will be in place on Polling Day, he noted, including more polling stations to reduce crowding, specific time slots for voting and safe distancing measures.
Election candidates can still go on walkabouts, livestream e-rallies and get more opportunities to speak directly to the electorate on TV in lieu of physical election rallies.
Mr Lee made the point that Singapore is not the first to hold an election during the Covid-19 pandemic – South Korea, Taiwan and several European countries have done so.
“With our arrangements and precautions in place, I am confident we can hold a proper and safe election,” he said.
Addressing the Covid-19 pandemic during the speech, Mr Lee said the Government has been fully occupied with the Covid-19 outbreak since the beginning of the year.
It quickly grew into a global crisis, killing nearly half a million people worldwide and disrupting the lives of countless more. Singapore imposed a two-month circuit breaker when the number of coronavirus cases here spiked, he said, and “made strenuous efforts to care” for migrant workers, who account for the vast majority of cases here.
He added that steady progress has been made in the dormitories, though it will take a few more months to resolve the problem. New community cases have come down sharply as well, and, most importantly, the number of fatalities has been kept low.
He stressed that the Government will continue to govern during the election period with the Cabinet still in charge after Parliament is dissolved. The public service will also function normally. “This is so in every general election. But I emphasize this now, because of the vital importance of ongoing operations against Covid-19, sustaining the economy and protecting jobs,” he said.
The pandemic has also caused a deep economic crisis, which Singapore has sought to mitigate through “massive fiscal action”, he said, pointing to how the House has passed four Budgets amounting to nearly $100 billion in support measures.
These decisive emergency actions have kept retrenchments and company closures low, and helped Singaporeans take care of their families and see through the immediate crisis, he said. (inquirer.net)
Singapore SMEs access new overseas markets under Grow Digital initiative
A string of mummy fair cancellations caused by the Covid-19 outbreak in recent months meant a drastic drop in income for homegrown seasoning food powder brand Lilo.
Earnings from such events had traditionally made up over 90 per cent of takings for the company, which produces food powders made with such ingredients as mushrooms and ikan bilis.
The brand owes its survival to reaching brand new customer segments online, not just in Singapore but also in regional countries such as Malaysia, Thailand and Indonesia.
Lilo accomplished this expansion to new markets by participating in the Grow Digital initiative, which allows small and medium-sized enterprises (SMEs) to sell their products online to overseas markets without needing in-market physical presence.
The joint initiative by Enterprise Singapore and the Infocomm Media Development Authority (IMDA) officially launched on Monday (June 22).
It links up firms with pre-approved e-commerce platforms and digital solution partners which can maximise reach and networks across multiple countries.
SMEs that sign up to adopt eligible solution packages by September 30 can receive grant support of up to 90%. (Straits Times)
More Singapore SMEs tapping government grants, initiatives to digitalise amid Covid-19 outbreak
Local small and medium-sized enterprises (SMEs) are increasingly stepping up their digitalisation efforts this year, making use of government grants and initiatives to do so, said Communications and Information Minister S. Iswaran on Friday (June 19).
The number of SMEs in the food and beverage and retail sectors which have received support from the Productivity Solutions Grant (PSG) has doubled to more than 3,500 from last year.
The PSG provides subsidies of up to 80 per cent for SMEs that adopt digital solutions pre-approved by the Infocomm Media Development Authority (IMDA).
More than 10,000 businesses have also joined the nationwide e-invoicing network, up from 1,000 in March.
Adopting e-invoicing is one of the conditions for companies to be eligible for a payout of up to $10,000 under the Digital Resilience Bonus, which was announced last month.
Mr Iswaran said the number of SMEs tapping government initiatives represented a "big pick-up", which the Government is keen to sustain.
"The focus through the Digital Resilience Bonus has been on F&B and retail because many of these businesses are local, and these sectors tend to be where we have a high concentration of SMEs," he added.
"I think they have also taken the brunt of (the impact) during the circuit breaker period in some ways because they rely so much on people moving in and out of their premises."
Mr Iswaran was speaking at White Restaurant's Suntec City outlet on Friday, the first day of phase two of Singapore's exit from the circuit breaker period, when food and beverage businesses were allowed to reopen for dining in.
White Restaurant, known for its signature white bee hoon dish, has adopted a range of digital solutions this year.
These include working with tech company and online food delivery platform Oddle to implement an integrated software platform to handle the taking of orders, delivery and marketing. (Straits Times)
Singapore focuses on job creation, investing in schools to counter Covid social divide
Singapore is focusing on job creation and education initiatives to help counter any social divisions that may be exacerbated by the Covid-19 pandemic, according to one of its top political leaders.
The Covid-19 pandemic has the “makings of a profound social crisis, in one country after another,” senior minister Tharman Shanmugaratnam said in a speech to the nation on Wednesday. The country will redouble efforts to strengthen its social compact, by ensuring people can progress through jobs, education, skills training and social support measures.
“Singapore cannot defy the global economic downturn,” Tharman, who’s also coordinating minister for social policies, said. “But we must absolutely defy the loss of social cohesion, the polarization, and the despair that is taking hold in many other countries. Never think these trends cannot take hold in Singapore.”
His comments come as total employment in the city state, excluding foreign domestic workers, fell by a record 25,600 in the first quarter, with labor market conditions likely to worsen in the upcoming quarter. Tharman, who’s said Singapore faces a ‘major and urgent challenge’ in this aspect, is chairing a council that’s seeking to create about 100,000 jobs and training opportunities in the coming year.
The number of unemployed residents in the country may reach a record this year, rising above 100,000 due to the impact of the pandemic, Deputy Prime Minister Heng Swee Keat said in parliament this month.
“The reality of the matter is that we face strong headwinds,” Tharman said. “As long as grave uncertainty hangs over the global economy, and trade and travel are down, new job openings in Singapore will very likely be fewer than job losses. So if we leave things to market forces, unemployment will rise significantly over the next year, or even beyond that if Covid-19 remains a threat.”
He said the government is working with companies, sector by sector, to take on Singaporeans through temporary assignments, attachments and traineeships. The public sector is also bringing forward hiring for future jobs, while a concerted effort is being made to help middle-aged and older workers, including scaling up a new mid-career program geared at creating more work opportunities. (The Print)
Singapore's exports fall 4.5% in May, after three months of growth
Singapore’s non-oil domestic exports (NODX) fell 4.5 per cent year-on-year in May after seeing unexpected growth in the previous month, mainly due to declines in the petrochemicals sector.
This reversed three straight months of expansion, with total trade contracting 25 per cent in May, according to official data released on Wednesday (Jun 17).
On a month-on-month seasonally adjusted basis, NODX decreased by 4.5 per cent, continuing a second month of decline after the previous month’s 5.1 per cent contraction.
The 8.8 per cent decrease in May’s non-electronic domestic exports outweighed the 12.5 per cent growth seen by the electronics sector.
Petrochemicals fell by 31.2 per cent, forming about 60 per cent of May’s overall NODX decline, due to the decrease in domestic exports to India, China and Indonesia.
Food preparations and non-electric engines and motors, which fell 24.5 per cent and 55 per cent respectively, also contributed to the decline in non-electronic NODX.
The expansion in the electronics NODX was buoyed by increases in ICs, disk media products and disk drives exports.
Total exports fell 23.9 per cent in May, while imports fell 26.2 per cent.
Exports to Singapore’s top 10 markets grew in May, though exports to the EU, Indonesia, China, Malaysia, Hong Kong and Thailand declined. The US, Japan and Taiwan contributed the most to the NODX growth.
Phase 2 of Singapore's reopening
Most businesses and social activities will be allowed to resume from Friday (June 19), the second phase of Singapore's reopening after the circuit breaker period, the authorities announced on Monday (June 15).
"Phase two is a significant step in moving towards a new 'Covid-19-safe' normal," said Health Minister Gan Kim Yong in a virtual press conference.
The announcement comes about two weeks after phase one started on June 2.
The period saw more workers returning to work, starting with businesses in critical sectors.
While schools and places of worship have reopened, most retail outlets remained shut.
Under phase two, retail outlets will be allowed to reopen with safe distancing measures in place.
Singapore, F1 cancel night race 2020 over Covid-19 restrictions
This year's Formula One Singapore Airlines Singapore Grand Prix has been cancelled, F1 and race promoters Singapore GP said on Friday (June 12).
The announcement regarding the Sept 20 event, one of the highlights of the local sporting calendar, had been widely expected, given the severe disruptions created by the coronavirus pandemic both locally and internationally.
Singapore GP said it was unable to proceed with the race due to the prohibitions imposed on access and construction of the event venue. Such works around the 5.063km Marina Bay Street Circuit, which normally start in May, have not commenced and will not be completed in time for the race in three months. (Straits Times)
Business sentiment in Singapore edges up from record low on economy's reopening
Business sentiment among firms in Singapore for the third quarter of this year improved slightly from a record low due to the economy's gradual reopening, but the outlook stayed murky on all the uncertainties ahead.
While the manufacturing and financial sectors are more optimistic for the July to September period as compared with the previous three months, other industries such as construction and services remain downbeat for the coming months, according to the Singapore Commercial Credit Bureau's (SCCB) latest quarterly survey released on Tuesday (June 9).
SCCB chief executive Audrey Chia said: "While it is still too early to ascertain if a V-shaped recovery can be expected, there are some signs of green shoots in certain sectors such as manufacturing, professional and IT services."
Overall business sentiment continued in contractionary territory for the third quarter at -5.16 percentage points, inching up from the previous quarter's all-time low of -7.88 percentage points.
All six indicators of the study - volume of sales, net profits, selling price, new orders, inventory levels and employment levels - reported negative numbers, the same as for the previous quarter. (Straits Times)
Singapore's Singtel Q4 profit falls 25.7% to $574m; dividend nearly halved to 5.45 cents
Singtel has posted a 25.7 per cent drop in net profit to $574.4 million for its fourth quarter ended March 31, 2020, from $773 million a year ago.
This came as the telco took a net exceptional charge of $302 million for the quarter, mainly arising from Bharti Airtel's provision for a one-time spectrum charge, the company said on Thursday (May 28).
Earnings per share stood at 3.52 cents for the quarter, down from 4.74 cents for the preceding year.
Operating revenue for Q4 fell 10.2 per cent to $3.90 billion, from $4.34 billion a year earlier. This was due to lower mobile service and equipment sales revenues across Singapore and Australia.
Singtel's board has proposed a final ordinary dividend of 5.45 cents per share, almost half the 10.7 cents per share a year ago. This will bring the total dividend per share for the year to 12.25 cents, from 17.5 cents a year earlier.
"This reduction in dividend payout is prudent to conserve financial headroom to cope with uncertainties in the current Covid-19 operating environment and the capacity to invest in 5G," Singtel said.
Once approved by shareholders at an upcoming annual general meeting, the dividend will be paid on Aug 18, after books closure on Aug 6. (Straits Times)
Businesses welcome Singapore-China 'fast lane'
Stringent requirements and costs may be a deterrent for some companies, but those with pressing reasons for travel will go ahead, say industry groups and businesses. The fast lane arrangement between Singapore and China is seen by the business community as a positive move, although they say the inconvenience and costs incurred could be a deterrent for some companies. (Business Times)
Singapore to launch wearable device for coronavirus contact tracing soon
Singapore introduced on Friday that it plans to launch a wearable gadget to assist with coronavirus contact tracing. It might be rolled out to the state’s 5.7 million residents if it proves to be efficient, based on native media.
“We’re growing and can quickly roll out a conveyable wearable gadget that can… not rely upon possession of a smartphone,” Singapore’s international minister Vivian Balakrishnan instructed parliament. “I consider this will likely be extra inclusive, and it’ll be sure that all of us will likely be protected.”
The brand new wearable gadget is Singapore’s try at a supplemental contact tracing technique and comes because the city-state grapples with one of many highest caseloads in Asia after being lauded for its “gold normal” response within the early levels of the pandemic. (BGP)
Over 100 Scoot cabin crew take up temp jobs at ams Sensors Singapore
More than 100 cabin crew from Scoot have taken on temporary employment with ams Sensors Singapore for a period of at least three months from May this year amid the Covid-19 pandemic, both companies said in a joint statement on Thursday (June 4).
ams Sensors Singapore designs and manufactures sensor solutions, while Scoot is the budget arm of national carrier Singapore Airlines (SIA).
This arrangement marks Scoot's first cross-industry partnership with a private-sector organisation, following various deployments to public hospitals and other government organisations. With this new deployment, nearly 400 Scoot crew members have been deployed to support other industries, the companies said. (The Straits Times)
Singapore Begins to Lift Lockdown on Battered Economy
Singaporeans got perms and car repairs Tuesday when the first phase of life after lockdown began, but that will not be enough economic activity to stave off what looks to be the worst recession in the state’s history.
If Singapore’s economy shrinks between 4% and 7% in 2020 because of Covid-19, which is what the trade ministry forecast last week, that would be the biggest downturn on record. The current record is from 1964, when the post-colonial economy shrank 3.1%, according to data from the World Bank.
As an election looms, raising the stakes for decision makers, other records are being broken. The downturn forced Singapore to dip into its reserves, marking the first time that it has done so twice in a year. The island nation has tapped into savings to unveil yet another stimulus, the “Fortitude Budget,” to help those hurt by the virus emergency. The budget gives 33 billion Singapore dollars for programs such as wage subsidies, worker training and digitalization of things like payments and invoicing. Soh Pui Ming, who heads the tax division of consulting firm Ernst & Young Solutions LLP, said she is particularly impressed by the aid for small and medium enterprises (SMEs). (voanews)
Singapore climbs to 16th place in global startup ecoystem rankings
Singapore has re-entered the best 20 in startup ecosystems globally, jumping five spots to clinch the 16th place out of 100 countries, according to the latest Startup Ecosystems Rankings report published by startup research company StartupBlink.
Singapore also ranked third in APAC, after Australia and China, and 26th amongst cities.
The US clinched the top spot globally, followed by the UK, Israel, Canada, and Germany. No Asian country entered the top 10, with China ranking the highest in the region at 14th place.
The country’s highly supportive public sector was noted for its rise in the rankings, alongside the island’s stability and infrastructure. (Singapore Business Review)
Singapore secured S$13b in investment commitments in Jan-Apr 2020
Singapore secured S$13 billion in investment commitments from January to April this year, already exceeding the Singapore Economic Development Board's (EDB) full-year projection of S$8 billion to S$10 billion, Minister for Trade and Industry Chan Chun Sing said in a media interview on Saturday.
The investments, in areas such as electronics and infocomm media, are expected to generate a few thousand jobs in the coming years, said Mr Chan.
Secured despite the ongoing Covid-19 crisis, these long-term investments reflect the sustained confidence that many major investors and businesses have in Singapore, he added. "Throughout the crisis, we have been known as a safe harbour." (Business Times)
Singapore's financial center may benefit from Chinese pressure on Hong Kong
Hong Kong, currently the world’s sixth-largest financial center, may struggle to retain its position as companies consider moving to neighboring Singapore to escape the wrath of a new Chinese draconian law, analysts say.
If realized, the prediction will be a blow to Hong Kong after months of political turmoil that has rocked the region.
The 27th edition of the global Financial Centres Index (GFCI) ranked Hong Kong marginally behind Singapore, the world’s fifth-largest financial center in 2010.
GFCI ranked Singapore as fourth-biggest in 2019, a position it lost in this year’s ranking.
But analysts think Singapore is set to outperform Hong Kong significantly and the gap between both countries’ rankings could widen further.
Jeffrey Halley, senior market analyst, Asia-Pacific at OANDA, said: “The big winner out of this could be Singapore if we do see an exit of companies from Hong Kong.
“If Hong Kong is imposing Chinese law by the backdoor in Hong Kong, it questions why companies need to be in Hong Kong.
“If they don’t want to be under Chinese law but want to be more under a Western legal system, then they may as well go to Singapore,” Halley added.(Business Insider)
Singapore considers Malaysia request to further suspend highspeed railway connection
Malaysia has asked for a further suspension of the proposed Kuala Lumpur-Singapore High-Speed Rail (HSR) line, ahead of a May 31 deadline to decide whether to proceed with the project. Disclosing this on Friday (May 29), Transport Minister Khaw Boon Wan said: "A few days ago, Malaysia asked us for the possibility of extending the suspension so that we can continue the discussion on what changes they have in mind." (Straits Times)
Singapore announces additional budget to help workers and businesses
Deputy Prime Minister Heng Swee Keat yesterday announced a $33 billion supplementary Budget aimed primarily at helping workers and businesses pull through the Covid-19 pandemic and the bleak economic outlook ahead.
Called the Fortitude Budget, Singapore's fourth Budget in less than four months sets aside $2.9 billion to extend job protection and co-pay salaries to help firms retain workers. It also provides for the $3.8 billion that went towards helping Singaporeans tide over the extension of the circuit breaker measures.
Together with the earlier Unity, Resilience and Solidarity Budgets, the Government is dedicating close to $100 billion - or nearly 20% of gross domestic product - to support Singaporeans in this battle against Covid-19, said Mr Heng, who called it "a landmark package, and a necessary response to an unprecedented crisis".
Singapore's economy has been deeply impacted by the global shocks caused by Covid-19, said Mr Heng, who is also Finance Minister, as he introduced the Budget in Parliament.
He noted that the resident unemployment rate rose to 3.3% in March, the highest in over a decade. The economy is now expected to shrink between 4% and 7% this year, potentially Singapore's worst recession since independence. (Straits Times)
Singapore's economy could shrink by 7%
After initially winning international praise for its efforts to control the spread of the virus, the number of cases in Singapore has soared.
The infection rate among the 323,000 migrant workers living in dormitories, who have driven the surge in coronavirus patients, is now approaching 10%.
There are 32,343 cases in Singapore, one of the highest rates on a per capita basis in Asia. Dormitory residents account for more than 90% of total infections.
The virus is dragging down the economy. The Ministry of Trade and Industry said on Tuesday that it expected gross domestic product to fall between 4 per cent and 7% in 2020. It had previously projected a contraction of between 1% and 4%. (Financial Times)
Singapore's NUS reopens campus in August
The National University of Singapore is planning to reopen its campus for the new academic year on Aug 10, and will hold some classes there and others online. To minimise intermingling of students, it intends to divide up its campuses into different zones. Students and faculty will have to keep within their designated zone for all activities, including attending classes and eating at canteens. Those taking up cross-faculty modules that require them to step outside their designated zone will have to take up the courses online. (Straits Times)
Coronavirus could be fatal for highspeed link between Malaysia and Singapore
May 31 was supposed to have been decision day on the future of the high-speed rail link between Malaysia and Singapore, but as the neighbours count their pennies amid the coronavirus-induced economic slowdown, all signs point to a further delay on a final decision. Analysts expect a lively debate in the months ahead on whether the 110 billion ringgit (US$25 billion) project – once touted as a “game changer” for often-testy bilateral ties – will remain viable in the post-pandemic era. This Week in Asia understands the two countries may soon announce an extension to the deadline, with both sides still keen to carry on with the development. Under the original agreement signed in 2016, construction on the project was to have been well under way by now. But the Pakatan Harapan alliance, unexpected victors of the 2018 polls over the long-ruling administration of then leader Najib Razak – an ardent supporter of the rail link – negotiated an extension until May 2020 to decide whether to go through with the project. The alliance cited the huge national debt incurred by Najib and agreed to pay Singapore S$15 million (US$10 million) for costs incurred for the delay. A unilateral cancellation would have triggered a far more hefty penalty, and Malaysia remains liable for that fee if it decides to go down that route. (South China Morning Post)
Singapore uses reserves in exceptional move
Singapore must draw on its past reserves only in exceptional circumstances - when its very existence is at stake - and now the country must do so to take care of its people, said President Halimah Yacob.
"If I look at Covid-19, it fits into that framework. We are in very exceptional circumstances. We are in a situation where our own survival and existence is at stake," she told reporters via video conference yesterday.
"We need to use the reserves in order to make sure that we are able to take care of the people in terms of health and safety... and ensure that they continue to have income."
President Halimah has already given her assent for about $21 billion to be drawn from the reserves to fund the Government's three support packages for businesses and workers that amount to $63.7 billion. On Tuesday, Deputy Prime Minister Heng Swee Keat, who is also Finance Minister, will announce more help for those unable to resume activities after the circuit breaker period ends on June 1, which could require a further draw on the reserves.
Madam Halimah said: "We will need to wait for the Budget that will be presented on Tuesday to see what the components are and how they will help Singaporeans, workers and companies."
The President said her decision to allow the reserves to be drawn down was not made lightly.
"Our past reserves are important for us, but we also want to make sure we can take care of this generation and the future generation. (Straits Times)
Singapore fears not having enough subscribers for tracing app
Officials in India and Singapore have warned that low take-up rates are hampering the effectiveness of contact-tracing apps in tackling COVID-19, while UK surveys have highlighted fears over data privacy and public confidence in the country’s own emerging app programme.
Several countries, including Singapore, India, Germany, Norway, Iceland and Australia have launched contact-tracing apps, which use technologies such as artificial intelligence (AI), Bluetooth and GPS to assess whether a user has been within a certain distance of an infected person for a period of time.
Oxford University researchers believe that contact-tracing apps must be used by at least 60% of a country’s population in order to be effective. However, in most countries that have launched apps, the percentage is much lower.
Singapore’s app development team, which is part of the city-state’s technology agency GovTech, admitted in an online post that “adoption has always been one of TraceTogether’s weaknesses”. Lawrence Wong, national development minister and co-chair of Singapore’s coronavirus task force recently suggested that the government may decide to make the app mandatory in order to lift takeup rates above the current 25%. “When we are ready with a [tech] solution… we will want everyone to take it up,” he said, adding that those without smartphones may be asked to carry a wearable device when they leave home. (globalgovernmentforum)
Singapore will allow transit passengers starting in June
Singapore, a regional travel and tourism hub, will gradually allow travellers to transit through its Changi Airport from June 2, the city-state's aviation regulator said on Wednesday.
Currently, foreign passengers may only transit through Singapore if they are on repatriation flights arranged by their governments. In March, visitors were banned from entering or transiting through the city-state to help combat the Covid-19 pandemic.
"This is part of Singapore's strategy to gradually re-open air transport to meet the needs of our economy and our people, whilst ensuring sufficient safeguards for safe travel," the Civil Aviation Authority of Singapore said. (Bangkok Post)
Singapore about to reopen more businesses
Singapore will allow more businesses to reopen on June 2 -- increasing the active proportion of the economy to three-quarters -- after a nationwide lockdown cut transmission of the coronavirus among citizens and permanent residents.
Restrictions will be eased in three phases -- allowing more businesses to resume operations and schools to reopen -- provided “community” infection rates remain low during the current so-called “circuit breaker” lockdown ending June 1 and health workers are protected, officials said at a press briefing Tuesday.
The government will extend more support to businesses and their workers, with a priority on companies that remain closed on June 1, National Development Minister Lawrence Wong said. Deputy Prime Minister Heng Swee Keat is expected to announce details of a fourth stimulus package next Tuesday in Parliament.
“We have to do this in a very careful and calibrated manner,” Wong said. “I hope we can all maintain our discipline for a while longer.”
Key points on what will reopen on June 2:
- Businesses in manufacturing and production such as semiconductors and engineering, and those in sectors like finance, insurance, wholesale, transportation and storage that don’t require public interaction.
- About a third of workers will be able to resume work on site, while others continue to work from home.
- The measures will allow normal operations for more than three-quarters of the economy.
- Additional consumer services such as motor vehicle servicing, all hairdressing services, school bookshops.
- Most retail outlets will not re-open immediately, and dining in at food and beverage outlets will continue to be disallowed for now.
- Schools will gradually reopen.
- Each household will be able to visit the household of parents and grandparents, subject to restrictions.
Singapore non-oil exports keep growing
Singapore’s non-oil domestic exports (Nodx) rose in April, due mainly to a jump in pharmaceuticals from a low base, Enterprise Singapore data showed on Monday (May 18).
Nodx increased 9.7% last month from a year earlier, backed by a 12.8% surge in non-electronics exports that included a 174.3% gain in pharmaceuticals, a 66.3% rise in food preparations and a 25% rise in non-monetary gold.
This is the third straight month of year-on-year gain for Nodx, despite a gloomy economic climate amid a global recession caused by the Covid-19 pandemic. It defies a consensus forecast of a 5% Nodx decline in a Bloomberg survey of analysts. (Straits Times)
Singapore sea marshals protect vital trade
The Covid-19 pandemic might have resulted in travel restrictions, but essential goods including food continue to come into Singapore, mostly via the sea.
Helping to ensure the safe passage of these merchant vessels is the task of 180 Squadron from the Republic of Singapore Navy (RSN), which boards ships as part of operations every day to check for stowaways, suspicious goods and activities.
Sailors from these boarding teams, affectionately known as sea marshals, now have to don protective gear, such as masks, goggles, and latex gloves, as part of precautionary measures against the coronavirus. They also adhere to safe distancing measures and have to speak louder or use hand gestures more often to communicate with ship crew as the masks muffle their voices.
The operations of these accompanying sea security teams continue as a critical operations unit of the Singapore Armed Forces, in order to deter bad actors such as terrorists and pirates. (New Straits Times)
Singapore health and education SME's adopt tech and digital systems
In response to the Covid-19 pandemic changing the way businesses operate, small and medium-sized enterprises (SMEs) in the healthcare and education sectors are getting more government support to adopt technology solutions for remote working, such as video consultation platforms and online learning systems.
Companies can receive subsidies of up to 80% from the Productivity Solutions Grant for adopting approved solutions under the expanded SMEs Go Digital programme.
Details of the scheme, which will run until Dec 31, were announced by the Infocomm Media Development Authority (IMDA) and Enterprise Singapore (ESG) on Friday (May 15). (New Straits Times)
Singapore Airlines Ltd said on Friday it would slash capital spending by 12% to S$5.3 billion ($3.72 billion) from a previously planned S$6 billion in the financial year ending March 31 as it grapples with the coronavirus crisis.
The airline's update from its last estimate in November was provided in slides released ahead of an analyst and media briefing to discuss its full-year results.
Singapore Airlines on Thursday evening reported its first-ever annual loss, citing poor fuel hedging bets and the collapse in demand driven by the coronavirus pandemic, saying the timing of any recovery was uncertain. (Bangkok Post)
Gaming hardware maker Razer Inc plans to dispense its locally produced masks in Singapore through a network of vending machines across the city-state, where it has become compulsory to wear them in public.
The company said it will initially deploy 20 machines at Frasers Property’s malls and JustCo co-working centres around the business district by June 1 when Singapore is set to lift lockdown measures.
Razer, known for its gaming gear such as consoles and keyboards, is among a wave of companies that have modified or set up new factory lines to meet a surge in demand for medical products during the COVID-19 pandemic.
The company said it has tied up with Sunningdale Tech Ltd, a precision plastic manufacturer, to soon double its surgical mask production capacity to up to 10 million a month after setting up a manufacturing line in April in Singapore.
Singapore, which keeps a national stockpile of masks, last month made it mandatory to wear them in public and has distributed reusable masks. (Reuters)
From haircuts to Happy Meals and desserts, people across Singapore were out on Tuesday (May 12) as stores reopened after weeks of closure during the "circuit breaker" to curb the spread of COVID-19. Among the first to be allowed to reopen were hairdressers and barbers. Quick-cut salons in particular saw snaking queues, with people waiting for their first haircut in weeks or even months. Read the whole article on CNA.
Singapore has allowed some businesses to reopen, as the city state takes its first steps towards resuming economic activity after weeks under a near total coronavirus lockdown.Businesses such as food manufacturers, barbers, specific food retail outlets and laundry services on Tuesday resumed operations following a drop in locally transmitted infections in the city state. The daily number of locally transmitted cases — excluding infections among migrant workers that have spiked sharply in recent weeks — dropped to just three on Monday. (Financial Times)
With its contact tracing app shoring up just 1.4 million downloads, Singapore is now making a new digital check-in system compulsory, from May 12, at selected locations including workplaces, schools, supermarkets, and healthcare facilities.
Singapore has rolled out a new digital check-in system to boost its contact tracing efforts and stem the spread of COVID-19, making it mandatory at certain locations across the island. The move comes weeks after the launch of a contact tracing app that has since garnered more than 1.4 million downloads, but that is well below the government's hope of reaching three-quarters of the local population.
Called SafeEntry, the digital check-in system collects data that can be used to facilitate contact tracing should an individual who visited the location be tested for COVID-19. QR codes are displayed at the entry and exit points of a venue, which visitors must scan and input their name, national identification number, and mobile number. Alternatively, they can use any identification card that carries a barcode such as their driver's licence, work permit, or student pass, which is then scanned by staff stationed at the venue's entry point. (Zdnet)
All passengers on Singapore Airlines (SIA), SilkAir and Scoot flights will be required to bring their own mask and wear it throughout the flight. Passengers of SIA and SilkAir must also observe safe distancing measures when embarking and disembarking from a flight and when queueing to use the lavatory. These measures, which are in accordance with a Civil Aviation Authority of Singapore directive, will take effect from 11.59pm on Sunday (May 10), SIA said in a statement posted on its website on Saturday evening. (Straits Times)
A robot dog enlisted by Singapore authorities to help curb coronavirus infections in the city-state politely asks joggers and cyclists to stay apart. The remote-controlled, four-legged machine built by Boston Dynamics was first deployed in a central park on Friday as part of a two-week trial that could see it join other robots policing Singapore's green spaces during a nationwide lockdown. (Business Insider)
- The latest example how Singapore uses tech to combat the spread of COVID-19. Read here an overview of other tools Singapore applies.
Just 10 out of 200 Singapore Airlines (SIA) Group's airplanes are currently taking to the skies with passengers. Of the remaining 95 per cent of the fleet, some have been deployed for cargo-only services, while a large number of planes are parked at Changi Airport. Meanwhile, 17 planes are parked at the Asia Pacific Aircraft Storage facility in the Australian town of Alice Springs, SIA said in response to queries on Wednesday (May 6). Seven of the planes are from SIA, six are from regional arm SilkAir and four are from budget arm Scoot. (Straits Times)
The first of more than 60 flights repatriating thousands of Indians stranded overseas by the coronavirus lockdown is due to set off on Thursday. Nearly 15,000 Indians are expected to return on special Air India flights from 12 countries over the next week. Passengers will pay their own fares and be quarantined on return. (BBC)
KooBits is a Singapore-based education software provider that has caught a wave of interest since the coronavirus pandemic shut down schools plans to raise $20 million from venture capitalists later this year to finance an overseas push. Its main product turns studying math into a competition that allows kids to play on their own or form teams. (Nikkei Asian Review)
Ninja Van, a Singapore-based logistics startup, has secured an additional $279 million in fresh funding as it works to scale its operations to keep up with the surge in e-commerce deliveries in six Southeast Asian countries. The startup, which has raised about $400 million to date, did not disclose its valuation — but an analysis of an early tranche of this round coupled with today’s announcement suggests that Ninja Van is now valued at about $750 million. Ninja Van claims it delivers more than a million packages across Singapore, Malaysia, the Philippines, Indonesia, Thailand, and Vietnam. It works with several major e-commerce firms including Shopee, Alibaba’s Lazada, Indonesia’s Tokopedia. In a statement, Ninja Van said it planned to use the fresh capital to make further inroads into the business-to-business sector, while also growing its other existing services. (Tech Crunch)
About 96% of all students took part in the month of full home-based learning, said Second Minister for Education Indranee Rajah in Parliament on Monday (May 4). "The few who did not participate were largely on medical leave, and those who did not participate persistently were encouraged to return to school," she said, in response to Ms Rahayu Mahzam (Jurong GRC), who had asked how schools assessed whether students have the necessary support at home for home-based learning. During this period of full home-based learning, about 3,300 primary school pupils and 700 secondary school students returned to school daily for several reasons, said Ms Indranee. Ms Indranee said that schools have loaned out more than 20,000 computing devices and 1,600 Internet-enabling devices to date, with some corporate support. (Straits Times)
The Regional Comprehensive Economic Partnership (RCEP) trade deal is still on track to be signed by the end of 2020, Singapore's Minister of Trade and Industry Chan Chun Sing said on Sunday. RCEP brings together the 10-member Association of Southeast Asian Nations (ASEAN), China, Japan, South Korea, Australia and New Zealand. The countries have made an offer to India, which pulled out of talks last November, to see if it is prepared to rejoin discussions. (New York Times)
Singapore will allow some schools and workplaces to resume operations in the next couple of weeks as the country eases restrictions to improve supply chains and the provision of essential services, senior officials told reporters on Saturday (May 2). Students sitting for national exams and those at some higher-education campuses will be allowed to return to school in small batches from May 19, Minister for National Development Lawrence Wong said. Priority will be given to pupils who require school facilities to do coursework or need additional teaching support. (The Star)
More businesses are announcing wage cuts or nudging employees to go on no-pay leave amid the ongoing COVID-19 pandemic, which has cast a dark cloud over many industries and the economy. The Singapore central bank earlier this week warned that the country will enter a recession this year, and cautioned that wages, instead of jobs, will “bear the brunt” of the downturn in the near term as companies tighten their belts on the back of declining revenue. Already, some companies have done so in recent months. (CNA)
Customers going grocery shopping at all FairPrice outlets will have to scan their 'National Registration Identity Card' for entry in support of contact tracing purposes. The measure, which is on top of temperature taking, has been progressively rolled out at selected FairPrice outlets since Monday (April 27), and will cover all stores by the end of the week, said a spokesman for the supermarket chain. Those who do not have their NRIC on hand can also submit personal details by scanning a QR code via national digital check-in system SafeEntry. The measures must help the government tracking who corona patients came in contact with. (Straits Times)
New services are being introduced to tap growing demand for online delivery in Singapore, with local taxi operator ComfortDelgro launching a food delivery service and Google enabling the discovery of food pick-up and delivery options across the city-state. There has been a significant spike in grocery and food delivery services over the past couple of months, as residents hanker down at home and abide by the country's safe-distancing measures to contain the COVID-19 outbreak. (zdnet)
Robots are being used to enforce social distancing restrictions in Singapore in a bid to prevent the spread of coronavirus. Singapore started using the O-R3 robot to warn people about keeping a safe distance from one another if out in public. The robot was deployed yesterday and as people went about their business, it drew stares as it patrolled the footpaths, advising people if they were too close to one another.
Singapore's Ministry of Health launched a new interactive COVID-19 dashboard. It shows key statistics as well as the overall picture and where necessary finer details. The dashboard is a colloboration between the Ministry of Health and GovTech.
Singapore Airlines has extended its wide-ranging flight cancellations for another month. The cancellation means 96% of the scheduled flights will stay on the ground till end-June.
The aviation sector is an important pillar of Singapore’s economy, supporting over 12% of the country’s GDP and 375,000 jobs. The Group is at the heart of the aviation ecosystem, with SIA, SilkAir and Scoot accounting for more than half of the passengers flying in and out of Changi Airport.
Customers whose flights are cancelled will receive flight credits and awarded bonus flight credits when rebooking. Out of the 140 destinations SIA is now only flying to 15 cities. The carrier tries to raise up to $15b with the help of Temasek, the government owned holding company worth upto 313b Singapore dollars. Airlines in the Asia-Pacific will see a revenue drop of $113b this year compared to 2019 according to the IATA. Virgin Australia, which is for 20% owned by SIA, has been the first regional victim of the crisis.
For the flight schedule please click here.
The 15 cities SIA still serves are:
Ho Chi Minh City
Singapore's economic development board reported reasonably good rates for the country's manufacturing sector. On a year-on-year basis, Singapore’s manufacturing output increased 16.5% in March 2020. This comes after a record contraction of about 20% in February 2020 on a month-on-month basis. Excluding biomedical manufacturing, output was unchanged. On a seasonally adjusted month-on-month basis, manufacturing output increased 21.7% in March 2020. Excluding biomedical manufacturing, output grew 2.5%.
Singapore is bracing for a sharper economic contraction this year than an earlier forecast of a slump of as much as 4%, as the coronavirus pandemic continues to spread globally and disrupts supply chains.The city-state is “very likely” to see a steeper fall in GDP, trade and industry minister Chan Chun Sing said Thursday in an interview with Bloomberg Television’s Haslinda Amin. “We are really concerned that worldwide, this is going to lead to a more serious problem than many had anticipated just a month ago.”The minister refrained from giving a new official forecast for GDP, but noted that connectivity among the major economies has been unsettled, hurting the short-term capacities and long-term capabilities of countries. The nation’s gross domestic product contracted an annualized 10.6% in the first quarter -- the most in a decade -- with the government in March forecasting a contraction of 1%-4% for the year. Citigroup Inc. economists on Tuesday warned that Singapore will witness a deeper recession because of the extended circuit breaker, with the economy now seen contracting 8.5% for the year. (Bloomberg)
Singapore is calling on all its citizens to download the contact tracing application used to track the spread of the coronavirus. Prime Minister Lee Hsien-Loong said in a national address that the citystate is developing other apps in addition to the existing TraceTogether app as well. He urged the importance of everyone's cooperation and hailed the example of South Korea. The tracing app was launched on March 20 and is said to be the first national BlueTooth tracing solution worldwide. It now has 1.1 million users which is just a bit less than 20% of Singapore's population.
Singapore will extend a partial lockdown until June 1 to curb a sharp rise in coronavirus infections in the city-state, Prime Minister Lee Hsien Loong said on Tuesday. The measures, which include the closures of most workplaces and schools and are called a “circuit breaker” by authorities, were initially set to run until May 4. But the city-state has seen a sharp jump in cases in recent weeks fuelled by infections in cramped migrant worker dormitories, many of which are under government-ordered quarantines. The city-state reported 1,111 new coronavirus cases on Tuesday, bringing total infections to 9,125, after a record daily jump of 1,426 cases on Monday. “We will therefore extend the circuit breaker for four more weeks,” Lee said in a televised speech. Lee said the extended lockdown period would help bring community cases down decisively and make sure infections in migrant dormitories do not spread into the wider community. “Then, provided we have brought the community numbers down, we can make further adjustments and consider easing some measures,” he said. Singapore’s finance minister said at a media conference that the government would extend economic support measures, including wage subsidies, to help businesses offset the impact of the longer lockdown period at a cost of S$3.8 billion. The World Health Organization’s regional chief said on Tuesday that Singapore – which has the highest number of reported cases in Southeast Asia – is facing “very difficult challenges” from a new rise in infections but has the healthcare system and risk management capacity to deal with it. (FMT News)
The recent surge in Singapore stocks from a bottom at the end of March suggests investors are starting to price in a post-coronavirus recovery, according to analysts with Citigroup Inc. The Straits Times Index has climbed 17% since hitting its lowest level in more than a decade as recent economic indicators including exports and cargo volumes growth have begun to indicate a year-on-year bottom. (Bloomberg)
One of Asia’s biggest independent oil traders, Singapore-based Hin Leong Trading, filed for bankruptcy protection at a court in Singapore on April 17, saying it failed to declare “about $800 million in derivatives losses over the years,” according to a Reuters report. The company is seeking a six-month moratorium on its roughly $3.85 billion debt load owed to 23 banks. The company’s founder and director, Lim Oon Kuim, 77, was cited in the filing as taking responsibility for directing the finance department to conceal hundreds of millions of dollars in losses from appearing on the company’s financial statements. The filing cites a collapse in oil prices and the coronavirus pandemic, which has hammered oil demand and pushed up costs for the company, as main reasons for the losses. The company “suffered about $800 million in futures losses over the years but these were not reflected in the financial statements,” Lim said in the filing, adding that “In this regard, I had given instructions to the finance department to prepare the accounts without showing the losses and told them that I would be responsible if anything went wrong.” The company also sold some of the millions of barrels of refined products it had used as collateral to secure loans from its banks. As a result, the company now faces a significant shortfall between the oil stocks it held and the inventories pledged to its banks. That could mean huge losses for the banks which provided Hin Leong Trading with billions in loans as the collateral they thought they have as a guarantee is no longer there. (Investvine)
The ongoing surge in cases, particularly in Singapore's migrant worker community, has pushed the country to the top when it comes to the number of confirmed infections in Southeast Asia. It took over from Indonesia which has almost 50 times its population.
Foreign ministers from 13 countries, including Singapore, have committed to maintaining global links such as transport and supply chain connections to minimise disruption and speed up recovery from the coronavirus pandemic. The participating countries issued a declaration to maintain these links on Friday (April 17), and have urged other countries to adopt a similar approach. In a Facebook post on Saturday, Foreign Minister Vivian Balakrishnan said: "We had our most recent teleconference yesterday evening, where we reiterated the importance of maintaining global connectivity such as transport and supply chain links, which will help all our economies recover more quickly when the pandemic eventually subsides." Singapore is delighted to join the 12 countries in moving forward with the Declaration, he added. The Ministerial Coordination Group (MCG) on Covid-19 was convened by Canada and includes the likes of Brazil, Germany, Indonesia and Britain. (Straits Times)
Singapore's non-oil domestic exports accelerated 17.6% in March compared to a year ago, boosted by a spike in gold shipments, according to official data released on Friday 17 April. The surge defied expectations of an 8.9% decline, as predicted by economists in a Reuters poll. It also exceeded Bloomberg's market consensus of an 8% drop and OCBC's forecast of a 9.9% decline. On a seasonally adjusted month-on-month basis, exports rose 12.8%, reversing the previous month's 4.7% decline. The sharp jump in exports was largely due to a 20.5% year-on-year rise in non-electronic shipments, according to trade agency Enterprise Singapore. Exports of non-monetary gold, which includes all gold not held as reserve assets by authorities, surged by 242.5% last month. It was followed by shipments of specialised machinery with a 54.2% rise and pharmaceuticals, with 48.6%. There has reportedly been a growth in demand for physical gold as a safe haven asset due to global economic uncertainty amid the COVID-19 outbreak, said Enterprise Singapore. (CNA)
Chan Chun Sing, Minister for Trade and Industry, said:
"Our non-oil exports rose 17.6% year-on-year in March due to increases in shipments of non-monetary gold, specialised machinery and pharmaceuticals. This is a little bit of good news for the economy which has been significantly impacted by Covid-19. But we must not be complacent. The next few months will be very tough as global demand shrinks and shifts. We will have to be on our toes to manage the challenges and retain jobs for our workers. Even as we navigate the near term challenges, we must also not lose sight of the future and continue to develop longer term plans which will help our businesses recover and create jobs for our people. We are determined to emerge stronger. CCS"
Singapore's big three banks are reporting a surge in enterprise loan applications over the past two months. Most requests come from micro and small businesses. Interest rates for government-assisted SME loans have come down to as low as 3%, down from a range of 6%-9% previously for unsecured loans. The Singaporean government estimates that 90% of the SME's requiring loans are those with annual revenue of under $10m SGD.
Singapore has recorded over the last week an immense surge in infection rates. Most new cases come from its large migrant worker community. They often live in cramped and unsanitary conditions in the wealthy country. Singapore's approach was widely praised for using a combination of rapid testing, contact tracing, and social restriction measures. That didnt stop the virus from spreading into the migrant worker communities.
All Singaporeans are now obliged to wear a face mask. Everyone who does not wear one risks a $300 SD fine for first-time offenders. Exemptions are made for those engaging in strenuous exercise, such as running or jogging, and children below the age of two.
Straits Times: Nine in 10 Singaporeans will receive a one-off payout of $600 each on Tuesday 14 April, as part of measures by the Government to help families tide over the coronavirus pandemic. The payout, which Singaporean Deputy Prime Minister Heng Swee Keat announced last Monday and dubbed the Solidarity Payment, will be directly credited to bank accounts of all adult Singaporeans. In February, the Government announced payouts of between $100 and $300 for every adult Singaporean. In March, this was tripled to between $300 and $900, with payouts due to be distributed from August to September. Last Monday, Mr Heng, who is also Finance Minister, said $300 of that payment had been brought forward to April and supplemented with a further $300 to form the Solidarity Payment. Those who qualify for the higher tiers will receive a further $300 or $600 in June. The Ministry of Finance (MOF) said the Government had received bank account details of about 90 per cent of the recipients who previously received payouts, including the SG Bonus in 2018. The MOF requested the remaining 10 per cent of adult Singaporeans to provide their bank account details via the secure Gov.sg form - https://go.gov.sg/spsc - before April 23. Recipients who fill in their bank account details before April 23 can expect to receive the payout to their bank accounts on April 28.
All Singaporean beaches are closed starting Saturday 11 April. The National Development Minister Lawrence Wrong said in a facebook post that the government has to what is right and necessary for all Singaporeans:
"It has been almost a week since the circuit breaker kicked in. The situation in “hot spots” like markets and parks is getting better. Our Safe Distancing ambassadors and enforcement officers are hard at work on the ground. And I thank everyone for doing their part and staying home.
I continue to receive a lot of feedback on the circuit breaker measures. I try to read all of them although I am unable to reply to them personally. Some say that it’s only a partial lockdown and ask for a full lockdown, which they think will be more effective. Others say the current measures are already too restrictive and causing mental and social problems for themselves and their families.
I understand that there are some who genuinely find it hard to adjust. We will do our best to support them. But this is a public health crisis, and we have to do what is right and necessary to protect Singaporeans. In theory, we could keep most places open, so long as safe distancing measures are strictly adhered to. But increasingly we see that this is hard to achieve. So tougher measures are necessary. Yesterday, we closed off selected areas in our parks and nature reserves. Today we will be closing all beaches in Singapore.
Remember the bottom line is that each one of us must drastically reduce our contacts with others for the circuit breaker to be effective. And we have to sustain this effort not just for a few days but till the end of the month at least. So stay home as much as possible. If you absolutely must go out (eg for food or groceries), keep a safe distance from others, wear a mask, and go home once you are done.
The health of all Singaporeans depends on each of us. We will get through this together."
Citi Singapore is giving its employees cash, as a one-off special compensation award, to ease the impact of the crisis. About 1600 employees will receive $1200 and the move is expected to cost $2 million.The move is only for staff with an annual base salary of $70000 or less or about 25% of its employees. Also additional benefits are provided such as complimentary insurance coverage from AIA and a preferred corporate rate for medical teleconsultations services at Whitecoat. Also the deadline for employees to utilise their carry-over leave is extended from 31 December 2020 to 31 March 2021. Time off for overseas vacations however are not allowed. Also season parking charges are refunded. Citi has also rolled out measures across Singapore and the Asia Pacific for its retail, small and medium enterprises, corporate and instutional clients. Measures like interest and fee waives, tenure extensions, alternative settlement arrangements, option to restructure borrowing and trade credit facilities, extension of liquidity, and loan payment reduction programmes are among the options. (Straits Times)
- Southeast Asia's latest inventions to combat the spread of the new corona virus. Click here for more.
If you would like to know how Singapore is doing these days, just follow the #stayhomesg on social media.
The Singapore Minister for Trade and Industry, Chan Chun Sing, is warning for supply chain problems and preparedness. The supply of food and other essentials should not be endangered by the current crisis. Worldwide restrict movements and closed factories and other businesses heavily disrupt the global supply chain. Air travel restrictions limited global air cargo capacity and connectivity. Seaport capacity is increasingly put under stress as well. Singapore has a strategy to deal with this kind of unprecedented challenge according to the minister. It uses a combination of stockpiling, import diversification and local production. The minister also warns for protectionist behavior of other countries to secure their own supplies. Within Singapore panic buying should be prevented at all cost as well.
- Please click here for our latest production on China, the Belt and Road Initiative, and the impact on Southeast Asia
A new website has been launched in Singapore to update users on crowd levels in malls. Space Out, the name of the website, estimates the crowd levels at the malls at different times of the day based on data provided by the malls themselves. This should make it easier for people to plan when they buy goods and services. The website was developed by the Urban Recevelopment Authority (URA).
Singapore announced that it is suspending the foreign worker levy for April. The foreign worker levy in Singapore regulates the number of foreign workers by a pricing mechanism. The levy liability starts from when the Temporary Work Permit or Work Permit is issued. It ends when its cancelled. The government also announced that it will enhances the Job Support Scheme. The planned budget to combat the economic impact of COVID-19 already promised financial support for aviation, tourism, and other sectors.
Singapore announces to close all schools and most workplaces besides essential services like supermarkets and banks for a month. The new measures will start Tuesday 7 April until Monday 4 May. Students will go into full home-base learning. If the situation doesn't improve the measuers can be extended beyond a month. Singapore recently reopened the schools but a second wave of infections is forcing the country to close them again.
- Emerging Market Experts (EMEx) made an overview how Singapore combats the spread of COVID-19 with tech. Click here for more information.
Singapore Parliament will introduce a new bill to protect individuals and companies who cannot fulfil their contractual obligations because of the COVID-19 crisis. The bill will be introduced next week. The proposed law will not absolve or remove responsibilities from those obligations but suspend them for a prescribed period, which is six months from when it is approved as a law by the Singaporean parliament.
The government of Singapore initiates unique measures to track and trace citizens movements during the COVID-19 crisis and to battle the spread of the virus in the city state. The latest app called Trace Together has been developed by Singapore's Government Technology Agency (GovTech) and the Ministry of Health. Users must provide explicit consent before their data can be used. Previously, infected Singaporeans and visitors were asked to recall where they been and who they were in contact with. In many cases that was difficult or incomplete. The app must make it easier to help patients recall their steps.
- VigilantGantry is an AI-driven automated temperature screening gantry that augments existing thermal systems to enhance the rate of contactless screening, saving time and manpower.
- Self-help Temperature Scanner uses existing contactless off-the-shelf battery-operated infrared thermometer and other off-the-shelf materials. The thermometer is retrofitted with a motion-sensing camera and a power source to enable it to do a temperature scan without human intervention.
- Ask Jamie chatbot: a virtual assistant designed to answer queries within specific domains on government agency websites. Launched in 2014, Ask Jamie has been implemented across 70 Government agency websites.
- COVID-19 Chat for Biz addresses questions from businesses related to COVID-19, including information on measures to help businesses in Budget 2020.
- Gov.sg WhatsApp provides citizens updates on the COVID-19 situation. This service is available in four languages, and the system has been optimised to send multi-lingual messages to all subscribers within 30 minutes.
- MaskGoWhere is a website that helps Singaporean households find the designated location, day and time to collect their allocation of masks.
The Monetary Authority of Singapore (MAS) has set the Singapore dollar's rate of appreciation at 0% at the prevailing lower level of its exchange rate policy band, as the economy braces for a deep recession. (Straits Times)
The government of Singapore has advised the public to avoid non-essential visits to malls and stay at home. People should only come outside for essential goods such as food and keep distance from other people at least one metre. When possible Singaporeans should buy their food and groceries online and reduce physical internaction. Groups of more than 10 are not allowed so visitors should expect queues before stores.
The government of Singapore has announced $48.4 billion on top of the $6.4 billion it already promised to support businesses, workers and families. To put it into perspective, the $48 billion is close to half of the Governments $106 billion Budget for 2020 and two times more tahn the $20.5 billion Resilience Package from 2009 to tackle the global finance crisis. The packages now and in 2009 were also the only times Singapore is drawning on its national reserves to fund special budget measures.
The Straits has summarized Singapore's strategy to fight the spread of the COVID-19 virus:
Health Minister Gan Kim Yong said the goal is to slow down the infection rate and maintain it as low a level for as long as possible. In the mean time Singapore can conduct epidemiological investigations, contact tracing and quarantining of close contacts to prevent further spread and to preserve hospital capacity:
1) Reduce importation of cases:
- Short-term visitors from all countries are barred from entry and transit
- Only Singaporeans, PRs and long-term work pass holders can enter Singapore
Residents are advised to not travel and if they do might face penalties such as unsubsidized COVID-19 care
2) Detect and isolate cases early
- Border checks intensived to detect and isolate cases early by temperature screening, health checks, and swabbing.
- Surveillance systems in hospitals, polyclinics, and the over 900 other clinics offering attractive subsidised rates for patients with respiratory illnesses to seek treatment and detect them early.
- Contact tracing and quarantining them. About 4000 contacts can be traced per day. Also technology is used.
3) Social responsibility and personal hygiene
- Penalties when not following quarantine orders and stay-home notices.
- Public campaigns telling people how to wash their hands and where.
- Particular attention to elderly citizens, telling them to stay inside as much as possible, and to avoid large gatherings.
4) Governmental fight
- Research on what treatment works best and sharing them with other countries.
- Managing healthcare capacity, making sure ICU care is at full range, and can be expanded when needed.
- Preventing local clusters in few places. No sharp peaks or long tails.
- When local clusters cant be prevented hoping for large amount of infections to reach bigger immunity levels but by managing the spread to make sure not too many people get sick at the same time.
Pilots of Singapore International Airlines will have to take some days of no-pay leave a month from April. The airline has to take cost-cutting measures the national carrier is putting into place. Also executives and associates will have to take no-pay leaves according to the new rules. Both Singapore International Airlines and SilkAir have also changed their services. Click here for more details.
Deputy Prime Minister Heng Swee Keat will present a supplementary Budget in Parliament on Thursday 26 March and detail additional support measures to help workers, businesses and households cope with the coronavirus outbreak. This move comes 5 weeks after the government announced the budget including a $4bln package to help workers and firms affected by the outbreak. (StraitsTimes)
Singapore also announced an unpredecented travel measure of barring all short-term visitors, including tourists.
- EMEx classifies Singapore 'travel restrictions' as Severe due to new measures affecting all visitors
Singapore re-opens its kindergartens and schools starting Monday 23 March. Staff and students returning from overseas destinations arriving on 14 March or after have to quarantine for 14 days. All co-curricular activities (CCAs) along with the National School Games will be suspended and the Singapore Youth Festival (SYF) Arts Presentation deferred, for two weeks. (Straits Times)
- EMEx classifies Singapore 'lockdown' as Medium due to re-opening of schools and limited social restrictions
The Ministry of Health has advised Singaporeans to defer all non-essential travel abroad. This advisory will apply for 30 days. All travellers will be subject to the prevailing travel measures imposed by their destination countries, and those imposed by Singapore upon their return home. As the situation remains uncertain and will continue to evolve, Singaporeans are advised to review their travel plans for the coming months after the March school holidays as well.
- EMEx classifies Singapore 'travel restrictions' as Medium due to advisory nature of new rules
Singapore Minister for Health Gan Kim Young and Minister for National Development Lawrence Wong announced new measures for Singapore in regards to the COVID-19 or corona virus.
- Click here for full update on latest Singapore measures
Indonesia among preferred markets in ASEAN, DBS says
Indonesia is still among the preferred Southeast Asian markets for investment amid the country’s continuous fight against COVID-19, backed by strong household spending and a young working population, Singapore’s largest bank, DBS, has stated.
In a report titled “CIO Insights 3Q20” released on Monday, DBS noted that the country would quickly return to normalcy after the relaxation of the pandemic-related restrictions, while household spending – which contributes more than half of its gross domestic product (GDP) – will continue to drive the recovery.
“The investment strength in Indonesia lies in its favourable demographics. Indonesia is the third-most populous country in Asia, the fourth globally, and has a high proportion of young working adults,” the report reads.
The Indonesian market, along with regional neighbour Singapore, trade at around 13 times forward price to earnings and are deemed to be the cheapest markets in ASEAN, leaving room for earning adjustments, the report stated.
Meanwhile, with the government’s fiscal stimulus and monetary easing support, together with Indonesia’s structural demographic strength, DBS expects the economic woe from the pandemic to be over by the second quarter of this year. (The Jakarta Post)
Indonesia Nears Deal With Central Bank on Deficit Funding
Indonesia’s central bank may buy billions of dollars of sovereign bonds at zero interest, or below its benchmark rate to help the government finance a wider deficit arising out of stimulus measures to counter the fallout of the coronavirus pandemic.
Bank Indonesia may bear the full cost of an expanded health care and social safety net budget of 397.6 trillion rupiah ($27.6 billion) by buying government bonds at zero interest rate, Finance Minister Sri Mulyani Indrawati told lawmakers in parliament Monday. Discussions are also ongoing for the monetary authority to pick up about 123.5 trillion of bonds at 1% discount to the seven-day reverse repurchase rate to help micro-, small and medium enterprises, she said.
The central bank may receive the benchmark rate on bonds bought to assist non-SME corporates, according to Indrawati’s presentation in parliament. The government will bear the full cost of extending 329.3 trillion rupiah in stimulus to other sectors of the economy, it showed.
The finance ministry expects to reach an agreement with the central bank on the composition of the so-called burden sharing this week that may involve private placement of bonds with the monetary authority and market auctions, Indrawati said. The central bank’s interest burden from funding the deficit is seen at 37 trillion rupiah annually, or 54.8% of the total cost, she said.
The central bank is ready to share the burden of financing the budget deficit, Governor Perry Warjiyo told the lawmakers. (Yahoo Finance)
Indonesia Listed Companies to Pay Lowest Tax Rate in Southeast Asia
Some of Indonesia's listed companies will enjoy a lower income tax rate of 19 percent this year and next year, with a further 3 percent cut starting in 2022 that would make the rate lower than Singapore's corporate income tax rate, the Finance Ministry said last week.
The government has already lowered the income tax for companies to 22 percent last month as part of its stimulus package to ease the impact of the Covid-19 pandemic to Indonesia's economy.
Further cuts for listed companies, would improve the competitiveness of Indonesian companies, that until recently still pay one of the highest corporate income tax rate in Asia.
"I think the policy is on point to strengthen the competitiveness of our businesses," Samsul Hidayat, the executive director of the Indonesian Listed Companies Association (AEI).
The cut introduced by the government would allow some listed companies to pay tax at a 16 percent rate, lower than 17 percent rate in Singapore which currently offers the lowest corporate income tax rate in Southeast Asia. (Jakarta Globe)
Grab Helps Indonesia Economy Become More Resilient, Study Shows
Grab's ride-hailing, food delivery and digital retail services have strengthened Indonesia's economic resiliency and increased the income of millions of Grab partners across Indonesia before the pandemic, a study from the Centre for Strategic and International Studies, or CSIS, showed.
"The gig economy sector through a digital platform such as Grab has an important role in maintaining a country's economic resiliency," Yose Rizal Damuri, head of CSIS Economic Department, said on Friday.
"It also improves informal workers' life quality by 12 percent and their financial inclusion. That will boost the Indonesia economy in the long term," he said.
CSIS conducted their study in January 2020, two months before Indonesia confirmed its first Covid-19 case. The research looked into the improvements experienced by the ride-hailing app workers and its impact on Indonesia's economy.
The research firm analyzed over 5,000 workers in all four Grab’s services in 12 cities – Greater Jakarta, Surabaya, Bandung, Medan, Makassar, Semarang, Yogyakarta, Denpasar, Palembang, Bandar Lampung, Balikpapan, and Manado. Grab said earlier that it had more than 5 million partners working on its platform. (Jakarta Globe)
Indonesia-Turkey in Talks for Infrastructure Cooperation
Indonesia will soon start discussions on potential cooperations in infrastructure with the Turkish government after Public Works and Housing Minister Basuki Hadimuljono held an online meeting with Turkish Trade Minister Ruhsan Pekcan on Wednesday.
The bilateral meeting, part of the Indonesia-Turkey Construction Business Forum, is aimed at increasing cooperation between the two countries at many levels, from government-to-government (G2G), business-to-business (B2B) to public-private partnership (PPP).
Minister Basuki said many investment opportunities in infrastructure development are still available in Indonesia. The sector is one of President Joko "Jokowi" Widodo's priorities and any future cooperations with Turkey won't be limited to road construction.
"There will also be investment opportunities in building clean water and sanitation facilities, managing water sources, housing, creating training programs for construction workers and knowledge and technology transfer," Basuki said.
Limited government funding has forced the ministry to launched several initiatives to find alternative funding for infrastructure development, with private investment deemed the most feasible option so far.
According to a 2020 presidential decree, private investment can make up 42 percent of total funding in infrastructure projects managed by the state. (Jakarta Globe)
‘Crisis like no other’ will shrink Indonesia’s economy, IMF forecasts
Indonesia’s economy is on track for a significant contraction this year as the coronavirus crisis has hit the global economy more severely than previously expected, the International Monetary Fund (IMF) has forecast.
The United States-based institution projects that Southeast Asia’s biggest economy will contract by 0.3 percent this year, according to the June update of the World Economic Outlook titled A Crisis Like No Other, An Uncertain Recovery, which was published on Wednesday. The global economy, meanwhile, is expected to shrink by 4.9 percent.
“The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast,” the IMF said, highlighting a reversal of progress on poverty reduction and job creation.
“In countries with high shares of informal employment, lockdowns have led to joblessness and abrupt income losses for many of those workers,” the report reads. “The adverse impact on low-income households is acute, imperiling the significant progress made in reducing extreme poverty in the world.”
More than 3.06 million Indonesians have either been laid-off or furloughed as of May 27, according to Manpower Ministry data. The government expects that 5.5 million of the country’s workforce, dominated by those working in the informal sector, will lose their jobs this year following slowing economic activity.
The COVID-19 pandemic has disrupted businesses and factories as people are forced to stay at home to contain the coronavirus spread. Indonesia’s economic growth cooled to 2.97 percent in the first quarter as household spending and investment plunged.
Finance Minister Sri Mulyani Indrawati has projected that the economy will contract by more than 3 percent year-on-year in the second quarter. She expects full-year growth of 1 percent under the baseline scenario but a full-year contraction of 0.4 percent under the worst-case scenario.
On Wednesday, the IMF also trimmed Indonesia’s economic growth forecast for next year to 6.1 percent, down from its earlier projection of 8.2 percent, as the path to recovery remains uncertain.
The global economy, meanwhile, would plunged into the deepest recession since the Great Depression of the 1930s, as household spending weakened, while investment subdued, the fund projected.
“The projections of weaker private consumption reflect a combination of a large adverse aggregate demand shock from social distancing and lockdowns, as well as a rise in precautionary savings,” it reads. “Moreover, investment is expected to be subdued as firms defer capital expenditures amid high uncertainty.”
Uncertainty surrounding the global economy, including the trajectory of the virus and vaccine trials, are key factors shaping the outlook, the report goes on to say.
“The downturn could be less severe than forecast if economic normalization proceeds faster than currently expected in areas that have reopened,” it reads, while adding that downside risks, such as future outbreaks, remain significant.
Policymakers, the IMF suggests, should consider strengthening fiscal stimulus measures to respond to deteriorating economic conditions.
“Temporary targeted cash transfers to low-income households that kick in when the unemployment rate or jobless claims rise above a certain threshold—can be highly effective in dampening downturns.”
The Indonesian government has allocated Rp 695.2 trillion (US$ 49.3 billion) worth of COVID-19 spending to boost economic growth and strengthen healthcare systems amid the pandemic.
The IMF’s gloomy projection adds to an already long list of weakening expectations for the Indonesian economy made by other international institutions.
The World Bank has projected 0 percent growth for Indonesia this year as the global economy is expected to see its deepest downturn since World War II.
The Organization for Economic Cooperation and Development (OECD) expect the Indonesian economy to shrink 2.8 percent this year even if the government manages to avoid a second wave of infections. If it is hit by a second wave, however, the economy could witness a 3.9 percent contraction.
(The Jakarta Post)
Clouds thicken over Indonesia’s economic growth as uncertainties persist
The Indonesian economy faces gloomier skies this year as the COVID-19 pandemic has yet to show any signs of subsiding, forcing government officials, the central bank, economists and international institutions to project weaker and weaker growth as the outbreak unfolds.
The Asian Development Bank (ADB) projected Indonesia’s gross domestic product (GDP) to shrink 1 percent this year, the weakest since the 1998 Asian financial crisis as the coronavirus pandemic has inflicted a “significant economic disruption” in the country. The forecast is a down revision from 2.5 percent growth it projected in April, according to the ADB’s Asian Development Outlook Supplement.
“The COVID-19 pandemic has caused significant economic disruption globally and in Indonesia, with adverse impacts on jobs and livelihoods, especially among the most vulnerable segments of society,” ADB country director for Indonesia Winfried Wicklein said in a statement on Thursday.
The coronavirus has forced people to stay at home to contain the disease, disrupting business activity as shops, factories and offices are required to shut their doors. As economic activity slows, millions of Indonesians have lost their jobs and run the risk of falling into poverty.
The government estimates 1.8 million to 4.8 million people may fall into poverty this year, while 3 million to 5.2 million may lose their jobs because of the severe economic impact of the pandemic.
“Timely implementation of policy measures, such as those included under the Indonesian government’s economic recovery program, will go a long way toward helping Indonesia bounce back and safeguard the welfare of households,” Wicklein said.
The government has allocated Rp 695.2 trillion (US$49.63 billion) in funds, the latest increase from the previous allocation of Rp 677.2 trillion, for health care and the economic stimulus package to soften the outbreak’s impact.
The economy grew 2.97 percent in the first quarter this year as household spending and investment growth plunged, dragging down the country’s economy to its weakest growth since 2001 as it began large-scale social restrictions (PSBB) to curb the spread of the virus.
After almost three months of the PSBB, the country began to gradually reopen the economy, albeit at 50 percent capacity, to boost economic growth and curb job losses.
“While the relaxation of mobility restrictions in early June will help economic activities resume, many uncertainties persist,” said ADB country economist for Indonesia Emma Allen. “The government’s economic recovery program provides an agile response to the crisis.”
Previously, several other multinational organizations also projected a grim outlook for the economy.
The World Bank projected zero percent growth for Indonesia this year as the global economy is expected to see its deepest downturn since World War II.
The Organization for Economic Cooperation and Development (OECD) projected the Indonesian economy to shrink 2.8 percent this year even if the government manages to avoid a second wave of infections. If it is hit by a second wave, however, the economy could witness a 3.9 percent contraction.
The coronavirus has infected over 43,800 Indonesians and killed at least 2,300 as of Friday afternoon, official data show, from just two positive cases in early March.
Finance Minister Sri Mulyani Indrawati said on June 16 that the PSBB acted as headwinds that would cause an economic contraction by 3.1 percent in the second quarter. She expected GDP growth of between zero and 1 percent while maintaining the government’s projection of 2.3 percent growth in the baseline scenario and 0.4 percent contraction in the worst-case scenario.
“We are looking at economic developments and will try to mitigate the downside risks so that it will not get worse,” she said, adding that the government hoped for the recovery process to start in the third quarter.
Just days after Sri Mulyani’s statement, Bank Indonesia lowered its growth projection as it cut the benchmark interest rate in an effort to support the economy. The central bank now projects the country’s GDP to grow between 0.9 and 1.9 percent this year from the previous estimate of 2.3 percent.
Experts and economists are also projecting a weaker economy and a slow recovery for the country.
State-owned Bank Mandiri economists projected on June 17 that the country’s GDP would contract by 3.44 percent in the second quarter this year and by 0.95 percent in the third quarter before the economy bounces back to grow 1.62 percent in the fourth quarter.
Fourth quarter recovery, however, would only be possible if there is no second outbreak in the country. Should the recovery go smoothly, Bank Mandiri industry and regional research department head Dendi Ramdani projected the economy to grow 0.02 percent this year.
Major Indonesian fund manager Batavia Prosperindo Aset Manajemen (BPAM) forecast the country's GDP growth to range from 0.5 percent to a 0.5 percent contraction this year, with the path to recovery to be slow.
“When this whole COVID-19 [situation] is resolved, we expect to see a U-shaped recovery in the domestic economy,” president director Lilis Setiadi said on June 17. "We are not going to see a sharp recovery like a V-shape." (Jakarta Post)
Travel restriction haunts near-collapse Indonesia travel agencies in Bali
Bali’s travel agencies association is calling for the island to be reopened to tourists as most of its members only have financial capability to weather the crisis until July. The plea comes following the government’s decision to maintain travel restrictions on the tourist-packed island.
The Association of Indonesian Tour and Travel Agencies (ASITA) of Bali expected the government to finish the new normal protocol stipulation by the end of the month and reopen the island to tourists by July to prevent travel companies from collapsing. (The Jakarta Post)
Indonesia signs controversial new Mining Law: Expert staff
President Joko “Jokowi” Widodo has signed the new Coal and Mineral Mining Law, which is meant to expand Indonesia’s mining industry but is marred with controversy over its socioenvironmental impacts and lack of procedural transparency.
According to a copy obtained by The Jakarta Post, Jokowi signed Law No. 3/2020 on June 10, a month after the House of Representatives (DPR) approved the bill on May 12. Presidential expert staff member Dini Shanti Purwono has confirmed the President’s signing.
“The Mining Law is hoped to balance out legal certainty, business certainty and corporate compliance,” Dini told the Post on Thursday.
In particular, companies were expected to comply with laws related to the environment and obligations to the state, she added.
As the country grapples with the COVID-19 crisis, lawmakers went ahead to approve the controversial revision of the 2009 Coal and Mineral Mining Law, despite outcry from civil society organizations.
Notable revisions include quadrupling the maximum size of traditional mining zones to 100 hectares and allowing mining activities in rivers and the sea. Meanwhile, the revision cuts red tape for miners by centralizing permit issuance at the Energy and Mineral Resources Ministry instead of keeping governors and regents in charge.
Activists have lambasted the DPR for not giving many stakeholders, including civil society groups, foreign investors and regents, time to scrutinize the bill.
Eight civil society organizations, including Greenpeace and the Indonesian Forum for the Environment (Walhi), have mobilized grassroots support for challenging the new Mining Law through a judicial review.
“Deliberations in the midst of the COVID-19 pandemic left no room for public participation and information,” Edo Rakhman of Walhi Indonesia said on May 12. “What the House did was like burglary in the middle of a fire.” (Jakarta Post)
Indonesia Makes Two Capital Assistance Schemes Available for Tourism and Creative Economy Industry
Two capital assistance schemes were available for small- and medium-sized businesses in the tourism and creative economy industry, providing loans to help the firms recover from the Covid-19 pandemic, an official from the Coordinating Ministry of Maritime Affairs, and Investment said.
The schemes include Government Incentive Assistance, or BIP, from the Tourism and Creative Economy Minister and a partnership program from state-owned Pertamina, allowing a small and medium enterprise (SME) to get up to Rp 200 million ($14,200) in the capital loan.
Suparman, assistant deputy for capital access for tourism and the creative economy at the ministry, said the government would prepare Rp 24 billion for this year's BIP, but would only focus on six areas.
"In 2020, the government would prepare Rp 24 billion for six sub-sectors from creative economy and tourism sectors, which are a game application developer, craft, fashion, culinary, film, and tourism, such as homestay and businesses in tourist village locations," Suparman said in a statement of Friday.
Businesses who are to join the selection process should choose a category between regular and affirmative, based on requirements and criteria that the company should meet.
Regular could receive assistance until up to Rp 200 million, while affirmative could receive up to Rp 100 million.
The program first started in 2017 with 34 recipients, 19 of them were businesses in the culinary sector and 15 from the digital application sector.
In 2018, the number increased to 52 recipients from culinary (14), digital application and game developer (12), fashion (13), and craft (13) sectors.
And 62 businesses received assistance from the BIP program in 2019.
For the Pertamina partnership program, Suparman said 62,000 SMEs had received the benefit, with a loan up to Rp 200 million per business available.
Besides capital loans, the program also offers training and mentoring for SMEs to further develop their business.
Suparman said firms need to put their best effort in meeting requirements for both programs.
"BIP and Pertamina aid programs would need all applicants to be very considerate in fulfilling all requirements, with help and assistance from the local government," Suparman said. (The Jakarta Globe)
The future of digital banking in Indonesia
The coronavirus outbreak has shaken entire economies, populations and communities around the world. With more people staying in and working from home, the industry is witnessing how the global health crisis has spurred banking customers to embrace digital services in coping with lockdown measures. Closer to home, banks across Southeast Asia are reporting an unprecedented surge in digital services and an increase in the registration of digital banking accounts in the last few months. In Indonesia, state-owned Bank Rakyat Indonesia saw a 10 percent month-on-month increase on its mobile banking channels alone. Similarly, in the fintech space, online lending is seeing a rise in demand as companies across the country are placing staff on unpaid leave, or dismissing them altogether. (The Jakarta Post)
Indonesia gives tax break to makers of PPE
Indonesia announced a tax break today for manufacturers of personal protective equipment (PPE) and household antiseptic products used during the Covid-19 outbreak.
Manufacturers will be able to offset 30% of their production costs between March and September this year against their taxable income, according to the new regulation, uploaded on the tax department's website.
The tax break applies to makers of surgical and N95 masks, gloves and antiseptic hand sanitizers, ventilators, reagents for diagnostic tests of Covid-19 and disinfectants. They include companies such as Unilever Indonesia, Pan Brothers, and Kimia Farma.
Indonesia reported 1,041 new cases of Covid-19 today, taking the total so far to 43,803, with 2,373 deaths. (The Edge Markets)
More Indonesians Say They Detest Corruption: Indonesia Census
This year's national census shows that Indonesians are becoming more intolerant of corruption.
The anti-corruption score in this year's National Population Census was 3.84 out of 5, close to the 2020 National Medium-Term Development Plan target of 4. Last year's score was 3.70.
The census interviewed over 10,000 households in Indonesia from March to May.
The survey analyzes perceptions and experiences of bribery, extortion and nepotism. Respondents were asked if they tolerate different forms of corruption, including petty corruption.
The experience score was higher (3.91) than the perception score (3.68). The combined total is considered a high anti-corruption score.
Around 83 percent of the respondents claimed they never paid a bribe to smooth out services from government institutions.
Only 8.8 percent claimed they had offered bribes in the past year, and 7.9 percent said they used "mediators" to obtain the services.
Around 9.6 percent of business owners said they offered bribes to obtain public services. Around 80 percent say they would only pay the standard fees.
However, petty corruption was still rampant, especially during elections, according to the census.
More respondents said they had accepted cash and facilities during elections – a jump from 20.8 percent in 2019 to 32.7 percent this year.
Around the same number of people still find it acceptable to bribe government officials to smooth out the process of obtaining a national ID card (KTP) or a driver's license – 31.6 percent.
"This means people are more permissive of petty corruption," the report stated.
The study also analyzes people's opinions of offering bribes to public or local figureheads when preparing an event or to neighborhood heads or district heads during religious holidays.
According to the report, people are more tolerant of offering bribes to public figures during religious holidays, with the number increasing by 5.6 percent this year from last year's 40.9 percent.
Corruption is a severe and persistent problem in Indonesia, putting the country in 85th place in the 2019 Corruption Perception Index within the category of "moderately corrupt." (Jakarta Globe)
Indonesia eyes ‘travel bubble’ for four countries in Asia Pacific
As neighbors begin talks on reopening borders, Indonesia is aiming to create “travel bubbles” with China, South Korea, Japan and Australia, despite COVID-19 infections nationwide showing no signs of slowing down.
Earlier this month, Singapore said it would announce a "fast lane" arrangement with China, while Thailand was in talks to create travel bubbles for tourism that would allow the quarantine-free flow of people between Bangkok and few cities in China, Japan, South Korea and Vietnam.
Foreign Ministry spokesperson Teuku Faizasyah said Indonesia was paying close attention to the trend, but officials were still discussing ways to have such a "travel corridor".
The term “travel bubble” or “travel corridor” refers to an agreement in which countries that are successfully containing the outbreak can open their borders to each other to allow free movement within the bubble.
“We are exploring what [foreign] countries are discussing over travel corridor arrangements, but in essence, we are now working on the principles the Indonesian government needs to have if we implement [a travel corridor],” Teuku said recently.
The Office of the Coordinating Maritime Affairs and Investment Minister has been discussing the issue with the Foreign Ministry, as well as the Tourism and Creative Economy Ministry, with an official saying that they had specifically looked to China, South Korea, Japan and Australia to boost Indonesia’s tourism recovery.
“The four countries were chosen because many tourists and foreign investors in Indonesia come from those countries,” the office’s undersecretary for tourism and creative economy, Odo Manuhutu, said on Friday.
Despite the plan, he said businesspeople would probably be the first and only ones to travel to and from those countries in the near future.
“Hopefully, tourists will gradually follow and visit [Indonesia] after the investors," he said. (The Jakarta Post)
Indonesia Posts More Surplus as Pandemic Curbs Raw Material, Capital Goods Imports
Indonesia's trade balance swung to a $2.09 billion surplus in May from a deficit of $345 million a month earlier as companies postponed imports of raw materials and capital goods amid restrictions to keep the Covid-19 pandemic under control.
The surplus was the second largest in the past two years.
Indonesia exported $10.53 billion worth of merchandise last month, down 29 percent from the same month a year ago, data from the Central Statistics Agency (BPS) showed on Monday.
Non-oil and gas exports, which account for a lion's share of shipments from the archipelago, declined 28 percent to $9.88 billion.
Imports fell 42 percent to $8.44 billion with non-oil and gas imports declining by 37 percent to $7.78 billion.
Imports of raw material shrank 43 percent to $6.11 billion last month since the same month a year ago.
Meanwhile, companies spent only $1.96 billion, or 16 percent less, on buying capital goods from abroad.
"The decline in imports of raw and auxiliary materials, as well as imports of capital goods, needs to be observed closely because it will have a major impact on the manufacturing and trade sector as well as on investment," BPS head Suhariyanto said in a press conference on Monday.
China remains Indonesia's largest non-oil and gas export destination, followed by the United States and Japan.
Overall, Indonesia's trade balance in the first five months this year still sits on a $4.31 billion surplus from trades with the United States, India and the Netherlands.
The country posts a deficit in its trade balance with China, Thailand and Australia. (Jakarta Post)
Indonesia wants to lure China supply chains
Indonesia plans to build one of its largest industrial parks on the north coast of Java island in a renewed drive to attract manufacturers relocating out of China as Southeast Asia’s biggest economy comes out of a coronavirus-induced lockdown.
Yet, despite its low wages and huge domestic market Indonesia must overcome decades-old hurdles including red tape, rigid labour laws, and poor infrastructure to be able to move up the global manufacturing value chain.
This time, in its quest to emulate rivals such as Vietnam, the government has shown serious intent in bringing about change and is aiming to pass an ambitious ‘omnibus’ bill later this year to address some of the pressing foreign investor concerns.
At the same time it is pushing ahead with plans for a 4,000- hectare (9,884-acre) industrial park, an area equivalent to more than 5,000 football fields, in Brebes, Central Java - mainly targeting supply chains relocating out of China.
“This is a pilot project for Indonesia on how we can attract global investors heading out of China,” said Ahmad Fauzie Nur, chief operating officer of PT Kawasan Industri Wijayakusuma, the state company due to operate the park. (The Jakarta Post)
Indonesia fears over virus cast shadow on plan to restart tourism
Fears over virus transmission have cast a shadow on the government’s plan to reopen tourist destinations across Indonesia, especially as the number of COVID-19 cases continues to climb despite the authorities’ health protocols for the so-called new normal.
The head of the Indonesian Tour and Travel Agencies Association (Asita) in Bali, I Ketut Ardana, said on June 2 that the tourist industry on the resort island was still vigilant, since local transmission of the coronavirus was still happening. The government should carefully decide on whether or not to reopen tourist destinations.
“If we take the wrong step, the impact can be severe for Bali,” he said. “That is why we must be really careful [in making the decision] and wait until the situation has improved.”
Bali has recorded 695 positive COVID-19 cases as of Friday afternoon, with five deaths and 448 recoveries. The figure is relatively small compared to more than 36,400 cases and 2,048 fatalities nationwide.
However, the Bali provincial administration has reported an increasing number of local coronavirus transmissions recently, particularly in the four regencies of Badung, Denpasar, Klungkung and Tabanan.
“If the virus transmission curve were flattening, we may be prepared for reopening. Right now, however, local transmission is still happening, and of course that is one of our considerations,” Ketut said, adding that visitors’ trust in Bali’s safety was key for a recovery in the industry.
Asita Bali has drafted health and hygiene protocols that will be applied by its members in the new normal.
President Joko “Jokowi” Widodo called on the Tourism and Creative Economy Ministry in late May to prepare “special strategies” to revive domestic tourism in regions safe from COVID-19 for the transition to the new normal.
However, he asked the ministry not to rush to open tourist areas, urging it to gradually identify areas that were ready based on COVID-19 basic reproduction rates. (The Jakarta Post)
Indonesia Bound for U-Shaped Recovery: Report
A second wave of Covid-19 would derail Indonesia's path to recovering its economy by next year, with unemployment and income losses holding back growth, a study showed.
The government has been keen on reopening shopping malls, offices and manufacturing plants gradually this month to save the economy, ignoring the fact that the number of Covid-19 cases in the country has kept climbing.
"[A]s reopenings gather pace, the focus is now on how big any second wave is likely to be and the implications theses increases may have on the domestic demand
recovery," global investment bank Morgan Stanley wrote in a note to clients released on Friday.
The multilateral organization estimated Indonesia's gross domestic product (GDP) would contract by 2.8 percent this year, or by 3.9 percent if a global second wave of Covid-19 infections occurs later in 2020.
In 2021, Indonesia's economy would grow by only 5.2 percent or by 2.6 percent, depending on the second wave scenario.
The projection would result in what economists call a U-shaped recovery – when an economy fails to return to its original trajectory after a shock.
Indonesia trade balance may return to surplus in May
Indonesia's trade balance likely turned positive in May, with falls in exports and imports probably deepening as the coronavirus pandemic depressed global demand, a Reuters poll showed on Friday.
The median forecast from 14 analysts surveyed by Reuters was for a $420 million surplus in May, compared with April's $350 million deficit. But estimates ranged widely from a deficit of $620 million to a surplus of $1.5 billion.
May exports for Southeast Asia's largest economy were seen tumbling 17.98% from a year earlier - the sharpest fall since 2016 - due to reduced trade flows even as some economies of its trading partners started to emerge from lockdowns.
Imports were expected to fall 24.55% on year, the most since 2015, due to weak domestic demand.
Aldian Taloputra, Standard Chartered economist in Jakarta, said the dramatic fall in both exports and imports also reflected base effects, as the Eid al-Fitr holidays fell in different months this year compared with 2019. (The Star)
Indonesia Labor Union Tells Gov't to Hire More Local Workers for Bullet Train Project
The State-Owned Enterprises Ministry has devised a plan to extend the Jakarta-Bandung high-speed train project to Surabaya in East Java to improve connectivity on the island of Java – the most densely populated region in Indonesia – and to create new jobs for local workers during the coronavirus crisis.
The government expects the extension of the project would also encourage more economic activities, tourism and investment in regions passed by the rail network.
The chairman of the National Workers Union, Puji Santoso, said the national strategic project (PSN) would create new jobs and help the government tackle rising unemployment caused by the Covid-19 pandemic.
"A large number of workers will be needed for the project's construction. Digital technology will take over after that. If the government could reduce unemployment by extending this project, that would be a good step," Puji said on Thursday.
Puji hoped the government would prioritize hiring local workers for the project since the construction phase.
"Hiring foreign workers would be unfair to many Indonesians who desperately need jobs," Puji said. (Jakarta Globe)
Indonesia's unicorns, start-ups join forces to produce coronavirus test kits locally
Indonesia's unicorns and start-ups have joined forces to produce test kits locally, a move that may help President Joko Widodoachieve his target of doubling testing capacity for Covid-19 as cities across the world's fourth most populous country gradually lift restrictions.
A unicorn refers to any tech start-up that reaches US$1 billion ($1.39 billion) in market value.
Jakarta-based East Venture, which has a portfolio of start-up companies, recently raised 10 billion rupiah (about $1 million) to develop prototypes of locally-made polymerase chain reaction (RT-PCR) test kits.
Unicorns Tokopedia, an e-commerce platform, and Traveloka, an airline ticketing and hotel booking company, were among several companies and individuals contributing monies to the Indonesia Pasti Bisa (Indonesia Can Do It) initiative, which comes under the auspices of Indonesia's Agency for the Assessment and Application of Technology (BPPT).
Jakarta-based genomics technology start-up Nusantics was appointed by the government to design the test kit prototypes, which it did for free. (Straits Times)
Indonesia's Bank Mandiri books 9% growth in Q1 profit, strives to strengthen digital channels
State-owned Bank Mandiri has secured net profit growth in the first quarter as it strives to strengthen its digital channels amid the outbreak.
The bank saw its net profit grow 9.44 percent year-on-year (yoy) to Rp 7.92 trillion (US$5.65 million) in the first three months, with a growth rate that was much higher than its peers. State-owned Bank Rakyat Indonesia (BRI) saw its net profit contract 0.3 percent in the first quarter to Rp 8.17 trillion, while Bank Tabungan Negara (BTN) recorded a 36.79 percent contraction, while Bank Negara Indonesia (BNI) booked 4.3 percent growth.
The notable growth in Bank Mandiri’s net profit was supported by nearly 24 percent growth in its fee-based income to Rp 7.74 trillion and 9.05 percent increase in its net interest income to Rp 16.16 trillion.
“We are committed to maintaining business growth that is sustainable and consistent in giving better added value to our shareholders,” Bank Mandiri president director Royke Tumilaar said in a written statement published on Monday. (The Jakarta Post)
Foreign Investors' Return Boosts Indonesia's Exchange Reserves
Indonesia's foreign exchange reserves swelled to $130.5 billion in May, up from $127.9 billion in April, as the government took out more loans from foreign creditors, the country's central bank said in a statement on Monday.
Foreign investors also returned in droves in May to buy government bonds, bringing back critical foreign exchange supply for domestic importers and companies who still have to pay back overseas debts during the coronavirus pandemic.
"Our foreign exchange reserves are equivalent to 8.3 months of imports or 8 months of imports plus payment of the government's foreign debts and are above the international adequacy standard of around three months of imports," Onny Widjanarko, Bank Indonesia's (BI) executive director of communication, said in the statement. (Jakarta Globe)
Angkasa Pura launches air freight service to connect Indonesia islands
State-owned operator Angkasa Pura I, through its logistics subsidiary Angkasa Pura Logistics (APL), has launched an air freight service amid the COVID-19 pandemic, which has disrupted the cargo business for commercial airlines.
APL, which officiated the launch with an inaugural flight on Thursday, boasts logistics services that reach areas that are difficult for commercial planes to access due to short runways, according to APL president director Danny Thaharsyah.
“We aim to harness Indonesian air freight business potential, which can grow exponentially. We are also striving to reach regions that are still untouched by other cargo airliners,” Danny said during a press briefing on Thursday.
For its operation, the company will provide air freight services to nine cities across Indonesia, including Banjarmasin in South Kalimantan, Denpasar in Bali, Makassar in South Sulawesi, Ambon in Maluku and Batam in Riau Islands. It will also serve an international freight service to neighboring Singapore. (The Jakarta Post)
Indonesia's Siloam Hospitals Builds On Strong 2019 Performance
Siloam International Hospitals, the largest listed hospital operator in Indonesia, has taken confidence from a positive financial performance last year to build on the quality of its health services and boost profitability.
Siloam's underlying net profit – which excludes one-off accounting events such as non-cash asset value adjustment – rose 251 percent to Rp 92 billion ($6.5 million) last year. Its revenue also rose 18 percent to Rp 7.02 trillion from Rp 5.96 trillion a year earlier.
The company's earnings before interest, taxes, depreciation and amortization (Ebitda) also rose 26 percent.
Siloam reported a 17 percent growth in the number of hospital patients and its bed occupancy ratio also rose to 64 percent from 55 percent in 2018.
Its revenue from the inpatient segment reached Rp 4.09 trillion, equivalent to 58 percent of the total revenue, and was up 16 percent from 2018's Rp 3.52 trillion.
The outpatient segment contributed the remainder of the revenue, growing 20 percent to Rp 2.93 trillion from Rp 2.44 trillion in 2018.
Siloam Hospitals Vice President Director Caroline Riady said the management's decision to implement an accounting review that resulted in the adjustment of account receivables and termination of several new projects has been vindicated by an overwhelmingly positive reaction from investors. (Jakarta Globe)
Indonesia Gov't Prepares for Possible Food Crisis Post-Pandemic
The government is devising plans to ensure food security in the country after the coronavirus pandemic has passed, as the Food and Agriculture Organization, or FAO, issued a warning of a looming food crisis in the near future, Agriculture Minister Syahrul Yasin Limpo said.
"The FAO said after the pandemic, there's a possibility of a food crisis due to a long dry season," Syahrul said in an online press conference on Thursday.
However, he said, Indonesia has enough food supply and that prices had remained stable during Ramadan and Idul Fitri.
"We got through Ramadan and Idul Fitri unscathed. Our food stock is more than adequate," Syahrul said.
Syahrul said the ministry had prepared several plans to face the upcoming dry season, including accelerating simultaneous planting, developing agriculture production facilities and financing agriculture businesses and small-scale farmers.
"We'll provide [the farmers with] seeds, fertilizers and medicines to ensure they can carry out their activities," he said. (Jakarta Globe)
Indonesia to develop 89 new 'strategic' projects in 2020-2024
The government has vowed to continue the development of national strategic projects during the COVID-19 health crisis with the addition of 89 new projects of an estimated Rp 1.422 quadrillion in investment value.
Coordinating Economic Affairs Minister Airlangga Hartarto said on May 29 that the new projects were an addition to the existing 223 national strategic projects., and were expected to employ around 4 million workers every year from 2020 to 2024.
“During the projects' development over the next five years, [the projects] are hoped to involve a total of 19 million [workers],” Airlangga told a virtual press briefing on Friday, following a Cabinet meeting.
Airlangga said that the 89 new projects comprised 15 road and bridge projects, 13 dams and irrigation systems, 13 border infrastructure projects and 12 energy projects.
The remaining projects comprised six railway projects, six clean water projects, five airports, five seaports, five industrial zones, three technology projects, three smelters, one seawall, one waste management project and one land procurement project in Central Kalimantan.
Indonesia Airline Garuda lays off 180 contract pilots
National flag carrier Garuda Indonesia has laid off 180 contract pilots, as well as hundreds of workers as the company continues to struggle financially amid a slump in demand for air travel, its workers association has said.
The pilots, including senior and outsourced pilots working on a contract basis, have had their contracts terminated as the airline cuts back on flights, Garuda Pilot Association (APG) chairperson Muzaeni told The Jakarta Post on Tuesday.
“There are a total of 180 pilots affected, of which 150 are contract workers sourced internally, mostly retired seniors aged 60 to 65 years old,” Muzaeni said in a phone interview. “The other 30 are externally sourced contract workers.”
The move followed a previous announcement from the airline that it had furloughed about 800 workers for three months starting on May 14 in a bid to maintain the company’s finances before resuming normal operations. (Jakarta Post)
Indonesia makes food security key investment destination
Food security is one of the national development priorities for Indonesia, never more so than at present with recent import restrictions introduced to control the spread of Covid-19. Such restrictions have caused delays in key staples such as onion and garlic, resulting in shortages and spikes in prices.
Yet, rising demands from an ever-increasing population – reaching 270 million in 2019 – combined with climate change pose obstacles for future food security, too.
To meet these challenges and to manage the fluctuating demand for agricultural commodities, local agri-businesses are constantly looking to further improve operations and increase food production. (Jakarta Globe)
Indonesia President Jokowi Wants Jakarta-Bandung Fast Train to Extend to Surabaya
President Joko "Jokowi" Widodo has approved a plan to extend the Jakarta-Bandung high-speed rail to Surabaya, East Java, with a move that would urge China and Japan, former rivals in the original project, to collaborate for developing Indonesia's high-speed railway network.
Transportation Minister Budi Karya Sumadi first revealed the plan to the public in February. Coordinating Minister for the Economy Airlangga Hartarto on Friday said the cost and benefit were the main reason behind Jokowi's decision.
"According to the President's direction, to make [high-speed train] more economical, the project should extend to Surabaya, not only stop in Bandung," Airlangga said.
"Also, it was proposed to include a consortium from Japan to the existing consortium," Airlangga said. He was referring to the China and Indonesia consortium, Kereta Cepat Indonesia China (KCIC), which currently develops the Jakarta-Bandung high-speed rail project. (Jakarta Globe)
Indonesia sets export levy on palm oil to gather funds for biodiesel
Indonesia will charge a blanket export levy of $55 per tonne on crude palm oil (CPO) shipments from June 1, a Finance Ministry regulation showed on Saturday, as the government seeks to raise funds for a domestic biodiesel programme. Indonesia, the world's largest palm oil supplier, also set new tariffs for other refined palm oil products, ranging from $25 to $45 per tonne. Previously, export levies were only charged when the government reference price for CPO exports reached $570 per tonne, increasing to a maximum of $50 per tonne when the price exceeded $619. (agriculture)
Indonesia's capital Jakarta bracing for people returning from holiday
Indonesia’s capital Jakarta is anticipating one million vehicles will enter the city as people return from Eid al-Fitr holidays. Traffic, including motorcycles, is projected to peak from Saturday to Monday, according to a Cabinet Secretariat statement. While the figure is lower compared to the 2.8 million vehicles recorded last year, the flow of so many travelers is raising concern as the nation’s coronavirus cases grow. (Yahoo Finance)
Indonesia's Medan reopens shopping malls
At least 14 shopping malls in the North Sumatra capital of Medan partially reopened on Friday amid the ongoing coronavirus outbreak.
The provincial shopping mall operators' association claimed Covid-19 health protocols were strictly imposed on visitors, whose number was also limited.
"The procedures on reopening the malls followed the government circular on Covid-19. We limited the number of visitors in accordance with the available spaces to prevent overcrowding," the association's deputy chairperson Liany Simatupang said in Medan.
"All visitors and staff members must [wash hands] with antiseptic, wear face masks at all times inside the mall and keep a safe distance from each other," she said.
Mall tenants allowed to reopen were limited to those selling basic commodities and pharmaceutical products, she added. (Jakarta Globe)
Indonesia's Lion Air Group grounding all planes until end of May
Lion Air Group has temporarily suspended all domestic flights until May 31, citing the fact that many passengers still turn up at airports without proper travel documents and have to be turned back.
After the Idul Fitri holiday, the Jakarta provincial government says it will turn away visitors and returning residents trying to enter the capital city without an entry permit (SIKM).
The rule applies to all modes of transportation.
The entry permit must include a clearance letter from the neighborhood chief (RT or RW), a health certificate, travel documents, a passport photo and an Indonesian ID card (KTP).
Also, only workers in essential sectors – health, food, energy, communication, finance, logistics, construction, hospitality and strategic industries – are allowed to come into the city. (Jakarta Globe)
Concerns about reopening of malls and shops in Indonesia
Concerns are mounting over the government’s approach to reopening public places while urging citizens to embrace the “new normal” as numbers of COVID-19 cases and deaths continue to rise across the country.
Lawmakers have questioned the government's decision to ease large-scale social restrictions (PSBB), saying COVID-19 cases and deaths continue to increase across many provinces.
“Streets, markets, malls, workplaces will be crowded again and the virus could continue to spread," a member of House of Representatives Commission IX overseeing health Saleh Daulay of the National Mandate Party (PAN), said on Tuesday.
Saleh referred to measures announced by President Joko “Jokowi” Widodo on Tuesday and Health Minister Terawan Agus Putranto in a decree on health protocols in the new normal over the weekend. (Jakarta Post)
Indonesia set out guidelines for businesses and companies to reopen
The Health Ministry has issued a set of guidelines for businesses and companies seeking to reopen under the large-scale social restriction, or PSBB.
Until today, four provinces and 28 municipalities and districts across Indonesia still have the restriction in place.
Jakarta, the first region in Indonesia to impose the rule, has already extended the PSBB three times and was hoping to end the last one on June 4.
Under the PSBB, shops and offices are to close except those providing essential services such as healthcare, logistics, food and beverages, utilities and emergency responses. (Jakarta Globe)
Indonesia focuses on domestic innovations to deal with crisis
Indonesia is striving to tackle the COVID-19 outbreak with domestically produced innovations, but researchers say the government may face roadblocks in the mass production of such products because of the absence of pro-innovation policies.
The government’s research consortium on Wednesday launched nine products, including ventilators, a type of polymerase chain reaction (PCR) test and rapid antibody testing kits, in an effort to overcome the shortage of critical medical equipment in Indonesia’s fight against COVID-19.
The nine inventions were the result of a consortium formed on March 26 by the Research and Technology Ministry and the National Research and Innovation Agency (BRIN) to develop innovations to fight the outbreak. The program involves universities, government research agencies and local industries – both private and state-owned – including defense firms such as state-owned arms manufacturer PT Pindad. (Jakarta Post)
Indonesia might see Coca Cola recycling plant for plastic
Soft drinks manufacturer Coca Cola Amatil Indonesia (Amatil) is looking into developing a plastic bottle recycling facility in one of the world’s top plastic polluting countries.
The company said on Friday it had signed a deal with plastic packaging maker Dynapack Asia to conduct a feasibility study on developing the facility. The soft drinks maker also said it aimed to cut consumption of new plastic resin by up to 25,000 tons a year by 2022 by using recycled plastic.
The statement did not mention Amatil’s total annual new plastic resin consumption. However, a 2019 report shows that the Coca-Cola Company produced 3 million tons of plastic packaging in 2017, the highest among 31 companies listed in the report. (Jakarta Post)
Indonesia's Greater Jakarta output down with 15.2%
The damage to economic income and output stemming from the coronavirus pandemic in the capital Jakarta has mostly been caused by a sudden halt to activities in the micro, small and medium enterprise sector, or MSME.
Bank Mandiri economist Andry Asmoro estimated the output loss in the Greater Jakarta area could reach up to 15.2% of its gross regional domestic product.
"We've done a simulation assuming three months of very little activities in the MSME sector. In Bogor, Depok, Tangerang and Bekasi, the output loss could be up to 15.2%. In Jakarta, the number is likely to be around 3.41%," Andry said on Wednesday.
In terms of income, Andry said Jakarta could lose up to 1.09% of its GDP, while its satellite cities could lose up to 4.75%. (Jakarta Globe)
Indonesia's Indofood Still Books Profit in Q1
Indofood Sukses Makmur, the world's largest maker of instant noodles, reported a $94 million net income in this year's first quarter, up 4 percent from the same period last year, giving the company solid footing to survive the coronavirus crisis for the rest of the year.
Indofood's net income rose to Rp 1.4 trillion ($94 million) in the first quarter from Rp 1.35 trillion in the same period last year.
From January to March, sales were up 1 percent to Rp 19.3 trillion from Rp 19.2 trillion last year.
The company also managed to increase its profit margin to 7.3 percent from 7 percent.
Anthoni Salim, Indofood's president director and chief executive, said the company showed notable operational improvement in the period.
Indofood's operating profit rose 33 percent to Rp 3.43 trillion from Rp 2.58 trillion last year and its operating profit margins increased to 17.8 percent from 13.4 percent.
"Amid today's challenging global conditions, Indofood managed to maintain good performance in the first quarter of 2020. In the future, we will remain vigilant and continue to improve our competitiveness," Anthoni said in a statement on Friday.
Mimi Halimin, an equity analyst at Mirae Asset Sekuritas, said he expected Indofood to continue growing amid an economy crippled by Covid-19 this year.
"We expect Indofood CBP to contribute 76 percent of Indofood's total financial performance this year," Mimi said, referring to the company's noodle, snacks and beverage maker subsidiary.
Growing sales of Indofood's premium instant noodle varieties contributed greatly to the growth of the company's financial performance.
Premium instant noodles offer a greater profit margin compared to the regular varieties.
Meanwhile, declining palm oil prices might eat into the company's profit and cause its palm oil division to struggle this year, Mimi said.
As a consumer goods company, Indofood's shares are considered as a "defensive" stock that investors prefer during economic slumps or recessions.
Mirae Asset Sekurtas has maintained its buying recommendation for Indofood shares with a target price of Rp 9,500 (65 cents) per share – 48 percent higher than its latest closing price of Rp 6,425. (jakartaglobe)
Indonesia's private sector criticizes lack of government support
Indonesia's powerful business lobby, which includes some of the country's largest employers, has criticized the government's $44 billion Covid-19 stimulus package for packing too much emphasis on state-controlled companies and small-medium enterprises and leaving big corporations virtually alone to ward off the economic impact of the pandemic.
Under its so-called National Economic Recovery program, the government will spend Rp 641 trillion ($44 billion) on healthcare, social safety net and business incentives during the pandemic.
Gita Wirjawan, the deputy chairman of the Indonesian Chamber of Commerce and Industry's (Kadin) advisory council, pointed out almost Rp 400 trillion from the stimulus package would go to finance debt restructuring for state-owned enterprises.
Meanwhile, only Rp 34 trillion has been set aside for SMEs and corporations to restructure their bank debts. (Jakarta Globe)
Indonesia attractive to venture capital investors
Indonesia and Singapore currently dominate the venture capital (VC) fundraising in Southeast Asia, despite a slower pace of capital raising in the first quarter this year.
Indonesia raised US$161 million in the first quarter while Singapore leads with $865 million over the same period, according to a recent report by Deal Street Asia. No closes were recorded by VC funds in Cambodia, Malaysia, Thailand or Vietnam.
Deal Street Asia ASEAN market research head Andi Haswidi in a statement on Tuesday said that the first-quarter fundraising performance did not reflect the true impact of the COVID-19 pandemic. (Jakarta Post)
Indonesian government rolls out US$43 billion stimulus plan
The government is rolling out a Rp 641.17 trillion (US$43 billion) economic recovery stimulus, bigger than previous allocations, to soften the impact of COVID-19 on micro, small and medium enterprises (MSMEs), as well as state-owned enterprises (SOEs).
Finance Minister Sri Mulyani Indrawati said the “national economic recovery” program would include a strengthened social safety net, tax incentives, capital injections into SOEs and interest rate subsidies for MSMEs, among other measures:
India lockdown hurting Indonesian coal miners
Indonesian coal miners are struggling with slow demand this year as businesses in India, one of the country’s major coal markets, hit the brakes due to a prolonged lockdown to contain the COVID-19 outbreak, a data firm has said.
The South Asian country’s coal imports, a commodity mostly used for power generation, is projected to decrease by 19.1 percent year-on-year (yoy) to 149 million tons, according to IHS Markit.
As India’s demand slows, IHS Markit projects a 10 percent yoy decline in Indonesian coal exports to 406 million tons this year, from last year’s figure of 451 million tons.
IHS Markit coal, metals and mining senior director James Stevenson said India’s lower import projection was a result of slumping business and industrial activity during the country’s prolonged lockdown. (Jakarta Post)
Indonesia attracts US Pharmaceutical firm relocating from China
Indonesia is preparing a 4,000-hectare industrial complex in Brebes, Central Java, for a US pharmaceutical company relocating from China, after a discussion last month between President Joko "Jokowi" Widodo and US President Donald Trump. Sanny Iskandar, the chairman of the Industrial Estates Association (JKI), confirmed the news to Investor Daily at the weekend, saying that state-controlled Kawasan Industri Wijayakusuma industrial estate in Brebes would soon welcome the as-yet-unnamed company. "They have not decided how much they would invest in the new factory," Sanny said. The State-Owned Enterprises Ministry owns 51.09% of Kawasan Industri Wijayakusuma. Central Java owns 40.19% and the Cilacap district government owns 8.52%. (Jakarta Globe)
Indonesia's cybersecurity systems need improvement
Communication and Information Minister Johnny G. Plate has urged digital companies to improve their cybersecurity systems following recent reports of data breaches on Indonesia’s largest e-commerce platforms. The minister said on Friday that Indonesia’s digital economy was “under attack” and that companies needed to routinely increase their investments into cybersecurity. “There were large scale attacks on our digital industry recently. I’m asking all companies to maintain their security systems to protect their applications and overall business,” he said during online digital talent event Grab Ventures Velocity, held by ride-hailing giant Grab. Indonesian e-commerce unicorn Tokopedia had its internal database breached by an unidentified party in March, resulting in a massive data leak of the personal information of more than 15 million users. (Jakarta Post)
Indonesia's car industry in trouble
Indonesia's April car sales plunged 90.6% from a year earlier due to measures to contain the spread of the novel coronavirus, the country's largest auto distributor Astra International said on Friday, citing industry association data. A total of 7,871 cars were sold in April, down from 84,056 units sold in the same month last year. The drop accelerated from 15% in March, the data showed. Jongkie Sugiarto, an executive with industry association Gaikindo, said the data represented wholesale sales from manufacturers to dealers. Dealers still managed to sell some 24,000 vehicles to consumers in April, despite large-scale social restrictions imposed in some of Indonesia's biggest cities, he said, without providing a comparison. (carandbike.com)
State-owned airport operator Angkasa Pura II has issued a new policy to prevent more passenger pile-ups at Soekarno-Hatta International Airport after hundreds ignored physical distancing guidelines to board their planes on Thursday.
The new policy was in place by Friday morning in Terminal 2 and Terminal 3.
Recently, the government decided to exempt business, emergency and repatriation flights from a travel ban issued to restrict the spread of Covid-19. Passengers were supposed to follow strict health protocols and bring travel documents which include a "free from Covid-19" certificate.
Febri Simatupang, Angkasa Pura II's senior manager, said staff at the airport had done their best to try to manage the crowd on Thursday morning. But too many passengers were arriving at Gate 4 in Terminal 2 at the same time, which made it impossible for them to impose physical distancing rules.
Indonesia’s trade balance swung back to a trade deficit of US$350 million in April on the back of falling commodity prices and plummeting global demand amid the COVID-19 pandemic, Statistics Indonesia (BPS) has announced.
The economy posted $12.19 billion worth of exports in April, a decrease of 7.02 percent year-on-year (yoy) and the sharpest fall in eight months, as oil and gas exports plummeted.
Meanwhile, total imports fell 18.58 percent to $12.54 billion last month, the biggest fall since October 2015, with Indonesians buying less of oil and gas as a result of the pandemic.
“There are two main factors: commodity prices fell significantly last month while the coronavirus pandemic upended global demand,” BPS head Suhariyanto told reporters on Friday during a streamed news conference.
Commodity products are Indonesia’s top exports. (Jakarta Post)
Companies should prevent employees over the age of 45 from coming back to work to prevent more deaths from Covid-19. The advice came from National Covid-19 Task Force Head Lt. Gen. Doni Monardo in an interview with Beritasatu late on Wednesday as some regional governments started to reopen businesses despite large-scale social restrictions.
Data from the Task Force show around 40 percent of Covid-19 patients in the 46–59 age group died from the disease.
The mortality rate among patients aged 60 years or above shot up to 80 percent.
Severe cases of Covid-19 also involved patients with serious underlying illnesses such as hypertension, diabetes, heart disease, disease of the lung, asthma, kidney problems and cancer.
The capital Jakarta, which began imposing the large-scale social restriction (PSBB) early last month, still allows 11 sectors – healthcare, energy, food and beverages, communication, security, strategic industries, utilities, finance, logistics, construction and basic supplies – to remain open. (Jakarta Globe)
Indonesian borrowers are selling a record amount of dollar bonds, as the country’s strong fiscal track record in recent years fuels optimism on its ability to weather the COVID-19 crisis.
Including the sovereign, note sales in the US currency from Indonesia this year total more than $15 billion, a year-to-date record and almost three-times the tally for the same period in 2019. In one of the most recent offerings, state-owned miner PT Indonesia Asahan Aluminium sold $2.5 billion of notes on Monday, with demand exceeding the issuance size by six times.
Indonesia has run a small budget deficit over many years and foreign currency reserves were at a near record level at the start of 2020. That gives it some cushion amid the massive challenges all countries, and emerging markets in particular, face in the pandemic. The nation’s issuers have also benefited from a rally in credit markets in recent weeks, after stimulus from central banks around the world boosted sentiment, particularly for safer issuers. (Jakarta Post)
We earlier reported on a Vietnamese business man introducing rice ATM's accross the country to serve the poorest families. The idea has now also been introduced in Indonesia. The authorities have set up 10 rice ATMs in and around Jakarta and serves the most affected. Millions have lost their job due to the coronavirus outbreak. Each day about 1.5 tons of rice is produced for about 1000 residents.
Indonesia is finalizing a US$1 billion (S$1.41 billion) financial bailout plan for its flag carrier to help it stave off a debt default after the coronavirus crisis forced the airline to ground most of its planes. The rescue plan includes a proposal to restructure PT Garuda Indonesia's US$500 million sukuk due next month and arrange new bridge loans of as much as US$500 million to meet working capital requirements for three to six months, Deputy State-Owned Enterprises Minister Kartika Wirjoatmodjo said. Garuda will table the sukuk proposal to investors on May 18 that will include an option to extend the maturity of the securities by three years or a staggered repayment, Wirjoatmodjo said. Last month, the carrier asked bondholders to begin talks with its financial adviser, citing an "extremely challenging environment for airlines". (Straits Times)
Over 50 zoos in Indonesia are in dire need of donations as Covid-19 hit reduces the zoo's income, putting its animals, including the endangered species at risk of dying. "We are in a challenging time, and most zoos are unable to provide more food for the animals. We have helped, but it is not enough," H. Rahmat Shah, PKBSI chairman, said. The Indonesian Zoo Association (PKBSI) is a nonprofit organization handling 57 zoos from Aceh to Papua. The zoos are the home for 4,912 animal species, summing up to 68,933 animals, including endemic and endangered animals, mammals, carnivores, reptiles, poultry, sea life, and others. With the Covid-19 pandemic, zoos operational has been closed since mid-March to stop the virus spread. That disrupted zoos' income to buy food, medicines, vitamins, staff salary, and other operational costs. The current stock in almost all the zoos could only last until mid-May. PKBSI started fundraising on May 1 to support all zoos in Indonesia, targeting at least Rp 60 billion ($4 million) donations, which could only last for two months. (Jakarta Globe)
Indonesia is likely to delay plans to raise bio-content in palm oil-based biodiesel to 40%, and keep going with an already ambitious 30% content, a senior official said, amid speculation that low crude prices could force a government re-think. The biodiesel programme is a key part of the government's strategy to soak up excess supplies of palm oil and curb expensive fuel imports, one of the main contributors to the country's current account deficit problem. Some traders had questioned whether it was still viable for the government to continue its programme following the historic drop in crude oil prices earlier this year. (The Star)
The COVID-19 pandemic has hindered the government’s efforts to attract new investments into the country, as evidenced by the new quarterly figures, according to Investment Coordinating Board (BKPM) head Bahlil Lahadalia. Foreign direct investment (FDI), which accounts for less than half of total investment, fell by 9.2 percent to Rp 98 trillion (US$6.4 billion) in the January to March period from the same period last year, according to the agency’s data. Singapore, Indonesia’s largest source of FDI with US$2.7 million in investment in the first quarter, recently recorded a surge in the number of infections, with the country’s number of confirmed cases rising to more than 19,400. The recent surge prompted the city-state to impose a partial lockdown. Indonesia’s second-largest source of foreign investment, China, is slowly reopening its economy but is not yet functioning at normal capacity. (The Star)
Below is a timeline of Indonesia's plans to reopen its economy. Dates can be changed at any time by the government.
The coronavirus outbreak has forced Indonesia to delay its simultaneous regional elections slated for Sept. 23 that would reach more than 100 million of voters. President Joko Widodo has signed a Government Regulation in Lieu of Law on Monday that regulates the postponement of this year’s elections from September to December or even longer depending on the situation of the COVID-19 pandemic in the world’s fourth most populous nation, the official website of the State Secretariat said late Tuesday. The elections have planned to be held simultaneously in 270 regions across the archipelago nation to elect 9 governors, 37 mayors and 224 district chiefs, with the number of eligible voters reached at least 105 million. (TIME)
Indonesia’s could face a recession in 2020 after the economy grew in the first quarter at its slowest pace for almost two decades, and economists warned Tuesday the coronavirus crisis would likely deal an even greater blow in the next three months. Southeast Asia’s biggest economy grew 2.97% in January-February, the worst rate since 2001 and well short of the 5.07% in the same period last year. It also missed forecasts of 4% expansion, while marking a contraction of 2.41% from the previous quarter. Officials have cut their official growth forecast to 2.3% for this year, from a previous estimate of 5.3%, and said it could even suffer a contraction under a worst-case scenario.
Indonesia reported the fewest foreign tourist arrivals since February 2009 as the coronavirus pandemic led to country lockdowns and a slump in travel demand. There were 470,900 overseas visitors in March, down 64% from the same month last year, with tourist numbers from both China and Hong Kong falling at least 96%, Indonesia’s statistics agency said Monday. Domestic passenger traffic dropped 24%. The government has since banned air travel in the country until June 1. (Bloomberg)
The Transportation Ministry has temporarily restricted passenger travel during the period of April 24 until May 31 in an effort to prevent an Idul Fitri mudik (exodus) as the country struggles to contain the spread of COVID-19 across the archipelago. The mudik ban, which is based on Transportation Ministry Regulation No. 25/2020 signed by acting minister Luhut Pandjaitan on April 23, applies to all types of mass transportation as well as to private vehicles and is seen as crucial to prevent the coronavirus from spreading from the epicenter of Jakarta and West Java to other regions of the country.
- Mudik ban coverage area
The ban applies to the use of private cars and motorcycles, public busses, trains, ships, ferries and chartered and scheduled flights entering and leaving areas that have imposed large-scale social restrictions (PSBB), red zone areas and agglomeration areas. An example of this is Greater Jakarta, which consists of Jakarta and its satellite cities Tangerang in Banten as well as Bogor, Depok and Bekasi in West Java. Greater Bandung, which consists of Bandung city, Bandung regency and Cimahi city in West Java, is also categorized as an agglomeration area. As of April 27, as many as two provinces and 22 regencies/cities have implemented the PSBB, which include Greater Jakarta, Greater Bandung, Tegal in Central Java, Surabaya, Sidoarjo and Gresik in East Java and Makassar in South Sulawesi.
- International travel
The mudik ban applies to domestic travel only and does not affect international travel. Civil Aviation Director General Novie Riyanto said on April 24 that people were still allowed to travel overseas since the regulation on the mudik was only applicable to domestic passenger travel. Novie also said that all Indonesians overseas who wanted to return to Indonesia were allowed to fly in.
- Ticket refunds
The regulation requires all airlines and transportation operators and companies to refund in full any tickets issued for travel within the period of the ban. The refund can be in form of cash, credit points, ticket vouchers or other forms agreed by the companies and passengers. The passengers also have the option to reschedule or reroute their cancelled tickets free of charge.
- Exemptions from the ban
In land transportation, operational vehicles and trains for logistics, goods, medicines and medical equipment transportation as well as firefighter vehicles, ambulance and hearses are still allowed to move freely.
High-ranking officials, the COVID-19 task force officers, government operational officers, the Indonesian Army, the National Police as well as toll road officials may still travel on duty.
Land and railway transportation operating within an agglomeration area, such as Greater Jakarta, can continue operations with strict implementation of physical distancing rules.
In air transportation, flights for high-ranking officials, state guests and representatives of international organizations and foreign consulates and embassies in Indonesia as well as repatriation, law enforcement and emergency services flights are exempted from the ban.
Airport operations, however, remain normal to serve cargo flights and a few passenger flights that enter and leave areas outside PSBB, red zones and agglomeration areas.
At sea, the regulation exempts passenger ships for repatriation, logistics, state and medical services as well as regular ships that travel within agglomeration areas.
- Law enforcement
To oversee the implementation of the ban, the Transportation Ministry along with the National Police Traffic Corps have established checkpoints at certain locations, such as toll gates, passenger bus terminals, seaports and airports, to prevent any illegal travel.
The officials will instruct car drivers trying to leave a PSBB, red zone or agglomeration area during the period of April 24 to May 7 to return to their point of departure. Starting on May 8, drivers of such cars will get additional sanctions “in accordance with the prevailing law”.
Ships operators and airlines that violate the ban will be charged with sanctions that range from written reprimand to a revocation of licenses.
The West Java provincial government is finalizing a plan to launch a mobile healthcare center for children and pregnant women during large-scale social restrictions that are now in place in several cities in the province. The mobile service has been developed from the integrated healthcare and family planning service, known by its acronym Posyandu, that provides health services – including immunization and basic medical check-ups – and education for mothers and their children. Posyandu shelters are available at almost every subdistrict or urban hamlet (RW) in Indonesia. West Java's Women's Empowerment Agency (PKK) Head Atalia Ridwan Kamil – the wife of Governor Ridwan Kamil – said the restrictions (PSBB) should not stop people from getting services from Posyandu. The Posyandu Keliling (Mobile Posyandu) will send health workers to check on children and their mothers from house to house. "Posyandu's job is to monitor children and pregnant women in a specific area. We're now close to finalizing the Posyandu Keliling concept," Atalia said in a statement. (Jakarta Globe)
Factory activity has collapsed with only one third of manufacturing companies and workers operating at present, a high-ranking official has said. Coordinating Economic Minister Airlangga Hartarto said on Thursday that 15,000 manufacturing companies were still operating at present out of a total of 40,000 in normal times. Meanwhile, 4.7 million workers in the manufacturing sector are still working out of the usual 17 million in the sector, which contributes around 20 percent of the country’s gross domestic product, the minister added. (Jakarta Post)
As COVID-19 continues to batter the Indonesian economy, 70 percent of textile and textile product (TPT) companies face permanent closure as a result of plunging domestic and export demand, an industry group has warned. At the moment, 80 percent of textile companies have halted operations temporarily while facing cashflow issues, so financial support from the government is urgently required according to the Indonesian Filament and Fiber Producers Association (APSyFI). The association warned that massive business closures could cause a spike in unemployment, as around 1.8 million TPT industry workers are already furloughed or laid off because of the pandemic. According to the Industry Ministry’s latest estimate, the TPT industry employs around 135,000 workers annually, making up 22.5 percent of the total 600,000 workers in the industrial sector. (Jakarta Post)
Flag carrier Garuda Indonesia has grounded the majority of its fleet as part of the large-scale social restriction to contain the Covid-19 pandemic. In a teleconference with the House of Representatives' Commission VI on Wednesday, Garuda president director Irfan Setiaputra said he expected the number of air travels would continue to drop in May, right through the normally busy Idul Fitri holiday at the end of the month. To reduce losses, Garuda and its staff have agreed on salary postponement and cuts for at least 25,000 workers. (Jakarta Globe)
Indonesia has raised another Rp 62.62 trillion (US$4.05 billion) from government debt papers (SUN) and is in talks with several development banks to raise another $750 million to finance its widening state budget amid the fight against the coronavirus pandemic. The Finance Ministry’s director for government debt papers, Deni Ridwan, said the government had issued three series of bonds through private placements with commercial and shariah banks on Monday. (The Star)
More Indonesians have lost their jobs during the coronavirus crisis as the government's flagship unemployment benefits program, the pre-employment card, registered 8.6 million members by Tuesday. The program doubles as a government safety net for people who have lost their employment during the pandemic. The government has accepted 168,111 participants for program's first wave and 288,154 for the second wave. The participants must sign up for one or more of the 2,000 online training courses available for the program to earn their incentives. (Jakarta Globe)
More than 2,200 Indonesians have died with acute symptoms of COVID-19 but were not recorded as victims of the disease, a Reuters review of data from 16 of the country's 34 provinces showed. Three medical experts said the figures indicated the national death toll was likely to be much higher than the official figure of 765. (Reuters)
The government will soon extend a series of tax breaks issued to counter the economic impact of the coronavirus pandemic to all sectors, eyeing to inject $2.3 billion into Southeast Asia's largest economy for the next six months, Finance Minister Sri Mulyani Indrawati said last week. Last month, the government issued tax breaks for 19 subsectors in the manufacturing industry to ensure companies would have enough cash to see out the coronavirus crisis. Since then, many other businesses have asked for similar incentives to help them cope with slowing demand during the coronavirus pandemic. Sri Mulyani said the government will revise a ministerial regulation to allow the tax breaks to be expanded to other sectors. Currently, small businesses pay 0.5 percent of their sales as income tax to the government. "We estimate a total of Rp 35.3 trillion [$2.3 billion] [for the expanded tax breaks] on top of the tax breaks for the SMEs," Sri Mulyani said. The tax breaks include leeways for individual income tax (PPh 21) for workers in the subsectors. Indonesian companies usually deduct the tax from employees' monthly salary and pay the tax to the government. Not having to do so would help business cash flow. The authorities have also deferred payments of corporate income taxes (PPh 25) and deductible income taxes for importation (PPh 22).
President Joko "Jokowi" Widodo and the House of Representatives have agreed to postpone deliberation on labor issues in the much-anticipated omnibus bill, just in time to persuade workers against holding a mass protest before the May Day amid the Covid-19 pandemic. (Jakarta Globe)
The COVID-19 crisis has fastened the implementation of the pre-employment card (Kartu Pra-Kerja). The measure was originally planned to be launched in the second half of 2020. The card provices programmes to improve the competency of job seekers, laid-off workers, and workers in need of competency improvement. These training programs involve digital platforms, and existing state-owned or private-owned training centres are obliged to collaborate with designated digital platforms. People wishing to enrol in the program must register themselves through the website (www.prakerja.go.id) and their application will be assessed by related authorities. Once selected, they will be given a sum of money to pay for the training. Upon finishing the training, participants will receive certificate and incentives.
However, there is also much criticism on the programme. The lack of transparancy on how the government appoints certain digital platforms to conduct the training has led to conflict of interest accusations. One of President Jokowi's millennials was forced to resign as a consequence. There are also concerns that it is a waste of money since many training programmes are already available on YouTube. The most important point of criticism, however, is that this program does not necessarily ensure employment security for Indonesians especially after the pandemic. The card seems to make it easier for employers to terminate their workers because of the COVID-19 crisis and the acquired skills due to the trainings are not necessarily what the market needs. (The ASEAN Post)
Indonesia President Jokowi announced it last year with great pride, his circle of seven millennial advisors. Within a week time, two of his millennial advisors resigned after being blamed for conflict of interest. Andi Taufan Garuda Putra, a 32-year old entrepreneur, founded Amartha which is a peer-to-peer fintech lender. He wrote unauthoritized letters to subdistrict heads asking them to support the Village, Disadvantaged Regions and Transmigration Ministry's "Village Volunteers Fight Against COVID-19" programme which mission is to find volunteers to educate people outside the urban areas about the pandemic. Andi's company Amartha was involved in the programme. Belva Devara, another one of Jokowi's millennial advisors, stepped down a few days ago after his online education app became one of the training partners for the government's pre-employment card program. Beva is the founder of Ruangguru which provides online training. The government had set aside $358.4m to provide online courses to each of the 5.6m Indonesians signed up to the pre-employment card programme which has become a critical pillar beneat Jokowi's response to help Indonesians who lost their jobs last weeks.
Indonesia's government announced heavy travel restrictions to and from infected provinces starting Friday. The restrictions apply to land, sea, and air transport. With 34 provinces infected the measures come down to a nationwide lockdown effect. The measure is unprecedented since its the beginning of the Ramadan / Ramadhan period in the country. Millions of Indonesians usually travel from the urban centers to their home towns.
Consequences for foreigners:
Public transport between major cities is suspend untill May 31. Private vehicles and motorbikes have been banned from traveling in and out of the major cities that are Covid-19 hotspots, known as "red zones." In these places, stricter lockdown measures are in force to contain the virus. The Greater Jakarta area is one such zone, where coronavirus has spread rapidly in the past month. Indonesia's Ulema Council and Nahdlatul Ulama, the country's largest Islamic organizations, called for Muslims not to pray together in the mosques. The government has not implemented a ban to close any mosques at the moment. Train services are suspended until June 15, air travel until June 1, and travel by sea until June 8. Cargo transport is exempt from the ban but there are also exceptions allowed for logistics, food supply, medicine supply, transportation for paramedics, fire department and ambulances according to Adita Irawati, a spokesperson of the Transportation Ministry. The measures will be enforced by checkpoints on the road and thousands of soldiers are deployed to prevent people from ignoring the order.
- EMEx classifies Indonesia 'lockdown measures' as Severe because of new measures and the size of red zones
President Jokowi and Zainudin Amali, Sports and Youth Affairs Minister, announced the that the 2020 National Games will be postponed until next year. The games were scheduled to be held from October 20 to November 2 in Papua. The Papua provincial government has imposed a lockdown and the uncertainty around the spread of the virus makes it difficult to predict where the country is in a few months from now.
Indonesia's Chamber of Commerce and Industry, the country's top lobby group, warns Indonesia is running out of time to contain the impact of the coronavirus pandemic. The government should immediately scale up its containment plans by investing tens of billions of dollars to lessen the economic shock. The groups says the economy needs at least 1,600 trillion rupiah which is about $102b USD over the next six months. About 600 trillion rupiah is needed for wages of millions of people out of jobs and the other 400 trillion should be spend on social safety net programs and the healthcare system of Indonesia the group claims. The government has in recent weeks announced stimulus plans and emergency measures worth about $28b USD.
President Joko "Jokowi" Widodo officially issued a ban on mudik, the annual exodus of millions of people from the country's urban centers at the end of the Ramadan fasting month, on Tuesday in a desperate attempt to try to limit the spread of the coronavirus pandemic. "I have made the decision to ban everyone from returning to their hometown," Jokowi said during a limited cabinet meeting at the Merdeka Palace in Jakarta. The decision to impose a nationwide ban on the Idul Fitri exodus was based on the government's own evaluations. The Transportation Ministry indicated that 68 percent of Indonesian Muslims have decided to cancel their mudik plans this year, 24 percent are insisting they would carry on with their travel plans and 7 percent have already made the arduous trips back to their hometowns. "This means there's still a substantial amount of people wanting to go back to their hometowns for Idul Fitri, around 24 percent of Indonesian Muslims," Jokowi said. Last year, 33 million Indonesians left big cities during mudik for small towns and villages around the country. Previously, the government only slapped the mudik ban on civil servants, soldiers and police officers and employees of state-owned enterprises. Ordinary Indonesian Muslims were only warned not to go on the long exodus trips for fear they would spread the coronavirus in their hometowns and villages. The president has asked all related ministries to take anticipatory steps to implement the mudik ban. According to Jokowi, most people who have decided against mudik are already registered with the government's social safety net programs. One of the deciding factors for the mudik ban was the government's assessment of the distribution of its social safety net programs in Greater Jakarta, which include a staple food card, a pre-employment card and an electricity subsidy. Meanwhile, the National Police said they have made preparations for two different mudik scenarios this year.
- One of them is a plan to close off toll roads in and out of Jakarta from private vehicles. "At the moment we're preparing for two different scenarios [for mudik]," National Police spokesman Chief Comr. Asep Adi Saputra said in a statement. The first scenario involves a nationwide ban on mudik. If this happens, the police will close off both toll and non-toll roads leading in and out of Jakarta. "Accesses to and from Jakarta will be closed. Only vehicles carrying basic supplies such as food, medical equipment and fuel will be allowed into the city," Asep said.
- The other scenario involves just a warning against mudik, in which case the police will reinforce its standard operating procedure to safeguard the yearly tradition with large-scale social restriction (PSBB) and physical distancing policy rules, especially at checkpoints along the mudik routes.
As of Monday, the number of confirmed Covid-19 cases in Indonesia had reached 6,760, with a death toll of 590 and 747 recoveries. In the absence of widespread testing, the government has also reported 16,343 people under the category of patients under observation (PDP), aka people who show symptoms of Covid-19 and have been hospitalized, and 181,770 people under the category of persons under surveillance (ODP), or people who have had contact with confirmed cases and now self-isolate at home. (Jakarta Globe)
The deliberation of the disputed omnibus bill on job creation has met further resistance as the country is facing massive layoffs due to an economic slowdown during the coronavirus pandemic. The draft bill, which seeks to concurrently amend 79 laws including the 2003 Manpower Law, has been vehemently opposed by labor unions that have condemned the bill for cutting labor rights and instead benefitting employers. As millions have been furloughed and laid off, labor unions plan to hold mass rallies nationwide on April 30 to oppose the bill despite a ban on crowds under large-scale social restrictions (PSBB) that have been implemented in Jakarta and other cities. (Jakarta Post)
The Indonesian government gave itself more control over the state budget, including fiscal powers, to fight the economic impact of the virus. It also provides immunity for the officials who will execute the new provisions. Many politicans and Indonesians expressed their anger over the law in media or with concerning hashtags on social media.
S&P Global Ratings’ downgrade of Indonesia’s outlook is not a reflection of fundamental economic problems, central bank Governor Perry Warjiyo said, stating that policy steps taken in response to the coronavirus pandemic will help to restore the nation’s financial trajectory. The comments from the Bank Indonesia chief come after S&P cut its outlook for the nation to negative from stable, while affirming its long-term foreign currency debt rating at BBB, the second-lowest investment grade score. The change was to reflect “additional downside risk to the government’s fiscal and external metrics” from the pandemic, S&P said. (Jakarta Post)
Indonesia is going to expand tax incentives it currently gives to some manufacturing industries to cover 11 more sectors, such as food, trade, telecommunication, mining, tourism and transportation, the country’s tax chief said on Friday. The incentives to be expanded include the temporary waiving of income tax on salaries for some employees, discounts on corporate tax instalments and the suspension of import taxes, Suryo Utomo, the taxation director general, told an online news conference. The tax breaks, which will also be extended to businesses in forestry, logistics, construction, and oil and gas, are formed to assist companies survive the economic impact of the coronavirus pandemic, he said.
Garuda, Indonesia's national carrier, launches Garuda Flex. The new product is meant to motivate travelers to come to Indonesia. Garuda Flex allows travelers to change their traveling date three times for free. The product is now valid for all bookings untill 30 April 2020 and for all traveling periods untill 30 June 2021. More information about Garuda Flex.
The coronavirus outbreak is set to wipe out more than US$10 billion from Indonesia's tourism revenue this year as leisure travel comes to a near complete halt according to the Indonesian government. The country is preparing stimulus packages for the industry and a safety net for workers to blunt the impact, President Joko Widodo said at a Cabinet meeting. The government is open to adding to its US$28 billion in fiscal stimulus to fight the outbreak and is prepared to widen its budget deficit beyond the current goal of 5.07% if needed. (The Star)
Jakarta, the epicenter of corona cases in Indonesia, will see an expansion of the partial lockdown. The authorities want to restrict movement in more areas near the capital. Bekasi, Bogor, and Depok are the new areas brought under social distancing rules. This includes a ban on public gatherings of more than five people, religious and social events which will have a serious impact on the Ramadan season. It also includes mandatory use of masks. The mentioned cities will implement the lockdown on Wednesday 15 April while other sattelite towns follow on Friday 17 April. Also Pekanbaru will implement similar rules and is the first non-Java city to do so. Current plans will bring 34 million people under tighter social distancing rules. President Jokowi ordered airlines to limit the number of passengers to 50% of airplane capacity making it more difficult and expensive to travel.
New York Times: Indonesian authorities are making efforts to prevent an economic recession due to the coronavirus outbreak, but their worst case scenario is for contraction in two consecutive quarters beginning this April-June, the country's finance minister said. Sri Mulyani Indrawati said on Tuesday her worst case scenario, assuming a prolonged outbreak, is for gross domestic product to shrink by as much as 2% in the second quarter, followed by another contraction in the third quarter. "Two times of contraction and we will enter a recession. We strive for this not to happen," she told an online news conference. Indrawati previously said her baseline scenario is for 2020 GDP growth of 2.3%.
The West Java administration wants to impose larger restrictions on the Greater Bandung area. The request will be submitted to the Health Ministry following the approval of such measures in areas of Jakarta.
Indonesia has ordered curbs on public transport ahead of the annual exodus to home villages that marks the end of the Muslim fasting month of Ramadan, in a bid to slow the spread of the coronavirus, the government said on Sunday. About 75 million Indonesians usually stream home from bigger cities at the end of Ramadan, due this year at the end of May, but health experts have warned against a surge in cases after a slow government response masked the scale of the outbreak. Public buses, trains, airplanes and ships are allowed to fill only half their passenger seats, under a new regulation that also limits occupation of a private car to just half the seats, while a motorcycle may be ridden only by one person. "The essence of this new regulation is to carry out public transport control...while still meeting the needs of the people," transport ministry spokeswoman Adita Irawati said in a statement posted on the cabinet secretariat website. (Asahi Shimbun)
An interesting measure by the Indonesian government in supermarkets. Grocey shoppers will no longer need to push a shopping cart around a supermarket at the multi-format modern tertailer Matahari Putra Prima (MPPA). It introduced a "Park & Pickup" program, a non-contact shopping service allowing customers to have groceries delivered to designated parking lots. Customers won't have to leave their car. It compliments the already existing web-based Hypermart Online service and Chat & Shop on Whatsapp. About 20 of its shops will be served this way according to a statement made by the firm. Supermarkets have been fighting waves of panic buyers that eventually led to the National Police's Food Stability Task Force rationing purchase for rice, sugar, cooking oil and instant noodles. Another commonly found measure at supermarkets is marking the spot where customers should stand. Others carry out thermal checks.
The government has extended its social aid programs to offer more financial and food assistance to help Indonesia's most vulnerable in the coming three months. President Jokowi said the government's cash transfer and food aid programs would now be made available to 4.2 million people in Greater Jakarta and another 9 million people outside the Covid-19 red zone. The president also announced the National Police would take money from their budget to provide monthly cash transfers for 197,000 taxi and bus drivers. Close to 24.8 million Indonesians currently live under the absolute poverty line – living with less than $1 a day – and all of them are now eligible to receive conditional cash transfers and food aid. Around 115 million Indonesians are also likely to fall back into absolute poverty should there be a shock to the economic system, according to a January World Bank report titled "Aspiring Indonesia Report, Expanding the Middle Class." (Jakarta Globe)
Jakarta will close down schools and workplaces starting Friday 10 April. A rise in burials has caused concern about the real death rate in Indonesia's capital. The city's governor, Anies Baswedan, has been trying to implement more restrictions for a longer time but this has been resisted by the central government who fear economic despair and social unrest. Also limits on religious events and cultural activities will be allowed now. Workplaces for health, energy, food and finance including the capital market will remain open. Also public transport will keep operating but with reduced frequency and passenger capacity. Groups of more than 5 persons in public places willl be banned.
The upcoming restrictions in Jakarta are causing unrest. About 2.5 millions migrant workers are about to travel back to their home provinces. The restrictions don't include a travel ban. The Ramadon month, which is about this period, is an important time for Indonesians to travel back home. President Jokowi refuses wider restrictions because it hurts the poor he said. Thursday 9 April, the President did ban government employees, military and police personnel and those employed by state-owned enterprises from traveling during Ramadan and also called upon the public to avoid trips.
- Southeast Asia's latest inventions to combat the spread of the new corona virus. Click here for more.
Indonesia's debt over 2020 is expected to triple. A budget revision estimated an increased deficit spending of $61.5b USD this year. That a jump of 286% from the initial target for 2020. The government plans to offer sovereign debt papers worth Rp 549.6 trillion, an increase from the initial Rp 389.3 trillion, while also planning to raise Rp 450 trillion in “pandemic bonds”, given that demand for government bonds has significantly declined. Finance Minister Sri Mulyani Indrawati said that the government would look for safe financing sources, including the option to use the endowment fund for education (LPDP) as well as accumulated cash surplus (SAL), but said that “would not be enough”. “Therefore, we need to issue government debt papers to look for the best financing sources. We will be extra careful in navigating these uncharted waters,” she told House of Representatives Commission XI, which oversees financial affairs. (Jakarta Post)
The government has estimated that tens of thousands of workers have lost their jobs so far. In Central Java, 24,249 workers have been laid off while 191 companies employing 148,791 workers have been affected by the COVID-19 outbreak. In West Java, 53,365 have been affected by the COVID-19 pandemic. The West Java Manpower and Transmigration Agency recorded that 34,365 workers have been put on leave, 14,053 have been furloughed, while 5,047 have been laid off. Meanwhile, the North Sulawesi Transmigration and Manpower Agency recorded that 1,275 workers in the province have been laid off, while 2,576 have been furloughed waiting for business to recover. Moreover, 262 companies across the region report that they have closed down because of the outbreak. The government has issued a pre-employment card for people who lost their jobs. The card gives a four month training in order for people to acquire skills necessary to get a new job. (Jakarta Post)
Jakarta's partial lockdown has been approved by the Ministry of Health. The regional government can implement large-scale social restrictions in the capital. It is the first region where such measures are applied.
Indonesia's tourism sector will take at least a year to recover. Even when the pandemic slows later on this year, global consequences will have long term consequences. Besides demand and buying power, also pyschology is important. Many travelers are afraid to get stuck in a country without proper healthcare. Data shows that Indonesia had only 885,067 foreign tourist arrivals in February which ia 28.85% decline from February 2019. March and April won't be much better. Besides tourist psychology and global recovery it will also take time for Indonesian businesses to recover. Many of them are depended on daily demand which has now fully collapsed.
- Please click here for our latest production on China, the Belt and Road Initiative, and the impact on Southeast Asia
Indonesia has completed the prototype of a COVID-19 testing kit. Nusantara TRFIC-19, as it is named, is important because it uses virus genomic data spreading in Asia. It gives Indonesian authorities the opportunity to easier and more accurately detect how COVID-19 is spreading in the country and the region.
The Indonesia ministry of health will start working together with the ride-hailing application Grab and the digital health platform Good Doctor Technology Indonesia. By using the services, people can check their COVID-19 risk status by filling out a series of questions through the Grab application. The service will be connected with doctors and available 24h per day.
The Confederation of Indonesian Trade Unions (KSPI), one of the biggest labor groups or trade unions in Indonesia, wants to organize a massive protest against the omnibus bill on job creations following the House of Representatives' decision to start its deliberation according to the Jakarta Post. The protest is intended to be organized in mid-April with 50.000 workers in the Greater Jakarta region. Several protests used to be planned against the bill for March but were suspended as a result of the Omnibus Bill. The epidemic didn't stop the government from moving forward and to bring the bill into law as soon as possible.
Global investors still have confidence in the Indonesian economy and may back a drive to buy new debt securities issued to finance the government's stimulus package for mitigating the Covid-19 pandemic, Perry Warjiyo, the governor of Bank Indonesia, the country's central bank, said. The governor said the largest economy in Southeast Asia may still avoid a recession this year and expand by more than 2.3 percent. The key to this outlook was the government's Rp 405 trillion ($24 billion) stimulus plan to counter the impact of the coronavirus pandemic on small businesses and families living below poverty line. Perry said he suggested the government enlarge the size of its dollar-denominated global bond issuance this year – currently set at $8 billion – to finance the plan. The government can also increase the size of its regular rupiah-denominated bond auction to Rp 20 trillion from Rp 15 trillion. A government regulation in lieu of law (Perppu) issued on Tuesday granted the central bank the power to buy the so-called recovery bonds directly from the government. Previously, Bank Indonesia could only buy government bonds in the secondary market. (Jakarta Globe)
President Jokowi announced a safety net program for 3.6 million inhabitants of Jakarta. It would be made available for low-income families. To date the Jakarta provincial government has given such aid to 1.1 million ressidents. The administration will focus in its $25bln USD package on healthcare spending, social safety net, tax breaks and debt restructuring for corporation and small businesses. Out of that about 25% of the ammount will be used for the social safety net program including a staple food card, a pre-employment card and the yesterday announced electricity subsidy.
President Jokowi has announced free electricity and discounts for households that are the hardest hit by the COVID-19 crisis. The state-owned electricity company PLN will supply free electricity for three months starting Friday 24 April in the lowest category of six. It will also provide a 50% discount for 7 million households in the second lowest category or three months. As part of the state of emergency that has been declared by President Jokowi, Indonesia will spend an extra Rp 405.1 trillion (US$24.6 billion) from the 2020 state budget for medical needs, the social safety net and relief for small and medium businesses
Several regions are starting to enact curfews to battle the spread of the virus. Among them are:
- Balikpapan (East-Kalimantan)
Sikka Regency (East Nusa Tenggara)
Pekalongan (East Java)
Mataram (West Nusa Tenggara)
Confusing times in Indonesia. President Jokowi has declared a COVID-19 public health emergency and plans to impose large-scale social restrictions. A spokesperson said that this would annul proposals for national or regional lockdowns. However, Luhut Pandjaitan, Minister of Maritime Affairs and Investment, stressed that the government would take this week a decision on area quarantines or so-called lockdowns and that he is preparing a draft version that would enable regional lockdowns in Indonesia. Among the regions that want such are lockdown is the capital Jakarta. The city is preparing for a regional lockdown which includes satellite cities Bogor, Depok, Tangerang and Bekasi but cannot do it without the consent of the national government. The administration of both the region and cities claim that all basics, such as food, are prepared for. Bali has declared a state of emergency and imposes stricter measures on visitors. All people entering the islands are obliged to do a 14-day self-quarantine.
Indonesia will temporarily bann all visits and transits by foreign nationals. The announcement was made by Minister of Foreign Affairs Reno Marsudi after meeting with president Jokowi. Exceptions include those with work permits as diplomats althouth the health protocols still apply. Indonesia is very worried about two group of travelers. Indonesians returning from abroad, especially the big migrant groups in Malaysia and working on cruise ships. The second group are Indonesians working in Jakarta but now, due to social restriction policies and inatitives, returning to their home city.
Indonesia is also preparing a presidential emergency decree allowing for an annual budget deficit of larger than 3% which is under current regulation not allowed. The government wants to use it to spend more on the poorest in the country. The exemption would apply for three years and would end in 2023.
President Jokowi has ordered the government to impose stricter rules on physical distancing. He also wants new civil emergency policies which are called "health quarantine policies". A civil emergency will only be declared if the situation worsens. The new regulations are necessary because they serve as guidelines for the local administrations. Only the national government can enact regional quarantine policies.
Civil society organisations are asking the government to delay the coming into force of the Omnibus Law and to focus in stead on preventing the spread COVID-19. The long-awaited Omnibus Law on job creation was submitted to parliament in February 2020. It brings together the fragmented legislaiton in Indonesia's complex legal code, cuts red tape, it concentrates investment proposals under a single authority, and deals with complaints from companies regarding termination benefits that have been standing for a long time. The law was welcomed by the business community and some are even saying its more important for the government to implement them as quick as possible. Trade unions and civil society groups however have been protesting the law for a long time. The argue the bill would harm workers, especially poor families, during the COVID-19 crisis.
Jakarta will probably see a quarantine scenario starting next week. The virus is not contained and local administrations have started to block off districts. The national government has therefore been forced into preparing regulations for the whole of Jakarta to make sure it is well executed. A decision is expected on monday and it will probably mean noone can leave or enter the capital. Other measures have so far not been mentioned.
The government of Jakarta has extended the state of emergency untill Sunday 19 April. Indonesia's province of Papua has closed its airports, sea ports, and lorders for 14 days.
The Indonesian government is preparing new lockdown regulation despite President Jokowi's persistent statements that he doesnt want it. The regulation stipulates the procedures and requirements for imposing regional quarantines, also known as lockdowns, a minister said. The government is speeding up the drafting so it could be used right away. Top Indonesian doctors called for a lockdown earlier this week stating the current measures calling for social distancing are not enough. More and more regional areas are scrambling to close down their borders. Countless of their citizens are returning from Jakarta where they work but now have to stay at home. They prefer doing so in their home province.
AirAsia Indonesia has announced to suspend all flights starting Saturday 11 April. Domestic routes will be suspended till Tuesday 21 April and international routes till Sunday 17 May. Passengers can access support.airasia.com to either reschedule their flight before Oct. 31 at no additional charge, or convert the amount paid for the flight into a credit account that can be used for the next 365 days. Those who booked their flights through booking group services, travel agencies or other third parties are advised to contact the respective parties.
Garuda Indonesia announced it will continue some of its routes including the connections to Australia and the Netherlands.
The government of West Java is considering a lockdown in parts of its consticuency. The biggest concern are inbound travelers from Jakarta following the government's recommendation to work and study from home. The government is planning to battle the disease with massive rapid testing focusing on three hotspots; Jakarta, West Java and Banten. They will focus on vulnerable groups including medical workers.
Big concerns about Indonesia's healthcare capacity and quality. There is a deficit in hospital beds (12 beds per 10.000 people compared to 115 in South Korea), medical staff (4 doctors per 10.000 people while South Korea has 24), and intensive care facilities. Indonesia's healthcare sector is known to be overstressed lacking infrastructure and capacity. Remote regions lack access to healthcare while also in the bigger urban areas its difficult to get quality care. Wealthier Indonesians often travel abroad, to Singapore for example, to get the help they need what is now basically impossible.
Erick Thohir, Minister of State-Owned Enterprises (SOE's), has instructed the SOE's to prepare for big losses as a result of low demand. Especially the companies involved in transportation and travel are vulnerable. He mentioned state airport operators PT Angkasa Pura I, PT Angkasa Pura II and train operator PT Kereta Api Indonesia (KAI). SOE's have to give cash assistance to families in need.
Jakarta Governor Anies Basweden has declared a state of emergency for the next two weeks. All stakeholders, including corporations, social organizations and religious groups have to take drastic action. All tourism spots have been closed and entertainment venues are following. All corporations are urged to close their offices and facilities and let employees work from home. If that is not possible they are urged to reduce the number of employees as much as possible. Public transport is limited as well. The administration is preparing a financial stimulus package for the 1.1 million Jakartans who depend on daily wages. Food supplies will also be taken care of by the city administration. (Jakarta Post)
Governor Anies Baswedan of Jakarta has declared a state emergency for the next two weeks. Public entertainment such as bars, spa's, and cinemas will be shut starting Monday 23 March. Public transportation will be limited. Companies are urged to let staff work from home. Also religious activities including the Islamic Friday prayers and Christian services are suspended for two weeks.
The pressure on the Jokowi administration is growing to consider a lockdown strategy. Indonesia is the odd man in Southeast Asia, with a growing number of infections but very limited social restrictions. EMEx has therefore produced an analysis on why Indonesia has no lockdown yet and if we can expect one in the near future. As a result of all factors considered, EMEx expects a lockdown for Java and Bali starting next week. Please click here for the full analysis.
The Netherlands Embassy in Jakarta has send a letter to all Dutch nationals in the country saying: "It is expected that the number of infections will continue to rise and that Indonesia is inadequately prepared to absorb all patients with severe symptoms and who are in need for a hospital." Many countries are worried about Indonesia's approach towards this crisis.
- For full letter (in Dutch) by Netherlands Embassy please click here.
- Please click here for EMEx' analysis on why there isn't a lockdown in Indonesia and what to expect.
The Indonesian rupiah (IDR) depreciated 4.5% on Thursday and nears Rp 16,000 per US Dollar a level that hasn't been seen since the 1998 crisis. The IDR depreciated 14% this year which makes it the worst performing Asian currency. In the last month alone the IDR depreciated 13.7%. Bank Indonesia's easening efforts didn't prevend the downfall, while several analysts wonder if the central bank even has enough ammunition to prevent a further depcreciation since Indonesia has very limited foreign currency reserves to GDP compared to other Southeast Asian countries. Indonesia stood at 10.9% last year and that figure is significantly lower than Malaysia which stood at 27.2 percent, Thailand at 39.4 percent and the Philippines at 21.7 percent, according to the Jakarta Post.
The Indonesian government announced new policies for people crossing from and to Indonesia in a response to the spread of the coronavirus or COVID-19. Foreign arrivals to Indonesia are no longer permitted for one month and Bali will be closed. These measures will take effect on Friday 20 March at 00.00 Western Indonesia Time (GMT+7).
- EMEx classifies Indonesia's 'travel restrictions' as Severe because visitors of all nationalities are heavily affected
- Click here for a full update on latest Indonesian measures.
Jakarta has closed all schools and universiteit and ordered remote teaching for at least two weeks. The Jakarta administration also closed several entertainment places owned by the local government. The weekly Car Free Day event is suspended for two weeks as well. The environment and forest ministry has decided to temporarily close 16 national parks and nature tourism parks in Indonesia starting Monday 23 March. Several other regions, including the province of Central Java and the city of Manado, have also announced to close their schools and universities to fight the spread of the virus. (Jakarta Post)
Despite the closures put in place by local administrations there is no clear direction given by the central government. For now, local administrations and the private sector, as well as ministries, have decided for themselves how to deal with the threat.
- EMEx classifies Indonesia's 'lockdown' as Medium because of limited restrictions and unclear strategy of Indonesia's government
EMEx provided an analysis of the impact of the corona virus on Indonesia's economy. Click here for more.
Ailing Thailand low-cost carrier NokScoot, a joint venture with SIA's Scoot, to enter liquidation
Thailand's long-haul low-cost carrier NokScoot Airlines will enter liquidation as the coronavirus pandemic worsened conditions for the struggling airline, parent company Nok Airlines said on Friday (June 26).
NokScoot, a joint venture between Thailand's Nok Air and Singapore Airlines' Scoot, wrestled to grow its network in a highly competitive sector for years and was yet to record a profit since formation in 2014.
The joint venture is set to hold a shareholders meeting on July 14 to go ahead with the dissolution and to appoint a liquidator, Nok added.
Scoot said in a statement on Friday that it “does not see a path to recovery and sustainable growth for NokScoot”. In considering other possible alternatives to the liquidation, it also offered to sell its 49 per cent stake in NokScoot to Nok Air for a nominal sum of THB1 (5 Singapore cents), but this was not taken up. (Straits Times)
Thailand coffee and tea prosper despite economic troubles
Businesses remain hamstrung by the pandemic, leading most enterprises to freeze their investment amid the uncertainty.
Yet some companies are bucking the trend.
Several coffee shops and tea chains debuted their business shortly after the government announced its lockdown measures. Among them are %Arabica, the Japanese specialty coffee brand, which opened in early June at Iconsiam mall.
Thai tea chain Brew Bar and Canadian coffee shop Tim Hortons also recently opened new cafes at Seacon Square Bangkae. (Bangkok Post)
B100bn of Thailand recovery projects screened by economic agency
The National Economic and Social Development Council (NESDC) has screened the first round of 213 projects worth 101.48 billion baht out of a 400 billion baht budget earmarked to help those suffering from the impact of the Covid-19 pandemic.
Thosaporn Sirisumphand, secretary-general of the NESDC, said the agency plans to meet with the cabinet on July 8 with a view to getting them started by the end of the month.
This Wednesday, the committee chaired by Mr Thosaporn will reduce the first batch to a final list worth 80 billion baht
So far, state agencies have already submitted more than 46,000 proposals worth about 1.5 trillion baht to the NESDC.
In the first round, the agency targeted projects targeting three areas -- plans to strengthen the grassroots economy, create sustainable growth and stimulate domestic consumption and tourism, he said.
Noteworthy grassroots plans include projects to promote the "New Theory", or sufficiency economy, in the agriculture sector which will cover a total of 240,000 rai.
Among the others are a scheme to hire about 16,000 volunteers or laid-off workers to take care of 700,000 elderly nationwide and a project to hire two new graduates per tambon, totalling 15,510 jobs in 7,255 tambons, to collect information for use in "big data" analysis.
Mr Thosaporn said the government also planned to strengthen community businesses via a 15.29-billion-baht injection into the National Village Fund and the Urban Community Office. (Bangkok Post)
Bank of Thailand foresees no surge in bad loans
The capital positions of Thailand's commercial banks will remain strong and the latest measures to bolster their buffer will be good for the long term, the central bank said on Monday.
The Bank of Thailand on Friday asked lenders to prepare capital management plans and not to pay interim dividend payments or buy back shares, sending banking shares tumbling on Monday.
The central bank would prevent bad loans at banks from surging, as happened during the 1997-98 Asian financial crisis, Deputy Governor Ronadol Numnonda told a news briefing. (Bangkok Post)
Thailand aims to turn away from mass tourism and target wealthy
Thailand’s tourism-revival strategy is to target big spenders seeking privacy and social distancing in the COVID-19 era, rather than try to attract a large number of visitors.
The pandemic provides an opportunity to reset the sector, which had become reliant on Chinese groups and backpackers. Once the country’s borders are reopened and so-called travel bubbles are agreed upon, marketing efforts will be geared toward wealthier individuals who want holidays with minimal risks, Tourism Minister Phiphat Ratchakitprakarn said in an interview.
The government will initially allow a small number of arrivals, such as some business executives and medical tourists. It is also working with the travel industry to identify and invite individuals in target demographics, which will probably include previous visitors to luxury resorts in the islands of Phuket, Samui, Phangan and Phi Phi, the minister said. Phuket is “a prototype” because it has all the needed facilities.
People may be required to pass COVID-19 screenings before traveling and upon arriving, choose a single resort island and remain for a minimum period of time.
The “high-end visitors” will be able to travel freely while they’re on the island and be allowed to leave for home or other destinations in Thailand once the minimum 14 days have passed. The country plans to court such visitors, possibly during the winter months of November-February when European and American travelers seek out warmer climates, Phiphat said.
“One person can easily spend as much as five by staying at the finest hotels,” he said, adding that full and free travel should become a “thing of the past.”
Thailand isn’t the only country grappling with the question of how and when to reopen for visitors. Across Southeast Asia — one of the most tourism-reliant regions in the world — hotels and travel businesses are slowly kicking into gear as countries that have succeeded in flattening their virus curves ease lockdown restrictions.
Thailand’s first few travel-bubble pacts, with nations such as Japan and Australia, probably won’t be ready until at least August, Phiphat said. Thailand also is mulling a program to allow visitors from specific Chinese cities and provinces, he said.
Thailand’s borders are currently locked to all but essential travel through June 30. Most restrictions on domestic travel were lifted this month.
The goal is for Thailand to have 10 million foreign arrivals this year — one-quarter of the 2019 tally — Phiphat said. Total tourism revenue is forecast at 1.23 trillion baht ($39.6 billion) this year, down 59 percent from last year.
The tourism sector will account for about 6 percent of gross domestic product in 2020, down from 18 percent last year, Phiphat said. The dearth of travelers is one reason Thailand’s economy is forecast to contract as much as 6 percent this year. The government is rolling out stimulus worth 15 percent of GDP, according to World Bank estimates.
A lockdown, social distancing, tight control of borders and near-universal adoption of face masks enabled Thailand to restrict its official virus tally to just over 3,000, with 58 deaths.
The government has recently relaxed the lockdown and has detected no local transmission of the novel coronavirus for more than three weeks.
Phiphat said Thailand sees the crisis as an opportunity to address problems that existed before the pandemic, including over-crowding at some beaches and temples and environmental destruction.
In the quiet months without foreign travelers, sea turtles have returned to lay eggs on Thai beaches, pink dolphins have been seen frolicking with fishermen and manatees swam to shore to snack on sea grass, Phiphat said.
“If we don’t use this chance to create the most benefit for the industry, Thailand will lose out,” he said. “This is an opportunity to reset the entire tourism system.” (Japan Times)
Airports of Thailand forecasts 50% fall in revenue, passengers
Airports of Thailand (AoT) said it expects passenger numbers and revenue to fall by 50% in 2020 as a result of the coronavirus crisis.
AoT, which manages six airports including Bangkok's main Suvarnabhumi, on Wednesday forecast a 50.7% year-on-year drop in revenue for its 2020 fiscal year and a 42.2% fall in 2021.
If a vaccine can be developed and distributed by July next year, the Thai economy can begin to recover after January 2022, then air traffic volumes could return to normal levels by October that year, state-owned AoT said in a statement.
It expects that by 2023, passenger numbers will reach 144.2 million and 902,000 flights, slightly above pre-crisis levels.
"Such forecasts are based on the assumption that a second wave of Covid-19 infections still strike different countries targeted for making bilateral agreements on (a) travel bubble with Thailand," AoT said. (Bangkok Post)
Thailand approves $1.34 billion of investment plans
Thailand has approved five investment project applications worth about 41.8 billion baht ($1.34 billion) and measures to strengthen the agricultural sector and agro-industry, the state investment agency said Wednesday.
Of the pledges, Thai Oil will invest 24.1 billion baht to produce 250 megawatts of electricity using oil waste, while B.Grimm Power will spend 6 billion baht on a natural gas-fired power plant, the Board of Investment (BOI) said in a statement.
Summitr Group will invest 5.5 billion baht to produce about 30,000 electric battery-powered vehicles a year, mainly for the domestic market, the BOI said.
Envico will invest about 2.47 billion baht to produce recycled plastic pellets, and Bangkok Arena will spend about 3.75 billion baht to build a convention hall, the BOI said.
"It is very encouraging to see that despite the global economic situation due to COVID-19, Thailand, which has done well in containing the outbreak, sees a continuous flow of investment," BOI secretary-general Duangjai Asawachintachit said.
The agency said it had also adjusted investment promotion terms and benefits for the agricultural industry to encourage the use of technology and innovation. (Market Screener)
Thailand's Phuket airport reopens after two months
The international airport of Thailand's famous resort island of Phuket resumed operations on Saturday after a two-month shutdown caused by the COVID-19 pandemic, the Civil Aviation Authority of Thailand said.
The airport was initially scheduled to reopen on May 1, but the provincial administration decided to continue the shutdown as in late April to early May. Phuket recorded the second highest number of COVID-19 cases in Thailand, after Bangkok.
Phuket is only allowed to manage domestic flights, as international flights are still banned under Thailand's state of emergency. Meanwhile, the Airport Rail Link between Bangkok and Suvarnabhumi Airport is scheduled to reopen on Monday.
Suthep Panpeng, managing director of SRT Electric Train Company, an affiliate of the State Railway of Thailand, said that more trips will be provided as passenger demand rises. Also, safety measures will be strictly enforced on the trains, including the requirement to wear face masks and maintain social distancing.
Thailand has recorded no local transmission of the novel coronavirus for 19 days straight, with all of the recent cases being imported infections. However, although travel restrictions will be eased and most domestic businesses will be allowed to resume operations, inbound tourism is likely to remain prohibited, the Bangkok Post reports.
Tourism revenue is now limited to domestic travel and many hotels are reluctant to reopen even after the lockdown has been lifted as foreign arrivals will probably be limited for some time to come.
Sarayut Mallum, president of the Phuket tourism industry council, told the Bangkok Post that he believed most hotels in Phuket will prefer to delay opening to customers as there are not enough tourists to sustain their occupancy and generate profits. He added that a full reopening is possible at the onset of the next peak travel season in October.
Thailand has so far reported 3,134 confirmed COVID-19 cases and 58 deaths. Since the inbound travel ban was imposed in April, the country's tourism sector has witnessed an unprecedented challenge due to lack of international tourists. (CGN)
Central bank clarifies debt figures
The Bank of Thailand has calmed down concern about an increase of its liabilities to more than 6 trillion baht, saying they are not public debt.
The Royal Gazette has published the weekly report of its financial position ending April 9. It shows "other liabilities" at 6.13 trillion, with accumulated losses of 957.5 billion baht.
The debt increased from 5.6 trillion baht in the previous week ending Feb 27. By comparison, the liabilities from the same weekly report in March 2015 were at 3.86 trillion baht.
The figures raised concern about the country's fiscal stability, especially after the bills for 1.9 trillion baht Covid 19-relief borrowings were passed last week.
It also brought to mind the painful memories of 1997. With high foreign debt by the private sector, the baht came under attack by foreign speculators. The central bank tried to defend the currency until it ran out of reserves. The chain of events that ensued was the eventual flotation or devaluation of the baht — it fell by more than half at one point — and a domino effect on regional currencies in what went down in history as the Asian financial crisis.
Thais travelling domestically in droves amid lockdown easing, prompting Thailand authorities to urge caution
Thais are travelling to other parts of the country in droves as the country is gradually easing its partial lockdown measures, including inter-provincial travel restrictions, prompting reclosure warnings from officials.
On June 3, which was a public holiday, thousands flocked to Bang Saen beach, an hour-and-a-half drive from Bangkok, with photos of long lines of up to 2km of traffic into the beach area becoming viral online.
Prime Minister Prayut Chan-o-cha warned that if the incident at Bang Saen recurs, Phase 4 - the final phase of the lockdown easing expected later this month - could be postponed.
The first phase of reopening of places began on May 3, with restaurants, hair salons, parks, markets, open-air sports venues, pet grooming salons and nurseries opening. People have to wear masks and practise safe distancing and are also required to check-in and check-out at the venues.
Among the venues that have yet to reopen are schools, bars and nightclubs, sports stadiums, national parks, amusement parks, soapy massage parlours and concert and exhibition halls.
At the June 6-7 weekend, Thais still thronged Bang Saen and a few other reopened beaches like Hua Hin, 140km south of the capital, but it was not the same chaotic scene as the previous week.
Fourteen checkpoints have been set up around Bang Saen beach since last week, said Mr Narongchai Khunpluem, mayor of Saensuk Municipality in charge of the beach. (Straits Times)
Thailand prepares for reopening of economy
Asian nations are expected to be the first group of countries Thailand will engage in "travel bubble" talks with, Tourism Authority of Thailand governor Yuthasak Supasorn said on Sunday (June 7).
"Travel bubble" is a post-Covid-19 era term in the tourism industry, suggesting match-making between countries with manageable and low number of Covid-19 cases to allow free flow of uninfected tourists between them without the need to quarantine the visitors after their entry.
Prime Minister Prayut Chan-O-Cha recently instructed the Tourism and Sports Ministry to prepare for bilateral negotiations on travel bubble agreements.
Earlier, Tourism and Sports Minister Pipat Ratchakitprakan said that such talks might happen in the second half of this year.
Yuthasak expected that the first groups of travellers to Thailand would be from the Meetings, Incentive Travel, Conventions, Exhibitions segment and health conscious travellers. (The Star)
Big deals prompt monopoly law rethink in Thailand
The Office of Trade Competition Commission (OTCC) is set to revise criteria concerning the market monopoly law to plug any loopholes and leave no room for debate when big merger and acquisition deals are up for consideration.
Sakon Varunyuwatana, chairperson of the commission, said the OTCC is gathering public input to improve the criteria to prevent monopolies from being formed.
The market dominance criteria come under the Trade Competition Act which came into effect in 1999 and public opinion is being collected until June 27 via www.otcc.or.th
Mr Sakon said the planned amendment is to ensure clarity and leave no room for interpretation. He insisted it has nothing to do with Charoen Pokphand Group's (CP) acquisition of the Thai business of Tesco earlier this year. (Bangkok Post)
Thailand hotels face long road back
The hotel market in Bangkok was already cooling down late last year, even before the Covid-19 pandemic left thousands of rooms empty, according to statistics compiled by the property services firm Edmund Tie & Company (Thailand).
Both occupancy and average daily room rates of four- and five-star properties in the capital declined year-on-year in the second half of 2019, even as international tourist arrivals headed for a record 39.8 million. Revenue per available room (RevPAR), the key gauge of hotel performance, fell by even more as operators stepped up discount campaigns to attract guests.
The high-end segment of the hotel market in Bangkok is dominated by four-star properties with 59% of all rooms. The number of four-star rooms last year rose by 4% from 2018, while five-star hotel rooms increased by 1.4%.
The largest concentration of hotel supply is in the Sukhumvit area with a 37.1% share of all room supply, followed by the central area at 26%. Total room supply in the Silom-Sathon area accounted for 15.8%, followed by the riverside area at 15%.
During the second half of 2019, hotel room demand was affected by various local and international factors. Given that the world economy was weakening and people were spending more cautiously, some travellers were switching their destinations from Thailand to other countries such as Macau, Vietnam and Laos. (Bangkok Post)
Thailand smartphone sales dip 12%
Smartphone sales in Thailand fell 12.1% in the first quarter with Xiaomi the only vendor recording year-on-year growth, according to global research firm Gartner.
Xiaomi stood at the forefront for Thai market share, while Huawei slipped out of the five top spots for sales, Gartner said.
In the first quarter, smartphone sales in Thailand posted 4.3 million units, a 12.1% drop from 4.8 million in the same period a year earlier.
Xiaomi's market share was 16.2% in the first quarter, the pole position, up from 13% year-on-year.
Its sales grew to 691,000 units in the first quarter, up from 629,000 units in the same period a year earlier. (Bangkok Post)
Thailand approves US$9bil airport project adding new terminal
Thailand's cabinet on Tuesday approved a bid by a consortium led by BTS Group Holdings Pcl for an airport development project worth 290 billion baht (US$9bil). (The Star)
Pandemic exposes flaws in Thailand food supply
An increasing number of farmers are switching to single-crop planting, focusing on cash crops such as rubber. Few grow their own produce, as many opt to rely on the income from their cash crops to buy food.
Not only does this lie in stark contrast to Thailand's ambition to become "the world's kitchen", it also threatens its population's food security, said Biothai Foundation director Witoon Lianchamroon.
"Being the kitchen of the world doesn't mean everyone in the society will be guaranteed access to food," he said.
Mr Witoon said the Covid-19 pandemic has shown just how prone Thailand is to food insecurity, as demonstrated by how easily its centralised supply chain was knocked off balance by the virus outbreak.
The Food and Agriculture Organisation (FAO) has also warned that a protracted pandemic will further disrupt food supply chains and their complex, underlying web of interactions -- which means everyone from consumers, farmers, to middlemen and retailers will be affected. (Bangkok Post)
Thailand work permit holder boost but no news for separated families
The Foreign Ministry has informed Thailand's foreign chambers of commerce that foreigners who have work permits or permission from Thai government agencies will soon be allowed to enter the kingdom. Currently, Thai nationals who wish to return to the country are being accommodated while some particular groups of foreigners such as diplomats or humanitarian workers are also allowed to enter. Foreigners with work permits will be allowed to return once the aviation rules change although spouses and families are not included in the stipulation. (Bangkok Post)
Thailand's Thai Airways halting flights for another month
Thai Airways International (THAI) has decided to halt flights by the airline for another month and maintain salary cuts put in place after the Covid-19 outbreak, according to a THAI source.
The source said the decision was reached after some new board members met for the first time on Friday to keep the national carrier on track for its debt-rehabilitation plan.
Board members agreed commercial flights should be grounded until the end of June, the source said.
Earlier, THAI had been expected to resume flights from June 1. THAI announced the suspension of all international flights and closed its overseas branches in late March when the spread of the coronavirus was intensifying.
Since March, all 20,000 THAI staff have had their salaries cut by 10-50%, and this will continue. (Bangkok Post)
Thailand reopens Pattaya and Koh Lan beaches starting monday
Pattaya will reopen its beaches and the popular offshore destination of Koh Lan from Monday as it eases its lockdown in line with the decline in local coronavirus infections nationwide.
Beachgoers in the resort city in Chon Buri will be able to rent lounge chairs and umbrellas but operators must enforce distancing measures by keeping them at least one metre apart, Mayor Sonthaya Khunplome said on Friday.
The beaches will be closed from Tuesday to Thursday in the second or third weeks of the month, instead of every Wednesday before the lockdown, for clean-up, he added.
The reopening includes beaches in neighbouring Jomtien. (Bangkok Post)
Thailand's low budget airline considering merger
The CEO of Thai AirAsia says it may merge with another low-cost carrier to avoid cutthroat pricing wars once flights resume after the Covid-19 crisis subsides, and has admitted to conversations with other airlines. He says if tourism doesn’t resume by July, TAA will be forced to begin laying off employees, downsizing the company and its fleet to keep its business alive.
Thailand has 7 low-cost carriers which has forced a vicious price-war in the past five years providing cheap flights for people using the carriers in Thailand.
But local low cost carriers have suffered disproportionately over the past few months as the Covid-19 pandemic virtually shut down air travel in Asia and in many countries around the world. The Thai government’s restrictions on international and even domestic air travel have caused TAA serious losses. Some 40% of its revenue previously came from flights passing through Phuket’s airport.
The Thai franchise of Air Asia is losing about 1.2 billion baht per month due to the lockdown. Its 60 aircraft fleet is left stranded at airports according to Tassapon Bijleveld, executive chairman of SET-listed Asia Aviation. (The Thaiger)
Thailand opens market for LNG
Thailand is issuing more liquefied natural gas (LNG) import licences as it attempts to liberalise its gas market and position itself as a regional LNG trading hub.
Thai independent energy producer Gulf Energy has become the second company to secure a licence to import LNG into Thailand. It has been awarded a permit from the country’s Energy Regulatory Commission (ERC) to import 300,000 tonnes per year of LNG to fuel 19 small-scale gas-fired power plants. Its associate company Hin Kong Power – in which Gulf holds a 49% stake alongside Thai power producer Ratch Group – was also granted a licence to import 1.4 million tonnes per year (mtpy) of LNG. This will supply a proposed 1.4GW gas-fired power plant in the country’s central province of Ratchaburi that is expected to start up in 2024-25.
State-backed utility Egat broke state-controlled PTT’s monopoly on LNG imports when it imported its first cargo from Malaysia’s Petronas in December 2019 after becoming the first company to receive an LNG import licence.
Indeed, the approvals are a sign that the government intends to liberalise the country’s gas market and promote Thailand as a free-trade hub for LNG. The ERC is already working with PTT, the national oil and gas group, to create an LNG trading hub. PTT operates the country’s sole 11.5 mtpy Map Ta Phut LNG import terminal. (Energy Voice)
Thailand sex workers left in cold by crisis
Thousands of sex workers have been denied access to relief cash amid the coronavirus outbreak despite their contribution to the once-thriving tourism in dust. Up to 200,000 sex workers in Thailand suddenly lost their jobs when the government ordered the closure of nightlife venues in late March to curb the spread of COVID-19 according to a local UN source.
Ms Suparnee said sex workers are marginalised because many of them do not have access to education or opportunities to seek employment in the formal sector, forcing them into the sex trade. It is even more difficult for migrant and transgender prostitutes to seek community support.
On May 19, CCSA spokesman Taweesilp Visanuyothin said the government will reopen nightlife venues, with adjustments, if the number of new daily cases stays in single digits for the foreseeable future. But Ms Suparnee said when business resumes, sex workers will be put at risk of infection because a vaccine is still unavailable and the nature of their work requires close contact with clients. (Phuket News)
Thailand's Pattaya City unveils plans for nine-kilometre monorail
The Pattaya City administration plans to build a nine-kilometre monorail to ease traffic congestion and connect the city with the government's flagship Eastern Economic Corridor (EEC) project.
Pattaya deputy mayor Manote Nongyai said yesterday while Pattaya has a wealth of potential for economic development, it has been plagued with traffic problems caused by rapid urban growth and lacks an efficient public transport system, particularly in its downtown area which is a key commercial and economic centre.
Pattaya needs to develop a public transport system to facilitate travel across the city, Mr Manote said, adding that a highly efficient system will be in high demand after the Covid-19 crisis eases, which will see an influx of tourists return to the city.
Thailand extends emergency decree for another month
The Thai government’s Centre for COVID-19 Situation Administration (CCSA) resolved to extend the imposition of the executive decree on public administration in emergency situations for another month, Deputy Prime Minister Somkid Jatusripitak said.
He added the extension was set to continue until the end of June as proposed by the Secretary-General of the National Security Council (NSC) to curb COVID-19 and the cabinet would consider the decision on May 26, Thai News Agency (TNA) reported.
Meanwhile, Culture Minister Itthiphol Kunplome said Prime Minister Prayut Chan-o-cha, in his capacity as the CCSA director, expressed his concern about the planned opening of schools during the COVID-19 crisis and cited the disease was spreading at reopened schools in France and South Korea.
He said CCSA discussed the timeline for the next relaxation of business and activity lockdowns to stimulate the economy but it had not considered new curfew hours yet. The NSC would first reconsider the night-time curfew, said Itthiphol.
Output Thailand car industry lowest in 30 years
As late as last year, the automotive industry in Thailand was the largest in Southeast Asia and the twelfth largest in the world, with an annual output of around 2 million vehicles. But in April this year, Thailand’s car production hit its lowest level in 30 years – just 24,711 units – amid weak global demand, factory shutdowns and widespread layoffs. The industry may not even reach the 1 million unit threshold this year, a 50% decrease from 2019, according to the Federation of Thai Industries.
A spokesman for the FTI’s Automotive Club says if the pandemic is not ‘controlled’ by June, the industry could suffer far longer as the global economy and purchasing power continue to sag. (Thaiger)
Thailand government savings bonds sold out in a week
The government has sold 50 billion baht of savings bonds in a week as it seeks to finance steps to mitigate the fallout of the coronavirus outbreak, the finance ministry said on Thursday.
The so-called "Thailand stays strong" bonds, offered on May 14, have 5- and 10-year maturities, with an average stepped coupon of 2.4% and 3.0% per year, respectively.
The bonds are part of a government plan to borrow 1 trillion baht for economic measures to combat the outbreak. (Bangkok Post)
Thailand Central Bank cuts key rate again
The Bank of Thailand cut its policy rate by 25 basis points to a record low of 0.50% on Wednesday, to help soften the economic impact of the pandemic and social distancing measures.
The central bank's Monetary Policy Committee (MPC) voted 4-3 at Wednesday's meeting to lower the one-day repurchase rate, with the three dissenters preferring a steady rate.
It was the fifth cut since August last year. The MPC had kept the rate steady at its last meeting after a 25-basis-point cut at an emergency meeting on March 20. (Bangkok Post)
Thailand extends ban on international travel
The Civil Aviation Authority of Thailand has today announced an extension of their current ban on international travel another month, until at least the end of June, 2020.
The current ban on scheduled international flights was extended last month to cover May, up to May 31. But now the CAAT have announced the extension for at least another month. There was no specific reason given for the extension beyond the government’s narrative of “protecting Thailand from further outbreaks of Covid-19”.
So the earliest any foreigners will be able to fly into Thailand will be at least July, assuming the ban isn’t extended further. There are still 1000s of Thais waiting to repatriate and it could take at least another month to get them all back with expensive chartered flights and onerous paperwork required before they can return. (The Thaiger)
Thai Airways closer to restructuring via bankruptcy
Thai Airways International Plc is a step closer to restructuring via a bankruptcy court after a key government panel backed the plan, which is due for consideration by the Cabinet on Tuesday. The State Enterprise Policy Committee that oversees policies for state-run enterprises agreed that the airline should seek such a rehabilitation, government spokeswoman Narumon Pinyosinwat told reporters on Monday. THAI, majority owned by the Finance Ministry, has outstanding debt of about 92 billion baht of which approximately 78% is owed to bond investors, according to data compiled by Bloomberg. Tris Rating Co, which is partly owned by S&P Global Ratings, said in a statement that the fact officials are considering filing for bankruptcy restructuring “has eroded our confidence that necessary actions from the government will be taken to enable THAI to meet all of its obligations in a timely manner.” (Bangkok Post)
Thai banks expected to post strong loan growth
Commercial banks are expected to post strong loan growth this year, as more large businesses are seeking credit due to the volatile debt market amid the coronavirus outbreak, a senior director at the Bank of Thailand (BoT) said on Monday. Loans grew 4.1% in the first quarter of this year, compared with 2% in the whole of 2019, Director Tharith Panpiemraas told a briefing. But he did not give a specific forecast. Non-performing loans (NPLs) are likely to rise further this year, reflecting the slowing economy, he said. NPLs stood at 3.05% of total lending at the end of March, up from 2.98% at the end of last year, Mr Tharith said. (Bangkok Post)
Industry Executive urgest government to join CPTPP
Kriangkrai Thiannukul is the Vice President of the Federation of Thai Industries which has been monitoring the country’s export-led economic base since the start of this year as the impact of the coronavirus related crisis has deepened. He says Thailand should join the 11 member CPTPP pact and bolster its trade access as a priority as the kingdom’s export-led economy faces a long and difficult recovery from the devastating Covid 19 virus. (thaiexaminer.com)
Shopping malls and restaurants in shopping centres are among businesses allowed to reopen on Sunday, and curfew hours will be shortened by one hour to 11pm.
Taweesilp Visanuyothin, spokesman for the Centre for Covid-19 Situation Administration (CCSA), said on Friday that shopping centres, malls and restaurants inside the buildings will be allowed to resume business nationwide from Sunday.
Convention centres, wholesale markets and swimming pools will also be allowed to reopen, he said.
Shopping centres will have to close at 8pm, to give people sufficient time to return home in time for the night curfew. (Bangkok Post)
The Centre for Covid-19 Situation Administration has been consulting with the private and public sector to make the next move as Thailand reboots its economy in a second phase of re-openings. The Thai cabinet will meet today to discuss the proposals.
Dr. Taweesin Visanuyothin says no final decisions have been made at this stage but hinted that many retail, wholesale and leisure activities would be likely to resume this Sunday, May 17.
The provisional list includes shopping malls, community malls, bowling alleys, fitness clubs, amusement parks, beauty salons offering hair-curling and dyeing services as well as nail services, eateries in office buildings, beauty clinics, weight loss clinics, out-door team sport events (but no spectators), public gardens, galleries and Thai foot massage parlours.
But not movie theatres at this stage. Or beaches. (The Thaiger)
Phuket, Thailand's tourist island, is seeking permission from Bangkok to reopen the airport, ports and permanent road access to the mainland after several days with no new Covid-19 infections detected. Provincial governor Phakaphong Tavipatana said on Wednesday the province will ask the Civil Aviation Authority of Thailand (CAAT) for approval to reopen the airport on Saturday. The current lockdown period ends at midnight on Friday. The CAAT has ordered the airport closed since April 3 to restrict air travel as health authorities nationwide battled to contain the spread of the coronavirus disease. Three airlines have notified the province of their plans to resume limited domestic passenger services to Phuket, at one flight a day, Mr Phakaphong said. Provincial authorities on Wednesday also agreed to ask the Interior Ministry to allow re-opening of all sea and road links from Saturday. (Bangkok Post)
Due to the global crisis caused by the COVID-19 pandemic, the Thai government has implemented a number of important initiatives aimed at supporting the Thai economy and affected industries. As part of these initiatives, the Ministry of Finance of Thailand has enacted several important short term and medium term tax relief measures to support individual and corporate entities in Thailand, to ease the hardships faced by many during these uncertain times. Set out below is a summary of these measures. Read more on ITR.
New taxation filling and payment due dates:
The mass exodus of people exiting Phuket has renewed fears of a resurgence of Covid-19 infections after four new infections were found on the island on Sunday, prompting the government to ramp up disease control measures to screen returnees heading to their homes from the island province.
The coronavirus outbreak has forced the closure of all tourism-related businesses in Phuket, putting numerous workers out of work. Those who wanted to return to their home provinces were until recently unable to do so due to restrictions imposed on inter-provincial travel during the lockdown.
However, Phuket remains under close watch because between 10,000-20,000 people have left since the nationwide lockdown was eased on May 3, Taweesilp Visanuyothin, spokesman of the Centre for Covid-19 Situation Administration (CCSA), said on Sunday. (Bangkok Post)
A 400-billion-baht borrowing plan intended for economic and social rehabilitation after the pandemic to strengthen the domestic economy will be added to the cabinet's agenda next week, with the first batch expected to be doled out later this month.Rehabilitating the farming sector is crucial to build up the local economy as a buffer against the export and tourism sectors' fluctuations, especially as they have been adversely affected by the virus, said Deputy Prime Minister Somkid Jatusripitak.
Last month the cabinet approved a royal decree to borrow 1 trillion baht, of which 600 billion is for financial aid and health-related plans for those whose jobs and businesses have been upended during the outbreak. The remaining 400 billion baht is for economic and social rehabilitation through projects aimed at creating jobs, strengthening communities and building infrastructure.
Amid the coronavirus crisis, Thailand's cabinet on Tuesday approved 4.75 billion baht (US$146.6m) in funding to finance the deployment of a cloud service for use by government agencies. The Government Data Center and Cloud (GDCC) service will be used as a central cloud system to ensure the safety of government data, and will also serve as a backup in the event of disasters. While there is no mention of where it will be hosted, it is understood that the GDCC will be operated by the National Digital Economy and Society Commission together with state-owned CAT Telecom. The government says it expects to save 5 billion baht from reduced spending on public cloud services. Indeed, state agencies will no longer be allowed to budget for public cloud services from fiscal year 2021. (datacenterdynamics)
The Asia Times published an article suggesting Thailand's top 'five conglomerates' stand to profit from the COVID-19 crisis. "PM Prayut calls on billionaire class to save a sinking economy but small business pain will be the 'big five's' post-pandemic gain." As Thailand loosens its lockdown, it’s not clear how many of its small and medium enterprises (SMEs) will ever re-emerge from the viral devastation. Thailand’s top “five family” conglomerates, on the other hand, are cashed up to seek opportunities in crisis across the nation’s now cash-starved and indebted corporate landscape, analysts say.
Last week the Finance Ministry agreed to guarantee a 54 billion baht bailout loan for the ailing airline and a further 80 billion baht recovery loan – both massive amounts of money being given to an airline that has been in debt for the last decade. PM Prayut Chan-o-cha says the State Enterprise Policy Office was responsible for caveats on the loans and the restructuring required. Thai Airways is 51% owned by the Thai government. He didn’t mince his words and made it clear that the current raft of bailouts will be the last. “This is the last time that Thai Airways will receive support from the government. If the situation worsens, there will be a complete structural overhaul of the airline.” (The Thaiger)
Stores that fail to enforce disease control measures will be closed, Deputy Prime Minister Wissanu Krea-ngam warned on Tuesday after people crowded into shops to buy alcoholic drinks following the lifting of the ban in most provinces. If shops selling alcoholic beverages failed to properly control the behaviour of customers, they could be closed. Some restaurants in Bangkok that failed to comply with disease control measures had already been closed after being allowed to reopen under strict conditions. (Bangkok Post)
The coronavirus outbreak casts a shadow over the future of approximately 300,000 soon-to-be graduates this year. The bleak prospect of unemployment and layoffs as the economy staggers back to growth is expected to persist for at least two years. Minister of Higher Education, Science, Research and Innovation Suvit Maesincee said the government is preparing to create jobs for the unemployed in the aftermath of the coronavirus outbreak. Among these groups are about 500,000 jobless graduates who have yet to find work since they finished their education and up to 300,000 new graduates who will enter the job market this year, Mr Suvit said. If some people in the workforce are to be laid off afterwards, the number could reach about one million. (Bangkok Post)
- EMEx classifies Thailand's 'lockdown' as Medium
In a surprise turn-around, after extending the national alcohol ban from yesterday for another month, the CSSA have announced that they are revoking the national ban on alcohol sales from this Sunday. But the provisions say that the alcohol can only be bought and must be taken away for consumption at home. You may not consume alcohol at restaurants. There will be further clarification in the next day about precise details. (The Thaiger)
Here is a quick list of some of the services that can re-open from tomorrow (May 3):
• Hotels, airports, train and bus stations, hospitals, eateries and street vendors, with the exception of bars and pubs, can sell food and beverage but on a take-home basis. If these venues want to seat patrons then they must put social-distancing measures in place.
• Small wholesale and retail shops, markets, food markets and flea markets can open, but are required to check the temperature of visitors at the entrance.
• Hairdressers can provide washing and cutting services, but no patrons are allowed to wait for their turn inside.
• Golf courses can be and tennis courts can beopened, but no mass gatherings or team competitions allowed.
• Public parks can only open their outdoor sections for walking, running, cycling or exercising – no gatherings for competitions, plays or shows are allowed.
• Pet care shops that provide grooming and nursing services have to strictly follow the government’s hygiene measures.
Although some businesses will be allowed to reopen in some locations as of Sunday, a government spokesman has today confirmed that the ban on alcohol sales will remain in place until further notice. While there is no national order banning alcohol sales, all 77 provinces have done so and have now been ordered by PM Prayut Chan-ocha to keep all current restrictions in place.
The sales ban will remain in place ‘until further notice’, according to Ministry of Foreign Affairs deputy spokesperson Natapanu Nopakun. The announcement was made during and English language press briefing.
He says the businesses allowed to to open from May 3 include.
- Markets, including fresh markets, flea markets and walking streets
- Restaurants, cafes, dessert joints, local “mom and pop shops”
- Retails shops, IT shops, convenience stores and small local stores outside of malls
- Recreation areas; public parks can open but no team sports will be allowed and large gatherings are prohibited. Golf and tennis is allowed.
- Pet grooming and pet nurseries
The latest executive order, signed by PM Prayut Chan-o-cha, stipulates that all measures in place under the emergency decree are to be extended until May 31. Although there has been discussion of the individual provincial governors deciding whether or not to ease some of the restrictions in place in their jurisdictions, this latest development looks like it may prevent any such moves. (The Thaiger)
Nine commercial banks have sought liquidity support worth a total of 56 billion baht for their purchases of mutual fund units through the Bank of Thailand's Mutual Fund Liquidity Facility (MFLF) as of April 24, according to central bank data. The MFLF has already provided assistance to 30 mutual funds over the same period, the Bank of Thailand said. (Bangkok Post)
Thai Airways International (THAI) will borrow money to survive the coronavirus crisis, and will remain a state enterprise, the Finance Ministry announced on Wednesday. Permanent secretary Prasong Poontaneat said a meeting of the State Enterprise Policy Commission, chaired by Prime Minister Prayut Chan-o-cha, on Wednesday agreed on the need to save the national flag carrier. The national carrier posted a net loss of 2.11 billion baht in 2017, which widened to 11.6 billion baht in 2018 and 12 billion baht last year, according to Stock Exchange of Thailand (SET) data. (Bangkok Post)
Moody's Investors Service has revised the outlook for 10 Thai banks to stable from positive, with asset quality and profitability poised to weaken because of the coronavirus crisis. But the international rating agency affirmed the banks' long-term deposit ratings and their long-term senior unsecured debt ratings and issuer ratings. "Moody's expects that the operating environment for the Thai banks will deteriorate in the next 12-18 months due to disruptions from the coronavirus outbreak, and this will lead to a weakening of banks' asset quality and profitability," it said. (Bangkok Post)
Thailand's tourism sector has been crushed by the COVID-19 pandemic. The number of visitors dropped 76.4% in March compared to last year after a 42.8% drop in February. Thailand's tourism sector represents 12%-14% of GDP and has put at least a million of oturism workers out of work. Regardless, infection rates in Thailand are flattening since early April and that might result into the easing of some rules under the national state of emergency. Like China, Thailand's tourism recovery trajectory is expected to be centered first around domestic and local corporate travel before regional and international travels resume. When borders open and international travel bans are lifted, China will almost certainly resume its dominant role in Thailand’s inbound tourism sector. How this major feeder market for Thailand (and many destinations around the world), is expected to begin travelling again will offer strategies for those suffering through today’s crisis. Findings by Chinese travel giant Trip.com have long ranked Thailand among the first outbound destinations Chinese travelers want to visit post-coronavirus. Of those surveyed, 71% said they’d like to travel to Thailand and, in a notable shift, 83% would choose independent travel over group tours. With the Chinese government’s ban on outbound group travel still in place, the independent traveller segment will be the driving force of China’s outbound travel market, when travel bans, at both ends, start being lifted.
Thailand’s Suvarnabhumi Airport in Bangkok will be reopened for domestic flights from May 1, after being closed since the state of emergency was declared a month ago due to COVID-19 measures, according to the Civil Aviation Authority of Thailand. When flights resume, airport officials have advised the public that all proper hygiene steps have been taken to make sure that the COVID-19 virus is properly taken care of. They also advised that during the closure, the airport has undergone extensive repairs to both the terminal and the runway. (Bangkok Post)
William (Bill) Heinecke is an American-born Thai businessman who is currently the CEO and Chairman of Minor Corporation, Minor International and the Chairman of Minor Food Group. Heinecke founded Minor International Plc which serves as a hospitality group. In an interview he calls the ongoing pandemic the worst economic crisis his group of companies ever faced after going through the Asian and global financial crisis, SARS, and military coups as well. Thousands of workers have been furloughed and a majority of its 530 properties around the world are closed. Some are still open but used as hospitals. The Thai-American tycoon believes the travel branch will be changed after this. Hygiene and health standards will become more important raising costs to deliver cleaner rooms, beds and foods. Heinecke also expects that countries such as China and South Korea will rebound quicker than Europe and the United States but domestic tourism will have the upper hand. Operations in China are now showing early signs of revival.
Thai beaches are empty and that means more space for animals. One of those animal is the leatherback turtle. The highest number has been counted in the last 20 years. Since november, 11 nests have been found which is good news since the leatherback turtle is rare and since no nests have been counter over the last 5 years on Thai beaches.
CNA warns in an opinion piece for the latest plans of Thailand's prime Minister:
Thailand's new plan to kickstart the economy will involve the country's billionaires. Prime Minister Prayut has asked the 20 richest tycoons to kickstart the economy by proposing projects to support Thai livelihoods and to undertake those projects with their own company's resources. Thai people reacted furiously on social media for two reasons. First they see it as a faillure of the government they cant deal with the economic impact themselves and need outsiders to take the lead. The second reason to criticize the prime minister's plan is widespread doubt tycoons will act in the public good. Many of the 20 wealthiest Thai have enjoyed a golden time since Prayut seized power in 2014 as head of the National Council for Peace and Order (NCPO) military government. The bigger conglomerates have reached virtual monopolies in Thailand's economic landscape because of measures undertaken by the government.
- The NCPO has introduced the Pracharat initiative which is designed to entrench the power of large firms in various economic sectors. In partnership with the state, the initiative called for those firms to forge a regime that Thai scholars have labelled "hierarchical capitalism". It gave license to major metropolitan conglomerates to organise and dominate small businesses, above all in provincial Thailand. Those conglomerates would in effect integrate provincial undertakings into their operations and subordinate them to their own interests. The initiative sought to introduce such hierarchies into sectors as diverse as agriculture and tourism.
- Similarly, the NCPO’s legally binding 2018-2037 National Strategy also lays a foundation for big business’s domination of a subordinated and politically neutered Thai countryside. It presents a vision of provincial society made up of depoliticised “communities”, rather than of voters who turn to political parties as vehicles for the expression of their interests or of dissent against the prevailing economic order. The National Strategy proposes a restructuring of the countryside to open up commercial opportunities ready for big business and its allies to exploit but beyond the practical reach of most provincial enterprises. In this regard it complements the Pracharat initiative like hand and glove.
The government of Thailand estimates that the tourism sector could face a 60% contraction in 2020. Foreign tourist arrivals slumped with 76.4% in March compared to a year earlier. This follows a 42.8% drop the previous month. The numbers for March are worse than predicted. Spending by tourists in March fell even farther with 77.6% year on year. Visitors from China dropped 92.4% while usually the biggest source of foreign visitors. Tourism represented about 16% of Thailand's GDP in 2019.
The cabinet has formally accepted the energy authorities' decision to either waive or cut electricity charges for 22 million households where people are working at home because of the coronavirus disease. Energy Minister Sontirat Sontijirawong said after the cabinet meeting on Tuesday that the ministers acknowledged the step taken by from the Energy Regulatory Commission, the Electricity Generating Authority of Thailand, the Metropolitan Electricity Authority and the Provincial Electricity Authority. The measure would be valid for three months, from March to May, and cover 22 million households. It would cost the state 23.68 billion baht in lost revenue, he said. "The measure reduces the electricity charges burden on households. It is the cost of living of the people who are working from home to support the government's control of Covid-19," Mr Sontirat said. The business sector also wants similar assistance. He said their requests were being considered. Free electricity is extended to households with a power meter of no more than 5 amps. Up to 10 million households are expected to benefit. For households with a power meter over 5 amps, if their consumption does not exceed 800 units (kilowat hours), they will pay as much as they did in their February bill. The number over 800 units will be subject to a 50% discount. Large houses that consume more than 3,000 units will get a 30% discount. (Bangkok Post)
Last night in a special 10 minute broadcast on national TV, Prime Minister Prayut Chan-o-cha announced that he will write an open letter to Thailand’s top 20 richest people to seek their assistance and help for the government and Thai citizens in the fight against the Covid-19 pandemic. He explained that he’s doing it to gather their input and ideas to ease the impact on the economy and seeking their advice as next week the government wants to finalise planning to relaunch and reboot the Thai economy. Though the PM did not mention the top richest of Thailand by name, they include CP’s Chearavanont family, Charoen Sirivadhanabhakdi, the Chirathiwat family, Gulf Energy Development’s CEO Sarath Ratanavadi, Bangkok Dusit Medical Services and Bangkok Airways founder Prasert Prasarttong-Osoth, the Osathanugrah family, and BTS Group Holdings chairman Keeree Kanjanapas. (The Thaiger)
On April 8, 2020, the Thai government granted visa extensions for foreigners unable to leave the country, due to the closure of the country’s borders under the COVID-19 state of emergency status. The country had temporarily closed its nine border checkpoints on March 22, 2020 – in a move to prevent the spread of the virus. All the access points, whether by land, sea, and air, are closed until April 30 with provinces also ordering their own shutdowns and restrictions. Foreign visitors are effectively banned from entering the country with only members of diplomatic missions and holders of work permits able to enter. Thai nationals wishing to return from overseas must present fit-to-fly health certificates. The country has also suspended the issuance of visa-on-arrival until September 30, 2020, and national carrier Thai Airways has cancelled most flights to Europe and the Asia Pacific until May. Visitors (mostly migrant workers) from neighboring countries that hold a temporary border pass issued on March 23, 2020, and after, will be allowed to stay in Thailand until November 30, 2020, or when the border reopens. An estimated four to five million migrants are employed in Thailand from neighboring countries, namely Cambodia, Vietnam, Lao DPR, and Myanmar. Foreign visitors whose visas have expired on March 26, 2020, or thereafter, will receive automatic visa extensions until April 30 of the same year. This is also applicable for those whose expiry date falls between March 26 and April 30, 2020. Foreigners holding resident visas and are currently overseas can return to Thailand if they present fit-to-fly health certificates. If they are unable to return to the country, the government will automatically extend their deadline for compulsory return – holders of this visa type are allowed to be overseas for only one year from their date of departure. (ASEAN Report)
Thailand is seeing a rush of people trying to sell their gold after the gold price hit a 7-year high locally. All over the country, including in Bangkok, people lined up to sell their gold. Another contributing factor is that many Thai need money during the COVID-19 crisis. Gold shops, fearing to run out of cash, were so concerned that Thailand Prime Minister Prayuth Chan-Ocha had to ask Thai citizens to sell gradually. Buying up gold is a popular way to save in Thailand.
Thailand's ban on incoming passenger flights is extended until the end of April. The measures have serious impact on the country's tourism sector.
The Thai Chamber of Commerce fears the COVID-19 crisis might result in 10 million job losses if the outbreak continues for a few months. The chamber estimates 7 million jobs are already lost. Thailand has a workforce of about 38 million and wants to propose measures to the government like soft loans, tax breaks and financial support to save jobs.
The Thai government has banned the sale of alcoholic beverages to curb irresponsible socializing. It is a new tact during this COVID-19 crisis. While bars are already closed, some provinces including Bangkok, are outlawing the sale of beer wine and spirits. Bangkok's ban started on Friday 11 April and lasts until Monday 20 April.
A hospital in Thailand takes extraordinary measures to protect babies. Newborns receive special place face shields to protect them from contamination. They are designed to stop any droplet reaching the baby's face.
The Japan Times reports how Thai Prime Minister Prayut Chan-ocha, who got his position after a coup, has enmassed emergency powers to combat the virus but also pinning his political fate to the response. In Thailand discontent with the government is growining. The Prime Minister approved this week a $58b stimulus package to mitigate the economic fallout after earlier efforts were described as insufficient. He also imposed a state of emergency through April banning mass gatherings. The lockdown gives the Thai leader an opportunity to show his leadership capabilities and prove himself. The outlook for Thailand is among the most challenging with a deep recession expected as tourism and exports slump. A lot of criticism was also directed towards the government and ministries who didnt seem able to work together. With the Prime Minister directly in power that problem must be overcome. If Prayut is not able to deliver, the recession might severely hurt Thailand's middle class and cause political instability.
Thailand has approved a plan allowing all foreigners who entered legally to receive automatic visa extentions. The authorities want to prevent long queues at immigration centres. The crowded immigration centres are a potential hotspot for the virus to spread. The visa extension has been granted until Thursday 30 April.
Three major Thai companies are joining hands to help people infected with the virus. AIA Thailand, True Digital Group and SAMITIVEJ have launched a virtual COVID-19 clinic.. It is a special teleconsultation service tailored to those who show symptoms or at high risk of getting it. The consultation is free of charge and available 24/7. The companies say that the virus is causing a lot of anxiety and the consulting service helps people answering the questions they might have now.
Thailand's government has approved on Tuesday a package of economic measures worth 1.9 trillion baht ($58 billion) to alleviate the consequences of the coronavirus outbreak on Southeast Asia's second-largest economy, the finance minister said. The package includes a law to borrow 1 trillion baht plus central bank measures worth another 900 billion baht in soft loans and support for corporate bonds, Uttama Savanayana told a news conference. Thailand has confirmed 2,258 cases and 27 deaths since the outbreak began in January. (The Star)
Thailand focuses heavily on local food productivity, covering both agricultural products and processed foods, in order to combat the COVID-19 spread. The state of emergency allowed the government to implement a curfew. Bangkok, the capital, is placed under a soft lockdown. Takeaways from all eateries will still be allowed and supermarkets and markets may continue operations. The ministry of agriculture and co-operatives is closely tracking agricultural production to prevent any shortages. Even in the case of a lockdown, there won't be a shortage at this stage for three months, six months, or even one year. The Ministry of Agriculture also plans to support the local fruit industry by promoting and encouraging its consumption. The Ministry of Commerce has set up seven war rooms early April working together with the relevant industries and government departments to ensure supply of necessities. It focuses on rice, fruits and vegetables, and processed foods. Also livestock, medical supplies, logistics and delivery, and animal feeds are priorities. The government is also batteling panic-buying. Hoarding became so serious that the Ministry of Agriculture issued extra notices to assure the public that there were sufficient products. Especially egg-hoarding has proven to be a problem in Thailand forcing the country to suspend export in order to protect sufficient supply of the commodity in Thailand.
There has been much criticism in Thailand how the government is handeling the spread of COVID-19. Thailand was late in declaring a state of emergency allowing the virus to spread within its own borders. An opinion survey by Suan Dusit Rajabhat University carried out online asked how sure participants felt that the government would be able to containt the outbreak. Only 37.48% said they were confident with 7.76% very confident and 28.72% somewhat confident. About 62.52% said they had little or no confidence with 40.18% they they had little confidence and 22.34% no confidence at all. Asked whether they were satisfied with the government's handling of the situation, 46.88% said they were satisfied while 53.12% were not. (Bangkok Post)
Bangkok Post: The Thai government has unveiled a fresh stimulus package worth 1.68 trillion baht, with plans to issue a set of executive decrees to implement the measure to cushion the blow from the coronavirus outbreak. The latest stimulus package totals 10% of gross domestic product, and will be funded by new borrowing and reallocation of the existing budget. The package will be tabled for approval in a cabinet meeting on Tuesday, Deputy Prime Minister Somkid Jatusripitak said after a special cabinet meeting yesterday. Mr Somkid said that at yesterday's meeting, it had been agreed in principle that three executive decrees will be issued to implement the stimulus package. One of the decrees is to empower the Bank of Thailand to provide soft loans to help small- and medium-sized enterprises -- akin to what was done in 2012 after massive floods hit the country. The package is needed to keep economic mechanisms running without problems, said the deputy prime minister.
Thailand has blocked all international arrivals starting Thursday 2 April until Wednesday 15 April. All arrivals, including Thais, have to be slowed down according to Prime Minister Prayut Chan-o-cha. In the meantime all agencies will prepare that all returning Thai will be quarantined and get proper medical checks.
Thailand and its State Railway of Thailand (SRT) company have suspended on Wednesday 1 April all of its 44 commercial trains. Many provinces are now locked down so it doesn't make sense to keep them running according to SRT's acting government. Earlier booked train tickets are fully refunded.
Campaigners are calling out for elephants in Thailand. The tourism industry is making extensive use of the animal in elephant camps, some humane but many not, but they are now out of clients. The sector is in distress and many elephants are in chains and hungry. The campaigners are warning that elephants may starve or be sold to zoos or illegal logging companies. The tourism sector was already notorious for its abusive way regarding elephants who need 300 kilogrammes of food a day to survive. Elephant camps and conservationists are warning that the threat of hunger and renewed misuse of the animal are ahead without a bailout. Many animals are living on restricted diets a the moment.
About 20 million Thai have registered for COVID-19 financial aid within 48 hours. That is seven times the number estimated by the authorities. The handout, about $150 USD per person per month for three months starting in April was intended for about 3 million temprary employees, contract employees, and self-employed who are not covered by insurance or don't have acces to the social security system. Due to the high number it might now take longer before someone gets his money because they have to go through a screening process as well. If all applicants are approved, which is highly unlikely, the government would need over $9m USD. It is unclear where the budget is coming from. The government has mentioned the possibility of an emergency borrowing. Thailand's public debt is at 41.3% of GDP and the limit is 60%. (Bangkok Post)
Several banks have announced to close down Saturday and Sunday. Large queues appeared when the government announced to financially support the self-employed through these challenging times. Commercial banks that made the announcements as of Saturday morning are Bangkok Bank, Kasikornbank, Siam Commercial Bank, Bank of Ayudhya, TMB Bank, Thanachart Bank, UOB, Kiatnakin, LH Bank and CIMB Thai. The state-owned GH Bank also closed on Saturday. Three other state banks made the same announcements earlier. They were the Government Savings Bank (GSB), Krungthai Bank and the Bank for Agriculture and Agricultural Cooperatives. Clients are encouraged to use electronic transactions and mobile apps during the closures. (Bangkok Post)
In the fight to guarantee food reserves, the Thailand government has announced to ban the export of eggs. The ban is initially for seven days. Thailand produces about 40 million chicken eggs daily which is sufficient for domestic demand. (Bangkok Post)
The Thai currency the baht is tumbling fast. The Bank of Thailand has cut interest rates to counter the impact of the COVID-19 crisis. Friday night Thailand saw an emergency rate cut. The new measures are a further blow for the baht, which has already slipped over 9% this year. This all comes together with slowing economic growth and the worst drought in decades. The delay in the government's budget due to political infighting didnt help as well. (The Thaiger)
Finance Minister Uttama Savanayana plans to issue an emergency decree of his own to try and save the economy from freefall. The news comes after the Bank of Thailand announced that Thailand's economy will contract with 5.3% according to its forecasts. (Nation Thailand)
The government of Thailand has easened its travel restrictions temporarily for transit passengers who try to get back home. The government recognizes that many travelers are blocked if they cannot go through Bangkok Airport. The heavy travel restrictions asking for clear health certificates and an expensive insurance are still in force but won't apply for those passengers till Monday 30 March. Passengers do still need a fit-to-fly certificate.
Prime Minister Prayut Chan-o-cha has announced an emergency decree starting Tuesday 26 March till Thursday 30 April. Foreigners will be banned from entering the country at all entry points. Only shippers, diplomats, drivers, pilots and others are exempted. Thais stranded in other countries will be allowed to return. People under 5 and over 70 are encouraged to stay at home. Public gatherings are banned. All shops selling food and essential consumer goods are allowed to stay open.
Starting Thursday 26 March, Thailand will initiate an emergency decree said Prime Minister Prayut Chan-o-cha. It will make it easier for the government to impose curfews, prohibiting travels, and evacuations.
The Federal Reserve said it would buy as much government-backed debt as needed to soothe fraught markets and unrolled a series of programmes meant to shore up both large and small businesses, unveiling a whatever-it-takes effort to cushion the brutal economic blow of coronavirus. The central bank, which restarted its massive bond-buying programme eight days ago, said it would expand it well beyond the $700 billion in Treasury and $200 billion in mortgage-backed securities that it had initially placed on those purchases. (Bangkok Post)
Bangkok, the capital of Thailand, has decided to temporarily close all shopping centers starting Sunday 22 March to Sunday 12 April. Supermarkets remain open but that didn't prevent locals from panic buying.
All establishments that have been closed till 12 April:
- Spa, health and massage parlours
- Weight loss clinics
- Skating and roller blade rings
- Beauty salons
- Bowling alleys
- Theme parks
- Golf courses & driving ranges
- Public swimming pools
- Tattoo parlours
- Cock-fight rings
- Conference facilities
- Exhibition halls
- Amulet trading grounds
- Markets (excluding markets that offer fresh food, vegetables and food stalls)
- All shopping malls (excluding the supermarket section)
- All public and private educational institutions
Buriram province, the first of 76 provinces in Thailand, has ordered a partial lockdown. The province, east of Bangkok and on the border with Cambodia, ordered all visitors regardless of nationality to be screened upon arrival. Non-resident also have to register so they can be traced. Group activities such as seminars, conferences, ceremonies, summer courses for students, ordinations of novices and markets (other than food markets), where more than 50 people are exted to gather, will be cancelled or postponed. (The Thaiger)
Thai Lion Air is starting to suspend operations starting Wednesday 25 March. (Bangkok Post)
The government of Thailand will extend to all nationalities the order obliging visitors to show medical certificates and health insurance, starting Sunday 22 March. The health certificates must be issued no more than 72 hours before travelling. The health insurance must show minimum coverage for the corona virus of not less than US$100,000. The responsible minister admitted that this was measure was implemented to keep visitors away from Thailand for the time being. This means Thailand can hardly be used as a transit hub. The government also announced to close borders but didn't specify them. (Bangkok Post)
- EMEx classifies Thailand 'travel restrictions' as Severe because visitors of all nationalities are heavily affected
- Click here for full update on latest Thai travel measures.
Thailand has announced the widespread closure of schools, business and entertainment venues. The prime minister announced that Songkran, a festival to mark the Thai new year, has been postponed. (New York Times)
- EMEx classifies Thailand 'lockdown' as Severe because measures are nationwide and are having a significant impact on public life
Thailand announced detailed measures for incoming travelers. Incoming visitors will be placed in one of three categories depending on their place of origin and health status.
- Click here for full update on latest Thai travel measures
Philippines Metro Manila stays under GCQ, Cebu City reverts to strictest ECQ
The general community quarantine in Metro Manila will be extended, while restrictions will be tightened in Cebu City as it is placed under enhanced community quarantine from June 16 to 30, Presidential Spokesperson Harry Roque said on Monday.
President Rodrigo Duterte issued the new directives after he approved the recommendation of the COVID-19 national task force. (CNN Philippines)
Philippines GDP to contract 1.9% in 2020: World Bank
The Philippine economy will likely contract by 1.9% this year, weighed down by the impact of a local volcanic eruption and the coronavirus pandemic, the World Bank said on Tuesday.
It would be the country's first annual decline in gross domestic product since the Asian financial crisis, Rong Qian, senior economist at the World Bank, told a news conference.
But GDP would likely recover in 2021 as economic activity resumes following strict quarantine measures that caused the economy to grind to a halt in mid-March, she said. (Bangkok Post)
Philippines new round of big-time oil price hikes next week
Motorists will have to cope with a new round of big-time hikes in pump prices this coming week at the scale of P1.70 to P1.90 per liter for gasoline products; and P0.90 to P1.10 per liter for diesel products.
For kerosene products that are essential not just for Filipino households but also as a base fuel for industries such as aviation, this is anticipated to go up by P0.80 to P0.95 per liter.
The calculated adjustments do not include yet the price increases that will be imposed based on the hiked 10-percent duty on imported crude and finished petroleum products.
Executive Order No. 113 issued by President Rodrigo last month stipulated that the higher import duty shall be enforced while the Bayanihan to Heal as One Act is still in effect; or for it to become a temporarily policy over a period of six months or until December this year.
But given that the COVID-19 response law of the country has already lapsed, policymakers from the Department of Energy and National Economic and Development Authority, have yet to signal if the import duty escalation would have to be terminated within an earlier timeframe. (Manila Bulletin)
Philippines reports 7.3 million Filipinos jobless in April amid COVID-19 pandemic
The COVID-19 pandemic rendered more Filipinos jobless, with the Philippine Statistics Authority reporting 7.3 million unemployed adults in April.
The PSA reported Friday a 17.7 percent unemployment rate, an all-time high. The figure rose from 5.3 percent in January and 5.1 percent a year ago, which meant an additional 5 million people without work.
"This is a record high in the unemployment rate reflecting the effects of the economic shutdown to the Philippine labor market due to COVID-19," National Statistician Claire Dennis Mapa said. Two-thirds of the unemployed are males while the rest are females.
Two-thirds of laborers in the country depend on salaries and wages, while 28.7 percent are considered self-employed, rendering professional services or operating their own businesses.
PSA data also showed that 13 million Filipinos had jobs but were not able to report to work, representing 38.4 percent. Nearly all of them attributed this disruption to COVID-19 regulations. (CNN Philippines)
Philippines COVID-19 task force eases ban on religious gatherings in MGCQ areas
More people are now allowed to join religious gatherings in areas under modified general community quarantine, Palace said on Thursday.
Presidential spokesperson Harry Roque said the Inter-Agency Task Force for the Management of Emerging Infectious Diseases approved Resolution No. 43 on Wednesday, allowing 50 percent seating capacity in religious gatherings in MGCQ areas. (CNN Philippines)
Philippines focuses on rice stocks investments
Vietnam assured it will deliver 400,000 metric tons of rice to the Philippines after it decided to resume exports to Southeast Asian countries starting May 1. The Philippines also sent notices to Cambodia, India, Myanmar, Thailand, and Vietnam for its plan to import 300,000 metric tons of rice via a government-to-government transcaction as it seeks to boost socks before the lean months. (Bloomberg Quint)
Philippines barbershops, gyms, churches may reopen in areas under modified GCQ
Life in areas under modified general community quarantine will return closer to normal this June, as relaxed rules will now allow people to return to salons, gyms, and even places of worship.
Trade Secretary Ramon Lopez said sectors which have been classified as "category 4" or restricted industries due to the nature of close contact among patrons will be allowed to reopen in most parts of the country now considered at low risk for more COVID-19 infections.
Barbershops, gyms and sports facilities, and personal care services will be allowed to open in areas under modified GCQ. Restaurants may also be allowed to accept dine-in customers, but all should be at 50 percent capacity to maintain social distancing, Lopez said. (CNN Philippines)
Philippines adding three cities to GCQ areas
Three cities were added to the list of places that will shift to general community quarantine (GCQ) beginning June 1, a Malacanang official said Saturday.
In the regular ‘Laging Handa’ briefing, Presidential Spokesperson Harry Roque said the cities of Cebu, Mandaue and Zamboanga will also ease into GCQ until June 15.
Metro Manila will go into GCQ as well next month. Other areas are:
*Region 2 or Cagayan Valley (Cagayan, Isabela, Nueva Vizcaya, Quirino, Santiago City)
*Region 3 or Central Luzon (Aurora, Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac)
*Region 4-A or Calabarzon (Cavite, Laguna, Batangas, Rizal, Quezon, Lucena City)
*Region 7 or Central Visayas (Bohol, Cebu, Negros Oriental, Siquijor)
Philippines faces growing budget problems in context of crisis
The country's budget shortfall swelled in April as the government poured more funds into COVID-19 response and saw tax collections drop after many businesses went on lockdown, latest Treasury data showed.
The government spent ₱461.7 billion in April alone, double the ₱221.8 billion released a year ago. The spending tally was pushed up by fund releases for the government's cash aid program to 18 million poor families estimated at ₱100 billion, as well as other subsidies via the Small Business Wage Subsidy Program and additional grants to local government units to combat outbreaks.
These emergency spending measures were allowed by the Bayanihan to Heal as One Act, which allowed President Rodrigo Duterte and the Cabinet to realign and free up some ₱353 billion from the national budget to respond to the pandemic.
The second tranche of cash aid to 17 million families – made up of 12 million households that still remained under lockdown in May and 5 million new beneficiaries – is expected to be released this month, alongside other doleouts to help displaced workers sustain their basic needs for now. (CNN Philippines)
Philippines police does public transport test
Police in the Philippine capital Manila did a dry run on Tuesday of measures to enforce social distancing on public transport and control the spread of coronavirus, a tricky task in a densely populated city known for its commuting chaos.
More than 500 police trainees in Manila posed as rail passengers in an exercise to manage hundreds of thousands of people once public transportation eventually resumes, having being closed for nearly 11 weeks.
Cadets in jeans, white T-shirts and face visors marched up the stairs of a light rail transit (LRT) station before joining orderly queues to platforms and filing slowly into spacious train carriages.
“From early morning up to late at night there is always a line of passengers waiting to ride a train. We are doing this simulation to better prepare for the smooth operations of the LRT,” said Metropolitan Manila police chief Debold Sinas.
On a normal day, millions are on the move in and around Manila, pushing transport networks to their limits. (Reuters)
Philippines schools might be safe to reopen in August after all
Health Secretary Franciso Duque III on Tuesday supported the reopening of classes in August despite the absence of a vaccine against coronavirus, in contrast to an earlier pronouncement of President Rodrigo Duterte.
Duque's statement came a day after Duterte said he did not approve of the opening of school classes until there was an available vaccine against the coronavirus disease.
Duque said it is safe to start classes amid the COVID-19 crisis as long as minimum health standards, such as physical distancing, wearing of face masks, and disinfecting of classrooms, will be observed.
He said the Department of Education has "many measures in place" to ensure the safety of students should they go back to school on August 24 — the date set by Education Secretary Leonor Briones. (CNN Philippines)
Philippines Central Bank tells banks to adopt necessary measures
The Bangko Sentral ng Pilipinas has told banks to adopt policies that will not leave borrowers suddenly scrambling for funds when they receive their bills with accumulated loan dues after months under lockdown.
BSP Governor Benjamin Diokno asked banks to fulfill their "patriotic duty" and go easy on collecting overdue loans once the grace period is lifted at the end of the enhanced community quarantine.
"While interest accrued during the mandatory grace period under the ECQ and MECQ (modified ECQ) will still be collected in lump sum on the new due date or on a staggered basis over the remaining term of the loan, we expect BSP-supervised financial institutions to provide and communicate the least burdensome payment options to their clients," Diokno said in an online press briefing Thursday.
A fresh 30-day extension for credit card and other loan payments has taken effect for all bills falling due this month, with the central bank insisting that the modified ECQ in Metro Manila and select provinces had the same effect as the typical ECQ, which has stretched for over two months.
During the period, loans due since mid-March can be settled until June without incurring additional interest and other charges, as provided under the Bayanihan to Heal as One Act. (CNN Philippines)
More Philippines government agencies, LGUs allowing e-payments
More agencies and local government units (LGUs) are now allowing individuals and businesses to pay taxes, permits and other obligations to the government digitally, according to the Bangko Sentral ng Pilipinas (BSP).
In a virtual press briefing, BSP Governor Benjamin Diokno said more agencies are now participating in the government electronic-payment (EGov Pay) facility that was launched last November.
“Aside from providing convenience in receiving and making payments, digital payment initiatives pursued by the BSP will further enhance the country’s overall competitiveness as we begin to transition to the new economy,” Diokno said. (PhilStar)
Philippines may allow beauty saloons and barber shops to reopen in quarantine zone
The Department of Trade and Industry has announced it will look into the possibility of allowing hair salons and barber shops in areas with loosened restrictions on economic activities.
DTI Secretary Ramon Lopez said there would be inspections on Sunday to find out how well these establishments could implement health protocols to protect customers and employees once they resume operations under easier quarantine rules.
As a general rule, all offices and other commercial establishments that will reopen must adhere to basic infection control measures, including one-meter distancing between employees, the wearing of face masks, and temperature checks. (CNN Philippines)
Philippines economy expected to contract even further
The Development Budget Coordination Committee (DBCC) expects the economic contraction may further deepen this year as stringent measures to contain the coronavirus outbreak have brought the country to a standstill.
The DBCC, an inter-agency body composed of President Duterte’s economic managers, lowered its gross domestic product (GDP) estimates for the year to between minus 2.0% and minus 3.4%.
The government initially estimated that the economy may shrink by 0.8% or register zero growth this year.
GDP declined by 0.2% in the first three-months of the year, the country’s first contraction since the fourth-quarter of 1998. (Manila Bulletin)
Philippines considers to tax digital companies including Netflix and Lazada
Subscribing to Netflix to watch your favorite show or shopping at Lazada may cost you more soon as two lawmakers propose additional tax on digital services. House Ways and Means Committee Chairman Joey Salceda last Monday filed House Bill 6765 or the “Digital Economy Taxation Act of 2020" to raise more revenues to fund the government’s efforts to recover from the impact of the COVID-19 pandemic. If passed into law, the measure would yield about P29.1 billion annually in incremental revenues for the government. “The digital economy is becoming a rising component of overall commerce. While it has brought convenience and efficient in many sectors where it is now becoming a competitor, if not the norm, it is also a largely untaxed segment of the economy,” according to the bill. Under the measure, digital advertising by Google and social media giant Facebook, as well as subscription-based services like Netflix and Spotify will be subject to value added tax. (CNN Philippines)
Digital transition crucial for Philippines to survive crisis
The COVID-19 pandemic has highlighted the need for the Philippines to address its “digital divide” and transition to becoming a digitally-powered economy, according to the country’s National Economic and Development Authority (NEDA) chief, Karl Kendrick Chua.
Like more or less everywhere else in the world, the last few months have been trying times for the Philippines, while the economic outlook for the road ahead is worrying.
Last month, local press reported that poverty would likely worsen because of the effects of COVID-19, while the scale of the damage is yet to be known.
The government’s medium-term plan was to cut poverty rates by 14 percent by 2022. It made headway on those ambitions in 2018 when the proportion of poor Filipinos was lowered from 22 percent to 16.6 percent.
That was “a very good start”, Chua said, but the pandemic will likely have set things back, and the government must now work to reduce the risks “for the poor and those in the informal sector.”
Part of those efforts will include cash aid and assistance to SME employees in efforts to temper the outbreak’s economic impact, but looking further down the line, the goal must lie in empowering poorer populations and businesses with digital growth opportunities. (Techwire Asia)
US Blueberries allowed on Philippines market
The US becomes the first country to gain official market access to the Philippines, with US exports expected to supply Philippine retail and food service sectors. The imports will help boost the existing but limited domestic production.
Traders estimate sales of US fresh blueberries could reach US$500,000 in the first season, with the potential for that to grow in excess of US$1m in the future with concerted marketing efforts aimed at increasing consumer awareness.
The Philippine Department of Agriculture (DA) had previously allowed limited and intermittent importation of fresh blueberries specifically for hotels, restaurants, and high-end supermarkets. (fruitnet.com)
Airlines in Philippines in trouble
The COVID-19 pandemic has paralyzed several industries, including the airline business which has seen significant revenue losses. With air passenger traffic plunging dramatically across the globe due to lockdown restrictions and heightened fears, the president of Philippine Airlines said an industry bankruptcy is likely to happen, including in the Philippines. “Let’s look at what the rest of the world is seeing. Already, we're seeing major carriers go bankrupt,” PAL president and chief operating officer Gilbert Santa Maria told CNN Philippines on Wednesday. Dave Calhoun, the chief executive of American aerospace company Boeing, earlier said that a major United States airline carrier will likely go out of business. This doomsday scenario is “a distinct possibility in the Philippines as well,” according to Santa Maria. “Given that we have no revenues and none of the carriers have revenues, we’re in dire straits,” he said.
Under the so-called new normal, Santa Maria said he anticipates that airliners will have to operate between 65 to 75 percent passenger capacity. “We will actually have fewer people on the flight, mainly because demand is down and also because we will offer passengers a choice,” he explained. “For passengers, we will allow them to be socially-distanced onboard the aircraft.” PAL conducted airport simulations on Wednesday to identify problems and “try to eliminate them” before resuming operations. Airlines in the country have extended flight suspensions to comply with the new rules under the modified enhanced community quarantine in high-risk areas, including Metro Manila, which will take effect from May 16 to 31. (CNN Philippines)
The modified lockdown will allow the following industries to re-open at full capacity
- Media outfits
- Cement and steel production
- Business process outsourcing and export-oriented establishments, without need to set up onsite or near-site accommodation arrangements
- Mining and quarrying
- E-commerce companies
- Postal, courier and delivery services
- Rental and leasing, other than real estate, such as vehicles and equipment for permitted sectors
- Employment activities that involve the recruitment and placement for permitted sectors
- Repair of computers, personal and household goods
- Housing services
The following industries can operate at 50% capacity while encouraging work-from-home and other flexible arrangements:
- Other manufacturing industries classified as beverages, including alcoholic drinks; electrical machinery; wood products and furniture; non-metallic products; textiles and clothing/wearing apparels; tobacco products; coke and refined petroleum products; other non-metallic mineral products; computers, electronic and optical products; electrical equipment; machinery and equipment; motor vehicles, trailers and semi-trailers; other transport equipment
- Real estate and leasing activities
- Administrative and office support such as photocopying and billing services
- Financial services such as money exchange, insurance, microfinance and credit cooperatives, reinsurance and non-compulsory pension funding Legal and accounting services
- Management consultancy
- Architectural and engineering activities
- Science and technology, and research and development
- Recruitment and placement agencies for overseas employment
- Advertising and market research
- Computer programming and information management
- Publishing and printing
- Film, music and television production
- Photography, fashion, and industrial, graphic and interior design
- Wholesale and retail trade of vehicles and their parts
- Malls and commercial centers
- Takeout and delivery services for restaurants
- Hardware stores
- Clothing and accessories
- Bookstores and school and office supplies
- Baby care supplies
- Pet food and supplies
- Information technology, communications and electronic equipment
- Flower, jewelry, novelty, antique and perfume shops
- Toy stores with their playgrounds and amusement areas closed
- Firearms and ammunition trading establishments
The following will remain closed, said the task force:
- Tourist destinations like water parks
- Entertainment industries such as cinemas, theaters and karaoke bars
- Child amusement industries
- Libraries, archives, museums and cultural centers
- Gyms, fitness studios and sports facilities
- Personal care services such as massage parlors, saunas, facial care and waxing (ABS-CBN)
Several malls in Metro Manila, Laguna, and Cebu City are set to reopen on Saturday — but shoppers may be in for a different experience, as the establishments institute measures to ensure their safety. With the three areas transitioning to a more relaxed modified enhanced community quarantine, non-leisure shops in malls are now allowed to reopen at 50-percent capacity, so that the public can avail of essential goods and services. Restaurants will also be reopened, but only take-out or drive-through purchases are allowed. Malls in Metro Manila have been closed for two months since the first enhanced community quarantine was imposed in the region on March 15. (CNN Philippines)
- EMEx classifies Philippines 'lockdown measures' as Severe after government relaxed some restrictions
The Philippine economy could face its deepest contraction in more than three decades, with the government now projecting it to shrink by 2% to 3.4% this year in the wake of the pandemic. The coronavirus outbreak will cost the economy 2 trillion pesos ($40 billion) this year or nearly a tenth of gross domestic product, the Development Budget Coordination Committee said in a statement on Wednesday. Massive spending will bloat the budget deficit to as much as 8.1% of GDP so the economy could return to growth of a 7.1% to 8.1% next year, it said. The Philippines, one of the region’s fastest-growing economies, was the first country in Southeast Asia to shut down large swathes of its economy since mid-March. The restrictions dragged GDP in the first three months to a 0.2% contraction, with the government expecting a deeper slump this quarter. (Yahoo Finance)
The Philippines on Tuesday announced an extension of a lockdown of its capital, Manila, to 11 weeks, stretching one of the world’s strictest and longest community quarantines to June to try to contain coronavirus outbreaks. That would buck a global trend of easing lockdowns as countries try to strike a balance between containment and restoring some normalcy to limit economic damage. President Rodrigo Duterte mentioned an extension in “some areas” on Tuesday and his spokesman Harry Roque later confirmed the timeframe and retention of lockdown in the biggest cities, Manila and Cebu. That means Manila, which accounts for two-thirds of the country’s infections and 72% of deaths, will be under lockdown for 11 weeks, or 80 days, longer than the 76-day quarantine in the Chinese city of Wuhan, the global epicentre of the virus.
Restrictions will be eased across most of the country in areas deemed lower-risk, and some essential economic activities will be permitted in the capital, Roque said, in a bid to restart an economy racing towards recession due to a sharp drop in domestic consumption, the main driver. That has slammed the brakes on two decades of uninterrupted growth in the first quarter, which shrank to 0.2% compared with a year earlier, far short of economists’ forecasts of a 3.1% expansion. (Reuters)
The Philippines is looking to import another 300,000 tonnes of rice to boost state stockpiles while battling the coronavirus pandemic, ahead of a lean third-quarter harvest, a senior official said on Monday. A government-to-government deal of this volume would raise Philippine rice imports so far this year to a record 3 million tonnes. Agriculture Secretary William Dar said in a statement the government has already sent inquiries to Asia's biggest producers in Myanmar, Vietnam, Thailand, India and Cambodia. Fresh demand from the Philippines, the world's top rice buyer, could boost export prices in Asia that are already at their highest in as much as two years. (Bangkok Post)
More Filipinos turned to online fund transfers instead of ATM transactions to access their money amid the coronavirus lockdown, the Bangko Sentral ng Pilipinas said. BSP Governor Benjamin Diokno reported a 25 percent spike in online bank transactions for the first one and a half months of the enhanced community quarantine, compared to 45 days before strict stay-at-home rules took effect. This translated to 2.13 million more digital bank transfers, cumulatively worth ₱64.62 billion. (CNN Philippines)
The Philippines on Saturday (May 9) announced new restrictions on international flights landing at its main airport in the capital, where most of the country’s coronavirus infections have been reported. "Starting on May 11, inbound international charter and commercial flights landing at the Ninoy Aquino International Airport (NAIA) will have assigned days,” the Civil Aviation Authority of the Philippines (CAAP) said in an advisory. Chartered flights will only be allowed on Mondays and Thursdays, while commercial flights will be allowed to land on Tuesdays, Wednesdays, Fridays, Saturdays and Sundays. All will have to secure prior clearance from the Department of Foreign Affairs and the CAAP, the advisory said. The restrictions, which will be in effect until June 10, aim to ensure that the airport will handle no more than 400 passengers per day, which is its capacity, the CAAP added. (The Star)
Fitch Ratings has revised the Outlook on the Philippines' Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Positive, and affirmed the rating at 'BBB'.
The revision of the Outlook reflects deterioration in the Philippines' near-term macroeconomic and fiscal outlook as a result of the impact of the global COVID-19 pandemic and domestic lockdown to contain the spread of the virus. Fitch projects the economy will contract this year, and that fiscal relief measures will contribute to a widening of the 2020 general government deficit by more than 3.5pp of GDP. The affirmation of the 'BBB' rating reflects the Philippines' fiscal and external buffers, including its lower government debt/GDP ratio compared with peer medians and net external creditor position, as well as its still-strong medium-term growth prospects.
Fitch projects the economy to contract by 1% in 2020, after expanding by 6% in 2019. The 2020 forecast is uncertain and subject to considerable downside risks depending on how the virus runs its course globally and domestically and the possibility of a further extension or re-imposition of lockdown measures. (Fitch Ratings)
Television screens tuned into the Philippines’ biggest broadcaster ABS-CBN went blank on Tuesday evening, after the network was forced off air by a cease-and-desist order that has been condemned as a brazen attack on press freedom. The media group, which has been repeatedly attacked by the country’s president, Rodrigo Duterte, has faced months of uncertainty over its future. An application to renew its franchise, a requirement in order to continue operations, had been delayed in congress. It had been expected that the network would be allowed to continue broadcasting during the coronavirus lockdown, when access to reliable information is crucial to public health. Millions of people living in the country’s capital and main cities remain under quarantine measures until mid-May. On Tuesday, however, the network went off air just before 8pm, following the decision by the country’s telecoms body, National Telecommunications Commission. Its 25-year congressional franchise ended on Monday. (The Guardian)
The biggest of corporate efforts is Project Ugnayan, the fund-raising initiative led by top business groups which has pooled ₱1.4 billion in donations to help over 7.6 million people in the vulnerable communities of Greater Metro Manila. Caritas Manila’s Project Damayan, the project’s main distributor of emergency cash through ₱1,000 supermarket gift certificates has delivered GCs to 1,366,495 families or 6,832,475 people. Pantawid ng Pag-ibig ABS-CBN’s Pantawid ng Pag-ibig has reached a total of 631,921 families or 3,151,605 people by the end of their program. Jollibee’s FoodAID program has delivered ready-to-cook chicken to 500,000 families or 2,500,000 people. (Manila Bulletin)
The Philippines is shutting its airports to all commercial flights for at least a week starting Sunday (May 3), as its quarantine capacity is near breaking point following a recent surge in Filipino workers returning from abroad. The decision has left hundreds of thousands of Filipinos marooned in over 40 countries dealing with their own viral outbreaks. Most have lost their jobs. Many were furious that the government gave the order abruptly. It also caused confusion, after ambiguous official instructions were sent out on social media. (Straits Times)
The country’s debt stock went up by 4.8 percent to an all-time high in end-March and is expected to rise further this year as the national government borrows heavily from domestic and foreign sources to boost its war chest in containing the coronavirus pandemic, according to the Bureau of the Treasury. Preliminary data released by the BTr Thursday evening showed national government debt reached a record P8.18 trillion in end-March or P375.15 billion higher than the P7.8 trillion recorded in end-March last year. The debt figure was 5.8 percent higher than the P7.73 trillion recorded in end 2019 and a 0.1 percent increase from February’s P8.16 trillion. (PhilStar Global)
The Philippines has allowed online casinos targeting Chinese gamblers to partly resume operations amid a lockdown on the main Luzon island. "The decision was reached with the intention of helping the national government raise necessary funds to combat the novel coronavirus pandemic," the Philippine Amusement & Gaming Corp said in a statement. (The Star)
The legal landscape is being shaped by technology and COVID-19. The National Bureau of Investigation has reported a 100% rise in cybercrime incidents during the lockdown. Sen. Sherwin Gatchalian also warned that there may be a surge in cybersex trafficking of children in this period. With these changes, the legal framework has changed too. Laws governing electronic transactions and penalizing offenses committed through cyberspace have been enacted, and the way our legal institutions operate has been modified to cope up with and make use of computer-driven technologies. (Phil Star)
The government issued on Thursday the varying degrees of quarantine restrictions to be imposed in the country from May 1 to 15 to prevent the further spread of COVID-19 in the Philippines. President Rodrigo Duterte has approved the recommendations made by the COVID-19 task force on rules to be imposed in areas under enhanced community quarantine (ECQ) and general community quarantine (GCQ), Presidential Spokesperson Harry Roque said. (CNN Philippines)
The following high-risk areas will be placed under the strict ECQ for 15 days starting Friday:
- Metro Manila
- Central Luzon, except for Aurora
- Benguet, including Baguio City
- Iloilo, including Iloilo City
- Cebu, including Cebu City
- Bacolod City
- Davao City
All other provinces will be placed under the more relaxed GCQ.
Fresh funds will be funneled by the government to two flagship programs meant to assist formal and informal workers displaced by the coronavirus disease-2019 (COVID-19), one of which was earlier suspended for lack of funds. An additional 530,000 workers will get assisted by the combined P2.5 billion new allocations for the COVID-19 adjustment program (CAMP) as well as the Tulong Panghanapbuhay sa Displaced/Disadvantaged Workers (TUPAD) program, officials from the labor department said on Wednesday. Also overseas workers will be fiancially helped by the government. (Phil Star)
Philippine President Rodrigo Duterte said he may soon ease restrictions to contain the coronavirus outbreak, a move that his spokesperson said will be considered after the lockdown ends in mid-May. "While others are still on lockdown, we might open partially," Duterte said in a televised address Monday (April 27) night, without specifying a timeline. (The Star)
The Philippines said on Tuesday it raised $2.35 billion through the sale of 10-year and 25-year U.S. dollar bonds, to help finance this year’s budget and measures to mitigate the economic impact of the coronavirus outbreak. (Financial Post)
Remittances from Overseas Philippine Workers, which amounted to $33.5 billion last year, or roughly ten per cent of the country’s GDP, could fall by up to 30% in 2020, translating into $10b USD less cash for the mostly low-earning Philippine families, as the coronavirus keeps people working abroad out of jobs and causes their salaries shrinking or even evaporating.
The City of Manila is using its partnership with PayMaya, the digital payment arm of PLDT's Voyager Innovation's, to provide financial aid to its senior residents. More than 13m Pesos has been disbursed in financial assistance to eligible senior citizen beneficiaries through the platform. The amount is intended to help beneficiaries cope with the effects of the ongoing enhanced community quarantine. About 9000 senior citizens are among the initial batch of beneficiaries equipped with citizen ID cards powered by PayMaya. The ID cards can be used to pay for basically anything the senior citizens needs and even to withdraw cash from Bancnet ATMs. Another 8000 senior citizens have already recieved their money for the same period earlier in 2020. The PayMaya-enabled citizen ID card initiative was started in the second half of 2019 as part of the Manila’s citizen benefit program for senior citizens, persons with disabilities, and solo parents. Over 17000 cards ID cards have been distributed by now. (PhilStar Global)
An important consequence of the pandemic in the Philippines might be the relocation of families from urban centers to other areas. The Philippines is working on the 'Balik Probinsya' proposal that will encourage people to go back to their home provinces after the most important travel restrictions are lifted. The initiative is necessary to decongest Metro Manila and must give people hope. The programme is intended for after the enahnced community quarantine is lifted and travel is gradually normalized. The proposal is endorsed by President Rodrigo Duterte and is meant as well to spur the economy. The government believes a vibrant economy can only be realized if families are encourged to relocate from urban areas to the provinces.
President Rodrigo Duterte announced that the lockdown and heavy quarantine measures in some parts of the country are extended. Heavy infected regions that didnt fall under the lockdown regime will now see more restricted measures. Specific areas with no to few cases will some restrictions being lifted. From the office of Philippines President Rodriguo Duterte:
President Rodrigo Roa Duterte approved a recommendation Thursday extending the enhanced community quarantine (ECQ) in Metro Manila, Central Luzon and Calabarzon and other high-risk provinces until May 15, 2020, to stem the spread of coronavirus disease 2019 (COVID-19) in the country.
The President made the decision Thursday following a meeting with the Inter-Agency Task on the Management of Emerging Infectious Diseases (IATF-EID) in Malacanang.
In an announcement Friday morning, Presidential spokesperson Harry Roque said that aside from the three regions, Pangasinan, Benguet, Albay, Catanduanes and the Mindoro provinces will remain under ECQ.
The extension of ECQ in the provinces of Pangasinan, Benguet, Tarlac, and Zambales is still subject to re-checking and may still be revised by April 30, Roque said.
Antique, Iloilo, Cebu and Cebu City in the Visayas and Davao del Norte and Davao City in Mindanao will also be subjected for rechecking.
All provinces, not covered by ECQ with moderate risk from the virus, will be subjected for reevaluation. A decision will be made whether to put them under general community quarantine (GCQ) or remain under ECQ, according to Roque.
Provinces under GCQ may reopen certain areas in their labor sectors, which will be done in phases.
Also, under this condition, individuals aged 20 below as well as senior citizens under high health risk should stay home.
Malls covering non-leisure shops will be allowed to open and priority and essential construction projects could also resume, Roque said.
Non-workers will be permitted to go out to buy goods and avail services except those pertaining to sector category IV or leisure.
Public transport will be allowed to operate at reduced capacity and local government units (LGUs) were mandated to enforce night-time curfew for non-workers.
For the option to shift to GCQ in moderate to low-risk areas, the task force recommended 100-percent opening of agriculture sector including fishery, forestry, and food manufacturing as well as all supply chain involving raw materials packaging, food retails, supermarkets and restaurants.
Fifty to 100-percent opening of manufacturing sector was also recommended such as those engaged in electronics and exports, e-commerce and delivery for essential and non-essential items, repair and maintenance services, housing, and office services.
The IATF also considered up to 50 percent onsite work and 50 percent work-from-home for GCQ areas with moderate to low-risk. These include financial services, business process outsourcing (BPO), other non-leisure wholesale and retail trade, other non-leisure services.
With the President’s recent decision, Roque said the government will reprioritize the grant of cash assistance to households that remain under ECQ.
President Duterte placed the entire Luzon island under ECQ in mid-March to prevent the further spread of COVID-19. The restriction was supposed to lapse on April 13 but the President approved the proposal to extend it until April 30.
Duterte also offered a 50 million pesos reward to any Filipino who could create a vaccine. Manila, the capital and heavy congested city, has 13 million people and millions of informal settlers. (CNA)
Philippines is missing a big chunk of remittance volume due to the COVID-19 crisis. The overseas Filipino remittance volume represents 8.5% of GDP. Overseas workers have routinely sent home an average of $2.3b USD a month over the past 5 year with 2019 remittance inflows totalling $30.1b USD or roughly 8.5% of GDP. Remittances are important in addition to domestic incomes and support ocnsumption and capital information with the middle class resulting in an investment boom. Many overseas Filipino workers, however, have returned home or have been laid off due to the impact of the COVID-19 virus. Remittances from abroad will in these uncertain times likely experience a 2.5% contraction which could affect both growth prospects and the external position of the Philippines.
Health experts have advised the national government of the Philippines to extend the lockdown in Metro Manila. With the end date of 30 April approaching, and still many infections on a daily base being reported in the capital of the country, it is only a matter of time, according to media, before the government will announce an extention of the measures.
President Rodrigo Duterte is meeting with health experts and former heads of the Department of Health (DOH) on Monday (April 20) to receive “critical information” that will help him decide whether to extend the Luzon lockdown anew or allow partial business reopenings to stave off an economic disaster. Justice Secretary Menardo Guevarra said on Sunday that the critical information will be provided during the meeting of the Inter-Agency Task Force on Emerging Infectious Diseases, the temporary government body that oversees the administration’s response to the new coronavirus pandemic. The government, Guevarra said, cannot wait until the entire country reaches zero transmission, “as by then we may have hit the tipping point where it would be extremely difficult to recover from the economic and social devastation.” (The Star)
PayMongo Philippines is encouraging micro, small and medium enterprises (MSME's) to set up their businesses online. This should help them survive the current pandemic as well as the unprecedented impact it has on trade and commerce in the years to come. PayMongo especially underscores the importance of ecommerce. MSMEs represents about 90% of the Philippines business landscape.
A month into the Luzon-wide enhanced community quarantine and similar lockdowns in other areas, nearly 30,000 violators had been arrested nationwide, according to data from the Philippine National Police. (CNN Philippines)
Philippines President Rodrigo Duterte has threatened a martial law-like crackdown to prevent people flouting a virus lockdown in the nation's capital. Duterte spoke a day after authorities reported an upsurge of cars on Manila's roads, which have been nearly deserted since a sweeping lockdown was imposed a month ago on about half the country's 110 million people. "I'm just asking for a little discipline. If not, if you do not believe me, then the military and police will take over," Duterte said in a televised speech late Thursday April 16. "The military and police will enforce social distancing at curfew ... It's like martial law. You choose," he mentioned. (CNA)
Manila authorities will give P1,000 ($19,62 USD) each to every family in the city to help them cope with a 6-week lockdown of Luzon aimed at curbing the COVID-19 pandemic, Manila Mayor Isko Moreno said Thursday. The Manila government allotted some P591 million for the cash aid, including funds that were supposed to be spent for road works, said Moreno. All families, from the poorest to the upper class, will get the P1,000 cash aid, he said. The city government also sought cash aid from the social welfare department for 350,000 of its poorest families, of whom 185,000 were approved, said the mayor. Manila has received P1.4 billion from the agency and has distributed the cash aid to some 3,000 families so far, he said. The city also provides food packs to residents and a P500 pension for its 9,000 senior citizens. It will get rice from the National Food Authority to distribute among residents and will again examine which projects could be postponed to come up with additional funds for relief aid, Moreno said. (ABS CBN)
The Philippines has launched a more aggressive testing programme for the coronavirus today to locate as many as 15,000 unknown infections, despite having implemented some of Asia's strictest and earliest lockdown measures. Authorities have targeted several phases of ramped-up testing, starting tosday with 8,000 people working at or admitted to Manila hospitals that were treating patients of Covid-19, a disease that has so far infected 4,932 people locally and killed 315. Though the Philippines has South-east Asia's highest number of confirmed coronavirus infections and 37 per cent of its known fatalities, the government believes its swift move to close borders and put half its population under home quarantine may have averted a far greater toll and a healthcare disaster. The former military chief in charge of the Philippines coronavirus task force told today modelling suggested 75 per cent of infections — or 15,000 people — had yet to be detected, so a big testing push in the capital could be decisive.
The Business Recorder: The Philippines' central bank governor on Sunday said another 200 basis-point cut in the bank's reserve requirement ratio is “forthcoming" and signalled more cuts in its policy interest rate to cushion the economic blow of the novel coronavirus. The bank has slashed its interest rate by a total of 75 basis points (bps) so far this year to 3.25pc – more than the 50 bps reduction to which it had earlier committed. It also cut the ratio of funds it requires banks to keep in reserve by 200 bps last month to help boost liquidity in the economy. “It is now clear that reverting to where we were in 2018 – policy rate at 3.0pc – is no longer an appropriate policy goal," Benjamin Diokno told reporters. “A deeper cut is warranted in response to the expected sharp economic slowdown." The Philippines, usually among Asia's fastest-growing economies, is set to post zero growth this year under the government's best-case scenario, versus last year's 5.9pc. “The Philippines is now facing a once-in-a-lifetime crisis", Diokno said. “These new realities call for bolder but appropriate moves on the part of the BSP (central bank)." President Rodrigo Duterte on Tuesday extended measures covering over half of the population aimed at limiting social contact, to slow the spread of a virus that has infected 4,428 people in the country and caused the deaths of 247. Policies restricting movement and gatherings have been in place in and around the capital Manila for almost a month, dampening domestic consumption, a key driver of economic growth. “The monetary authority's job, in coordination with fiscal authorities, is to manage a ‘soft' landing and ensure economic takeoff begins quickly once the pandemic fades," Diokno said.
The World Bank has approved a $500m loan to help the Philippines fight the outbreak of the new corona virus. The financial assistance is part of a wider package of $14b by the multilateral institution in order to help developing countries fight the pandemic. The Philippines also received $4m from the United States and 1300 new beds.
The Philippines government has launched an online platform to assist with contact tracing. Medical workers and authorities currently face difficulties in establishing who infected patients met in the days before their diagnosis. Through a website and mobile application called StaySafe.ph, Filipinos can report the health condition of their family members. The technology was developed by the National Task Force (NTF) COVID-19 and information technology company Multisys Technologies Corporation.
Nickel prices rose after the Philippines, one of the world's leading producers, has suspended major operations to comply with the virus-containment measures. This has stoked concerns over global supply. Three-month nickel on the London Metal Exchange (LME) rose as much as 1% to $11,625 a tonne, its highest since March 20. The most-traded nickel contract on the Shanghai Futures Exchange (ShFE) climbed as high as 1.8% to 95,860 yuan ($13,567.72) a tonne, also the highest since March 20. Nickel Asia Corp and Global Ferronickel Holdings Inc, the Philippines’ top nickel ore producers, on Wednesday said they were suspending operations in a major mining province. The Philippines was the world’s second-biggest producer of nickel ore in 2019, data by the International Nickel Study Group showed. (Financial Post)
The Philippines government is facing a severe budget problem with funds running low. However, the war chest must be filled in order to finance the quarantine that will now be extended. The government is eying a war chest worth $23b USD to fight the epidemic. Most of it must be sourced by debts, what should not be a problem to borrow, based on the country's relative healthy fiscal space. The bul of funding which will be raised with the central bank, worth $16.4b USD, will go to suppport the economy. Another $6b USD will fund programs for the most vulnerable. A separate $650m USD is secured to help the country's front-liners, including health workers. Its is unclear where all the money has to come from but the government hinted a part will come from multilateral agencies such as the Asian Development Bank (ADB) and China-led Asian Infrastructure Investment Bank (AIIB).
The President of the Philippines, Rodrigo Duterte, has extended the lockdown until Thursday 30 April. The measures were implemented to stop the spread of the COVID-19 virus but a rising death toll, infections, and delays in mass testing have resulted in the decision to extend it. The president also said that the government has not enough funds to finance the lockdown and asked the private sector for support. The governmental quarantine is implemented on Luzon, the most populous island which includes the capital Manila, while provincial and town governments around the country have implemented their own versions of a lockdown and social restriction measures. Commercial aviation and shipping are banned as well.
The National Economic and Development Authority (NEDA) is working hard on identifying policies that will help the Philippine economy to adjust. NEDA is in charding of preparing such policies. With the most populated island of the Philippines in lockdown including the capital Manila, growth for 2020 is projected to be only 2% according to the Asia Development Bank (ADB). "The group is currently conducting surveys for business owners (link: www.dof.gov.ph/iatf-afp-msme-survey/) and consumers (www.neda.gov.ph/consumer-rapid-assessment/). Two more surveys will follow on industry and services, and agriculture and fisheries. A public consultation is also being held to help define and prepare for the new normal", CNN Philippines reports.
The Asia Development Bank (ADB) expects that the Philippines economy could grow by 2% in 2020 compared to 5.9% in 2019. Earlier, the ADB said that depending on the length of the epidemic and measuers, the economy could contract by 0.6% or grow by 4.3%. If the pandemic is contained by June, and business goes back to usual, 6.5% growth is possible in 2021. The government's "Build, Build, Build" program and consumption incentives will drive economic growth.
President Duterte of the Philippines has ordered the security forces to shoot anyone who violates the enhanced community quarantine in Luzon. If violators cause trouble and abuse medical workers they could be shot. Duterte also warned the spread of the virus is getting worse. The comments came after there were several disturbances and arrests on Wednesday 1 April. Residents in poor areas of the capital Manila were protesting because they claimed to not have received sufficient government food aid. Duterte is known for his war on drugs where he gave similar orders.
The enhanced community quarantine in Luzon, Philippines most popolous island where also the capital Manila is located, might be extended with 30 days. Read more on CNN Philippines.
CNN Philippines: The national government has allotted a total of ₱200-billion-worth of aid for low-income households, farmers, and fisherfolk, amid the COVID-19 pandemic, President Rodrigo Duterte said. In his televised public address late Monday night, more than seven hours past the 4pm tentative schedule, Duterte said that the fund will go to low-income households who are most affected by this crisis in the country. “We have allotted ₱200 billion for low income households who are badly affected by this crisis. Beneficiary households will receive emergency support for their two months based on the regional minimum wage,” he said in his address to the nation Monday midnight. Duterte also urged the private sector to continue to “look after” their countrymen, and to help in any way that they can. Duterte also said that government is providing assistance to the agricultural sector. “To our farmers and fisherfolk, we have not forgotten you, and government is now employing quick response measures to help you during the crisis as well as ensure food productivity, sufficiency,” Duterte added. In line with this, the Department of Social Welfare and Development is set to distribute social amelioration cards for cash assistance amid the pandemic. The cash aid ranges between ₱5,000 and ₱8,000, and will be given to vulnerable sectors of society such as persons with disabilities, senior citizens, pregnant mothers, homeless persons and workers in informal sectors.
President Rodrigo Duterte is about to deliver his first weekly report on the additional powers he received from parliament to deal with the COVID-19 crisis. Under the Bayanihan to Heal as One law, which was passed last week, Duterte should deliver a weekly report to Congress every Monday where he would detail how he used his powers. Among the details Duterte could talk about is a report on how he distributed the P5,000 to P8,000 assistance to poor families.
The Central Bank of the Philippines plans to slash bank reserves to spur more lending and increase economic activity. Starting coming week, the bigger banks will only have to maintain 12% of total deposits intact which frees up 180 Billion Peso they can lend at a cheaper rate. The Central Bank hopes this encourages banks to keep lending to both retail and corporate sectors. (CNN Philippines)
- For full media release click here
The bigger conglomerates and other retail brands have committed to pay workers their full salaries despite the Luzon month-long shutdown. Companies that made pledges to their employees are Ayala Group, Jollibee Group, McDonald's Philippines, MVP Group, SM Group, San Miguel Corporation, Aboitiz Group, Udenna Group, Cebu Landmasters, Belo Medical Group and Vice Cosmetics. Some companies have waived rental fees like Aya Malls, Megaworld Lifestyle Malls, Robinsons Land and SM Malls. Smaller companies and street vendors however are expected to face the biggest problems.
In the Philippines there are serious concerns about the consequences of the COVID-19 measures for the poor neighborhoods of the capital Manila. After still recovering from the war against drugs, they are now seeing a quarantine situation. Homeless centers have become inaccessible and assistance is hard to get. Due to the various checkpoints in the cities its difficult for non-residents to bring in supplies. Its not just about the homeless but also the families who lost the breadwinner as a result of the drug war, the street vendors who cant sell their products, and families who simply lost their jobs.
The Bureau of the Treasury expects investors will continue to hold on to their cash amid uncertainly over the economic impact of the coronavirus disease (COVID-19) contagion in the country. National Treasurer Rosalia de Leon said that the national government rejected all bids for its short-dated IOUs up for sale yesterday after receiving “not serious” and “throwaway bids” for their ₱20 billion offering. De Leon said that local investors’ “preference is to hold cash with lingering virus.” For this reason, she said that the treasury expects this sentiment will continue amid fears over COVID-19 and the month-long enhanced quarantine in the entire Luzon island.
Big traffic jams at checkpoints prevented adequate food supplies around the island of Luzon. The government now extemped specific cargoes from further checking making sure they can pass through. It includes cargo related to the production of food, medicines, disinfectants and trucks linked to supermarkets, convenience stores, pharmacies and business process outsourcing. In a Memorandum the Department of Trade and Industry ordered that “movement of all food and non-food cargoes within, to, and from Luzon shall be unhampered, and if subjected to random inspection, shall not be delayed.” (Philstar)
In the Philippines, 32 of the country's largest companies "urged lawmakers to support President Rodrio Duterte's call for a special session to pass a supplemental budget to contain the spread of COVID-19, as well as address its economic impact by adopting a fiscal stimulus program." They argue millions of workers are now barred from making a living, while regular workers have been laid off, and that this is a matter of life and death for them and their families. They want the budget deficit to be more than 5%, usually a bad signal, but with many global economies in distress probably unavoidable and acceptable. (GMA)
An important travel update. The ban on international travel at Ninoy Aquino International Airport (Manila) has been lifted by the Philippine Inter-agency Task Force on Emerging Infectious Diseases (IAFT-EID). Manila International Airport Authority published a statement on its website (click here). After the announcement Philippine Airlines assured its connection with Dubai wont be disrupted. Anyone, except Filipino tourists, may now fly out of the country at any time. Only one person can drop someone of at the airport and must immediately go back home after doing so.
International travelers coming into the country are still subject to strict health screening and quarantine protocols. Passengers from Italy and Iran must provide health certificates from their embassies. Philippine Airlines announced it will use "sweeper flights" to bring stranded tourists from Cebu, which has the lurger number of stranded foreign nationals, to Manila and international destinations. Other destinations are not served for now. Cebu Pacific has cancelled all flights while Air Asia still flies internationally but will suspend those flights soon.
- EMEx classifies Philippines 'travel restrictions' as Severe because of limited travel options from both Manila and other airports regardless travel ban being lifted
President Rodrigo Duterte of the Philippines declared a state of calamity over the whole of the Philippines for the next 6 months. The President mobilized government agencies and local government units to use resources to tackle the COVID-19 threat while the police and military have been instructed to keep make sure the affected areas remain stable, according to Philippines newspaper 'Manilla Bulletin'.
“Such declaration will, among others, afford the national government as well as LGUs (local government units), ample latitude to utilize appropriate funds, including the Quick Response Fund, in their disaster preparedness and response efforts to contain the spread of COVID-19 and to continue to provide basic services to the affected population.”
- EMEx classifies Philippines 'lockdown' as Extreme because measures are nationwide implemented and due to their quarantine nature
- Please click here to read do's and don'ts about Philippines "enhanced community quarantine"
CNN Philippines reports: The Philippines government placed half the country, about 50m people, under an "enhanced community quarantine" from March 17 to April 12. Luzon, the biggest and most populous island where also the capital Manila is located, is almost fully locked down. All mass public transportation is suspended and residents told they can only leave their homes for essential items. Offices have been shut and only supermarkets, convenience stores, hospitals, medical clinics, pharmacies, and banks, as well as food delivery services and water stations will be allowed to remain open. From 17-03 people have 72 hours to leave the island if they wish, after all air travel to Luzon will be restricted. Filipino nationals, their spouses and children, permanent residents and holders of diplomatic visas will still be allowed entry, as will cargo.
Anyone resisting the quarantaine measures will be placed under arrest.
Companies requiring their employees to come to work can lose their business permits.
Companies that are exempted must provide transport for their employees.
- The government released a series do's and don'ts for the "enhanced community quarantine". Please click here to read them
Several islands and cities have decided to lock down their area. Noone can leave or enter. This includes Bohol, Boracay, Coron, El Nido, Mindora, Palawan and several other places. If people don't leave shortly they can be stuck for a longer period of time. Travelers are advised to contact airlines. Cebu Pacific and Philipine Airlines are trying to pick up everyone who wants to leave an island. Travelers are advised to follow local news and stay in contact with other travelers.
Vietnam’s economy unexpectedly expands amid pandemic
Vietnam’s economy unexpectedly grew in the second quarter, though at the slowest pace in at least a decade, as exports slumped because of the coronavirus pandemic.
Gross domestic product rose 0.36% from a year earlier, compared with a revised 3.68% in the first quarter, the General Statistics Office said Monday in Hanoi. The median estimate in a Bloomberg survey of economists was for GDP to shrink 0.9%.
Vietnam’s export-reliant economy is taking a knock as the virus disrupts global supply chains and hurts demand, but is still likely to be one of the better performers in Southeast Asia this year.
Prime Minister Nguyen Xuan Phuc said last month the economy could sustain growth of 4%-5% this year as the government looks to attract more foreign investment from businesses adjusting supply chains.
Exports fell 2% in June compared to a year earlier, while imports climbed 5.3%. (Bangkok Post)
Vietnam PM warns of economic calamity at Asean summit
Vietnam on Friday (June 26) warned that the virus pandemic had swept away years of economic gains as South-east Asian leaders met online for a summit that will also be dominated by anxiety over Beijing's moves in the flashpoint South China Sea.
The current chair of Asean also wants to use the summit to inject momentum into talks on a sprawling China-backed trade pact, the Regional Comprehensive Economic Partnership (RCEP).
A deal, which aimed to loop in half the world's population and third of its GDP, has been hampered by India's refusal to join over access to its market for cheap goods from China, the regional superpower with whom it is now locked in a deadly border row.
The immediate focus for the 10-member bloc is the crippling cost of the coronavirus, which has ravaged the economies of tourism and export-reliant countries such as Thailand and Vietnam.
A special Asean meeting convened in April to tackle the pandemic failed to agree on an emergency fund. (Straits Times)
Europe urges Vietnam to restart flights as FTA takes effect
Europe has joined the growing number of economies urging Vietnam to resume international flights, as the country appears virtually free of the coronavirus and represents a strong investment destination for those seeking diverse supply chains. (Nikkei Asia Review)
Vietnam's rice exports set to skyrocket
Việt Nam may take a global lead in rice exports for the year 2020, said Minister of Industry and Trade Trần Tuấn Anh in a report to the National Assembly on Monday.
Speaking to the NA, the minister said as countries were trying to raise food stockpiles due to the COVID-19 pandemic, demand for Vietnamese rice has been on the rise, pushing the country's rice exports in the first two months of the year to increase by 31.7 per cent from the same period last year.
Adverse effects caused by climate change, such as droughts and salinisation raised concerns over the country's ability to maintain its level of rice export. As a response, the Government ordered a halt to rice exports until May so that further studies can be done on Việt Nam's rice production and stockpile.
After studies revealed large rice stocks in the Mekong Delta and reviews done on the country's obligations with trade partners, Governmental ministries and agencies have asked for the Prime Minister's approval to continue Việt Nam's rice export activities.
Anh said the country maintained an export quota of 400,000 tonnes of rice in April and is set to resume its normal export level for May as global demand for rice remained high while making sure there is ample supply for the domestic market.
During the first five months of the year, Việt Nam exported over three million tonnes of rice, an increase of 11.8 per cent from the same period last year, reaching US$1.48 billion in value, a 25.44 per cent year on year increase. (Vietnam News)
Vietnam PM Phúc seeks to deepen Japan-Việt Nam ties post-coronavirus
Vietnamese Prime Minister Nguyễn Xuân Phúc said Việt Nam always considers Japan a top priority partner and seeks to deepen the two countries’ extensive strategic partnership.
He made the remarks during Tuesday's reception for the newly accredited Japanese ambassador to Việt Nam, Yamada Takio, in Hà Nội.
The Government leader said against the backdrop of the COVID-19 pandemic that triggered border closures and economic shutdowns across the world, the two countries had still managed to maintain exchanges within both bilateral and multilateral frameworks.
PM Phúc has had telephone conversations with his Japanese counterpart Shinzo Abe, while the two countries’ relevant agencies have shared information regarding the pandemic as well as exchanged experience in combating COVID-19.
PM Phúc highly valued the achievements of the Japanese Government and people during the fight against the coronavirus pandemic. (Vietnamnews)
Vietnam plans to resume flights to some coronavirus-free countries
Vietnam plans to allow a resumption of flights to and from countries that have had no cases of coronavirus for 30 days, state media cited the prime minister as saying on Tuesday (June 9), with priority destinations including Japan, South Korea and Cambodia.
In the comments broadcast by Vietnam Television (VTV), Mr Nguyen Xuan Phuc did not specify whether inbound travellers from these places would be subject to a quarantine programme in place since mid March.
Vietnam has contained its tally of infections from Covid-19 to a relatively low 332 and reported no deaths. Tens of thousands of incoming travellers have been put in quarantine.
"Vietnam is looking to resume international flights with countries that have registered no new Covid-19 cases in 30 days but the resumption needs to be extremely cautious considering the complexity of the pandemic," VTV quoted Prime Minister Phuc as saying. (Straits Times)
Vietnam rice export up in first five months
Vietnam exported a total of 2.9 million tonnes of rice in the first five months of 2020, bringing in US$1.41 billion, an increase of 5.1% in volume and 18.9% in value.
According to the Ministry of Industry and Trade (MOIT), Vietnam is seeing plenty of opportunities to outstrip Thailand in rice exports this year thanks to more competitive prices and a strong rally in shipment volume after the removal of the export quota.
During the first four months of 2020, the Philippines was the largest buyer of Vietnamese rice, purchasing 902,100 tonnes for US$401.3 million, up 11.4% in volume and 26% in value.
Vietnam also saw substantial increases in rice shipments to China, Indonesia, Taiwan (China) and Ghana, but exports to the Ivory Coast fell sharply by 44.5%.
As Vietnam fully resumed rice exports from May 1, prices of the Vietnamese grain during the month rose to the highest level for years, reaching an average of US$527 per tonne, up 5.6% from the previous month and 21.4% compared to a year earlier.
Vietnamese rice prices in the first five months of 2020 averaged at US$485 per tonne, up 13% compared with the same period of last year. (NDO)
The paradoxes of private sector development in Vietnam
State-owned enterprises were viewed as a dominant contributor to the development of Vietnam’s economy. But because the state sector is inefficient, and Vietnam is increasingly integrating internationally, the private sector is growing. Over 100,000 new private enterprises have registered under the new Law on Enterprises, promulgated in 2000 as the government’s first attempt to boost private sector development.
At the 12th Party Central Committee in 2016, the private sector was officially confirmed as an important propellant of Vietnam’s socialist-oriented market-based economy. According to the White Book on Vietnam Businesses 2019, Vietnam had 714,755 active firms as of 31 December 2018 of which over 99 per cent are domestic or foreign-owned private enterprises.
The development of the private sector has two key effects on Vietnam’s government.
On the one hand, the development of the private sector is putting strong pressure on Vietnam’s government to be more transparent and effective. A continuing budget deficit has forced the government to encourage greater private sector participation in the provision of public services and infrastructure investment. As a result, public bidding documents and planning information — which were previously confidential — are now more accessible. Powerful associations of foreign private enterprises — such as EuroCham and AmCham — are also pressuring the government to speed up institutional reforms and improve the business environment.
Due to these changes, Vietnam’s score in the World Bank’s ease of doing business index has increased from 62.6 in 2016 to 69.8 (out of 100) in 2020. (Eastasia Forum)
Vietnam resumes all domestic flights
Vietnam Airlines has resumed all domestic flights, according to local media reports.
The airline says the number of domestic flights exceeded 300 per day as of Friday. The number of flights, including cargo service, now exceeds 350 a day, nearly the same as last year.
Vietnam lifted a curfew on April 23, and since then the country's economy has been returning to normal. The government also intends to reopen the country to international flights.
Since the number of Vietnamese travelers is steadily recovering, the airline in May established five new routes, and the carrier plans to launch another six routes this month.
Meanwhile, the country's largest low-cost airline, VietJet Air, has resumed flying all 45 of its domestic routes. Bamboo Airways, which began flying last year, has also normalized its domestic schedule. (Nikkei Asian Review)
Vietnam posts US$1.9b trade surplus in first five months
Vietnam reported a trade surplus of US$1.9 billion (RM8.21 billion) in the first five months of this year amid the ongoing complexity for global markets caused by the Covid-19 pandemic, the Vietnam News Agency (VNA) reported.
According to the General Statistics Office (GSO), export turnover reached US$99.36 billion, down 1.7% year-on-year (y-o-y).
The domestic sector’s export value was US$33.3 billion, up 10.4% compared to the same period last year, while the FDI sector’s exports, including crude oil, were valued at US$66.06 billion, down 6.9%.
Commodities seeing strong growth in export value during the period included machinery, equipment, tools, and spare parts at 25%; computers, electronic products and components at 22.1%; rice at 17.2%; coffee at 2.9%; and cashew nuts at 2.2%.
Those with declining turnover were telephones and components (8.8%), textiles (14.5%), footwear (4.6%), fruits and vegetables (10.3%), rubber (29.6%) and pepper (17.9%).
Import value in the first five months, meanwhile, reached US$97.48 billion, down 3.8% y-o-y, the GSO said. (The Edge Markets)
Vietnam's export down in first five months in 2020
Vietnam's export and import turnovers in the first five months of 2020 decreased by 1.7 per cent and 3.8 per cent year-on-year respectively, the country's General Statistics Office said Friday.
Export turnovers totaled nearly 99.4 billion US dollars and import turnovers was roughly 97.5 billion US dollars during the five-month period, reports Xinhua.
Between January and May, the United States remained Vietnam's biggest importer with turnovers of $24.6 billion, followed by China with $16.3 billion and the European Union with $12.9 billion, according to the office.
Meanwhile, China was Vietnam's largest exporter with turnovers of $28.9 billion, followed by South Korea with $17.3 billion, and the Association of Southeast Asian Nations with $11.8 billion, the office said.
In 2019, Vietnam's total trade turnover reached nearly $517 billion with an export turnover of approximately $263.5 billion, up 8.1 per cent against 2018.
The country posted a trade surplus of more than $9.9 billion, the highest level in the past four years. (The Financial Express)
Vietnam spending heavily on bridges and roads
Vietnam is spending heavily on road and bridge projects in a bid to further develop its growing economy. A series of PPP road projects are being planned, while an important bridge link will be built in due course.
The investor for the Thu Thiem 4 Bridge project in Ho Chi Minh City (HCMC) is to be selected shortly. The bridge construction project will be handled under the PPP model. Measuring 2.2km in length, the Thu Thiem 4 Bridge will link HCMC’s District 2 and District 7. Design work for the bridge has yet to be completed.
The work for the Thu Thiem 4 Bridge project is being overseen by the Department of Planning and Investment in HCMC. Spanning the Saigon River, the bridge is expected to cost around US$223 million to build. The bridge will feature three lanes of traffic in either direction as well as facilities for pedestrians and cyclists, while it will have a design life of 100 years.
Vietnam’s Ministry of Transport meanwhile is working on plans for no less than eight sections of the North-South Expressway project. The eight sections are from: Phan Thiet to Dau Giay; Vinh Hao to Phan Thiet; Cam Lam to Vinh Hao; Nha Trang to Cam Lam; Dien Chau to Bai Vot; Nghi Son to Dien Chau; National Highway 45 to Nghi Son; Mai Son to National Highway 45.
Work should commence in 2020 and be completed by 2022. These eight stretches of the North-South Expressway should cost $4.27 billion to build. (WorldHighWays)
Vietnam seeks 30% cuts in corporate taxes for small firms
Vietnam’s Finance Ministry is proposing a 30% corporate tax cut this year for businesses with annual revenue of less than 50 billion dong ($2.1 million) and fewer than 100 employees to help them recover from the virus outbreak, the ministry said on its website.
The proposed tax cuts are estimated to be worth 15.84 trillion dong, the ministry said. Small companies represent more than 93% of the 760,000 businesses in Vietnam, it said.
Finance Minister Dinh Tien Dung on Monday sought lawmakers’ approval for a proposed annual 7.5 trillion dong tax exemption for agriculture land use between 2021 and 2025, the ministry said in a separate post. (investing.com)
Vietnam to vote on EU trade deal this week
The National Assembly of Vietnam scheduled a vote on the long-awaited deal for Thursday. The European Union Vietnam Free Trade Agreement (EVFTA) is seen as one tool for the economy to recover from COVID-19, as well as a catalyst for labor and environmental reforms.
Businesses shut down for weeks, but reopening before most nations helped Vietnam lure foreign investment, like Apple’s first-ever decision to make an entirely new product in Vietnam, its latest headphones. The Southeast Asian nation reported no deaths from the virus and 325 cases, sparing it from the worst of the crisis, particularly as many neighbors brace for recession.
The deal, which is the EU's first with a developing nation, is expected to sail through Vietnam’s rubberstamp parliament and incentivize businesses to improve their product standards for export. Parliamentarian Hoang Van Cuong said the state should support businesses in making use of the deal.
“The government must make a list of exported goods to the EU market,” Hoang Van Cuong, a Member of Parliament representing Hanoi, said last week in a discussion to tee up the vote. “These goods are required to meet EU standards.”
Should the trade deal take effect by July this year as expected, it would be the EU’s second in Southeast Asia, after one with Singapore.
(Voice of America)
Vietnam's Saigon aiport's terminal 3 set to reopen
Work is set to begin on the Tan Son Nhat International Airport’s third terminal in October 2021 and be completed in 2023. (VNExpress International)
Vietnam needs more digitalisation
Vũ Tiến Lộc, chairman of Việt Nam Chamber of Commerce and Industry (VCCI) told an online forum held in Hà Nội yesterday there can be positives to take from the pandemic.
“COVID-19 has been a catalyst that helps Việt Nam accelerate digitalisation of the economy, businesses, banks as well as e-commerce,” Lộc said.
Statistics showed the country now has 70 credit institutions and intermediaries unit such as E-wallets providing payment services online and through cell phone apps. The total value of digital financial transactions topped VNĐ7.3 quadrillion and 300,000 transactions via mobilephone so far.
Although there has been progress building a legal corridor for digital payment services, there were still obstacles in place. These have deterred digital payments from expanding quickly and easily to customers who prefer convenience, he said.
The Decision No 645/QĐ-TTg on the overall plan of the national e-commerce development in 2021-25 period targets to have 55 per cent of the country’s population shopping online and 50 per cent of small-and-medium sized enterprises having business activities on e-commerce floors by 2025. The targets required determination from firms and banks in promoting digitalisation and non-cash payment. (vietnamnews)
Vietnamese government positive about economic recovery
Despite a global economic crisis and likely recession in some of its neighboring countries, Vietnam aims for an economic growth of 5% this year. The ambitious goal was announced by Vietnam's Prime Minister Nguyen Xuan Phuc during a recent online conference with thousands of foreign and local business representatives.
The ambitious goal is significantly higher than the prediction of the International Monetary Fund (IMF), which announced that it's expecting Vietnam's gross domestic product (GDP) to grow 2.7%. Even that prediction puts Vietnam ahead of its neighbors and ensures that the country will continue to be Southeast Asia's fastest growing economy. The forecast growth rate, however, is in stark contrast with the 7% expansion of 2019. (Deutsche Welle)
Trade pact with EU vital for Vietnam`s recovery
The trade pact with E.U. could help the Vietnamese economy recover from pandemic impacts by boosting trade and creating jobs, the government says. It made the observation Wednesday while submitting the EU-Vietnam Free Trade Agreement (EVFTA) to the National Assembly for ratification. Lawmakers will discuss the trade pact starting Wednesday and vote on it on May 28.
Industry and Trade Minister Tran Tuan Anh said that the EVFTA, which eliminates 99% of import duties for both parties in 10 years, is an opportunity for businesses to recover production with new supply chains to replace old ones disrupted by the pandemic.
Vietnam will be able to diversify its export markets and reduce dependency on a particular group of markets, he added. (vnexpress.net)
Vietnam tries to lure tourists with discounts
Vietnam recorded a 98% fall in visitors this April compared to 2019 because of the coronavirus pandemic, but its success in fighting the virus, posting only 324 cases and no deaths, now sees it set to breathe life back into its tourism industry. Vietnam will be one of the first Southeast Asian nations to start to revive its economy, but with a ban still in place on foreign visitors, and many of their major tourist markets under lockdown, hotels and resorts are discounting paradise to make it more attractive to local travellers. (CNA)
Thai craft beer 'made in Vietnam'
Factories are not the only business moving into Vietnam — Thai craft beer has found an unlikely home in the neighbouring country, thanks to stiff regulations that keep small players from entering the market back home.
Sporting very Thai names like Mahanakhon, Krung Thep and Khao San, Thai craft beers often appear foreign in their own country because of the obtrusive import sticker and "Made in Vietnam" (or a number of other countries) printed on the side of the bottle.
Thailand's creaky beer regulations stipulate that new players entering the market must brew at least 10 million litres of beer each year and have over 10 million baht in capital, an impossible bar for small brewers to enter the market and protecting the duopoly of ThaiBev, the maker of Chang, and Boon Rawd Brewery, which makes Singha and Leo.
While Thailand used to have a larger underground craft brewing scene, many have gone overseas to brew their beer legally after a few high-profile arrests by the Excise Department. And increasingly Vietnam is offering the best mix of price, quality and logistical options. After import tariffs, excise tax and cold storage shipping costs, many beers become unaffordable to the average consumer in Thailand.
While Cambodia offers competitive prices and remains a popular destination for Thai brewers, irregular shipping schedules and fewer options in terms of ingredients and batch sizes make Vietnam a more attractive choice. (Bangkok Post)
Vietnam sees domestic tourists returning
Vietnamese flocked to scenic spots and beaches Saturday, leaping at the chance to travel as the communist government eases restrictions on domestic movement to revive a tourism sector devastated by the coronavirus. Hundreds waited to get on tourist boats to visit the famed karsts of the UNESCO heritage site of Ha Long Bay with few following social distancing norms. Most removed face masks as they climbed on board and posed for selfies. The tourism take plummeted to $340 million in the first four months of the year, according to government statistics, down 45 percent year-on-year. Doors remain closed to foreign travelers, but authorities are turning to the domestic market of millions wearied by long weeks of self-isolation and travel bans to get the tourist economy moving again. In 2019, Vietnam received more than 18 million foreign travelers, the majority from Asia. (Jakarta Post)
- EMEx classifies Vietnam 'lockdown' as Low because the government's recent decision to ease down many of the social restriction
The Ministry of Industry and Trade (MoIT) will continue to strictly manage rice exports through international border gates, said an official.
Tran Thanh Hai, Deputy Director of the MoIT’s Export-Import Department, said at the ministry’s regular press conference on May 15 that although rice is a key export staple, it is a must to ensure the country's food security.
The ministry will also coordinate with competent forces to increase inspections in order to prevent rice smuggling across borders, he said.
Statistics showed that Vietnam shipped abroad 2.1 million tonnes of rice valued at 991 million USD in the first four months of this year, up 1.1% in volume and 4.1% in value. (vietnamplus)
Vietnam will temporarily halt the consideration of new airlines until the aviation market has recovered from the COVID-19 pandemic, according to Minister of Transport Nguyễn Văn Thể.
The ministry said the virus caused the global aviation market to collapse and Việt Nam’s was no exception, which saw considerable drops due to restrictions in travel with all international and most domestic flights suspended in March and April to prevent the spread of the virus.
Priority would be given to recovering the aviation market, resuming flights and removing the difficulties of exiting carriers while the foundation of new carriers would only be considered after the market recovered, Thể said.
Three airlines were waiting to take off. Vietravel Airlines of tourism company Vietravel, Kite Air of hospitality group Thiên Minh and Vietstar Airlines of Vietstar Airlines Multirole Corporation were racing for permits. Previously, Vietnamese conglomerate Vingroup abandoned plans to launch Vinpearl Air, just months after announcing the new carrier. (vietnamnews.vn)
The Prime Minister has allowed the re-opening of sub-border gates and border crossings to resume trading activities between Việt Nam and China, according to the Ministry of Industry and Trade. The permission has been issued according to the proposals from the ministry and people’s committees of Lạng Sơn and Quảng Ninh provinces on restoring those activities to get back to normal at border gates between the two countries. They include Bình Nghi, Na Hình, Nà Nưa, Pò Nhùng and Bắc Phong Sinh sub-border gates and Ka Long border crossing. Meanwhile, the PM has also allowed the people's committees of border provinces to actively resume operation of other sub-border gates and border check-points in those provinces based on the local situation and the Government’s existing regulations on management of land border gates and border trade activities.
- EMEx classifies Vietnam 'travel restrictions' as Medium after government relaxed some restrictions
Vietnam’s Ministry of Finance has agreed to establish a research group charged with studying and making policy proposals regarding cryptocurrencies and virtual assets. The group, which was announced on Monday, will be comprised of nine members led by the vice chairman of the State Securities Commission, Pham Hong Son. The additional members include other representatives of the General Department of Taxation — the country’s securities regulator — the National Institute for Finance, the General Department of Vietnam Customs, and the Department of Banking and Financial Institutions of the State Bank of Vietnam. The research group will help the country stay abreast of new developments within the rapidly evolving blockchain sector, allowing Vietnam to respond to regulatory challenges with greater agility.
In August 2017, Vietnam’s prime minister approved a plan to oversee the development of a legal framework for cryptocurrencies by August 2018, indicating that crypto assets would be legally recognized within the country. However, on April 11, 2018, Bitcoin was outlawed as a means of payment — meaning that while individuals and businesses were still free to make private investments in crypto, digital currencies could not be used to purchase goods or services. (Coin Telegraph)
Authorities at kindergartens and primary schools in Vietnam took children's temperatures at the gates when they re-opened on Monday from a months-long closure over the coronavirus pandemic, following last week's partial re-opening of other schools. The school re-opening is Vietnam's latest step in lifting virus curbs, although international commercial flights and dance clubs and karaoke bars remain banned. Schools for older children reopened partially last week. (Jakarta Post)
Prime Minister Nguyễn Xuân Phúc has called for greater efforts to restart the national economy with the aim of achieving a GDP growth rate of over 5 per cent and keeping inflation under 4 per cent this year. PM Phúc announced the targets at a meeting with businesses on Saturday that was connected to 93 venues in provinces and cities across the country as well as ministries and sectors. It was also broadcast live by Vietnam Television (VTV). To that end, the PM ordered focusing on attracting investment from domestic economic sectors, firstly the private sector, and foreign direct investment (FDI), stepping up exports, promoting public capital disbursement, and encouraging domestic consumption. (Vietnam News)
After reporting yesterday on domestic travel, Vietnam carriers are also trying to resume international flights again. Vietnam's civil aviation authority (CAAV) is seeking government approval to partially resume international flights from June 1 to "revive the hit-hard aviation industry", online newspaper VnExpress reported on Friday. Vietnam has suspended international flights since March 25 and banned entry of foreign nationals since March 22 in an effort to curb the spread of the coronavirus. (theguardian.ce)
Members of the Vietnam Airlines Group, including Vietnam Airlines, Jetstar Pacific and Vietnam Air Service Company (Vasco) plan to increase the frequency of flights from May 16 to meet the increasing travel demand of passengers after the COVID-19 outbreak ends. The move is under the direction of the Ministry of Transport and the Civil Aviation Authority of Vietnam (CAAV), in which the domestic airway network is expected to be completely restored from June. The national carrier Vietnam Airlines will increase to 23 flights per day from the current 17 flights on routes between Hà Nội and HCM City, eight flights per day on routes between Đà Nẵng and Hà Nội and HCM City, seven flights between HCM City and Phú Quốc, five flights between HCM City to Hải Phòng, Thanh Hóa and Vinh, and one to four flights on the other routes. (vietnamnews)
Vietnam's economy may prosper again after social distancing measures were eased nationwide on April 23, according to the World Bank (WB)’s updated report on the country’s macro-economy for May released this week. The bank noted that after posting GDP growth of 3.8% in the first quarter of this year, Việt Nam’s economy then showed signs of recession in April, when the index of industrial production fell 13.3% month-on-month – the sharpest decline ever. Retail sales fell 9.6% year-on-year as consumers encountered many changes and travel restrictions. Meanwhile, passenger and goods transport contracted 27.5% and 7.2%, respectively. (The Star)
Commercial banks’ Q1 statements show a spike in debts overdue by 10-90 days as coronavirus impacts squeeze businesses’ cash flow. At Vietcombank, the country’s biggest state-owned lender by market capitalization, the debt almost doubled from the beginning of the year, while it rose 65% at the Military Commercial Bank (MB), a mid-sized state-owned lender. Some smaller private banks also reported higher increases in overdue debt. For instance, PGBank reported that its overdue debt more than tripled over the last three months, while Sacombank, a blue chip on the Ho Chi Minh Stock Exchange, said overdue debts rose 80% in this period. (VNExpress)
Tens of millions of students from kindergartens to high schools nationwide returned to school on May 4 morning after a three-month closure to prevent COVID-19 transmission. Among the 63 provinces and centrally-run cities in the country, 18 reopened all schools on May 4, and more than 30 others that have welcomed students between the sixth and 12th grades back since late April now continue to reopen kindergartens and primary schools. Meanwhile, more than 10 localities, including Hanoi and Ho Chi Minh City, will resume operations of primary schools and kindergartens later. (VietnamPlus)
Opinion: There are rumors that Vietnam wants an extra year as chair, to make up for the COVID-19 disruption. Would the rest of ASEAN agree to that? Inmany ways, this whole issue will be a test of whether ASEAN is prepared to reform. Up until the 1990s, the bloc’s foreign policy was mainly set by Indonesia, the region’s primus inter pares. Afterwards, ASEAN pursued a policy of consensus and equal decision-making, the so-called “ASEAN Way,” but that has only led to more divisions and weakened the bloc’s authority. For many analysts, Indonesia needs to retain the mantle as first amongst equals. Some believe that Vietnam stands a better chance at taking on this more assertive role. Giving Vietnam another year as ASEAN chair, then, would surely be a sign that the bloc is prepared to allow one state an oversized role in shaping the region’s policy. (The Diplomat)
Vietnam has largely lifted a nationwide lockdown to contain the new coronavirus, but events will be drastically curtailed when the country celebrates Reunification Day on Thursday. (Nikkei Asia Review)
Vietnam will end rice export restrictions from the start of May, bringing closure to a month-long saga that sparked fears over food protectionism and caused global prices to spike. Farmers in the Mekong delta, the country’s rice belt, have produced sufficient rice despite a drought, Prime Minister Nguyen Xuan Phuc said at a cabinet meeting Tuesday. Shipments will be allowed to return to normal, he said. “As well as food security, it’s necessary we ensure food exports are stable and guarantee the rights of rice farmers,” he added. (yahoo finance)
Vietnam issued Resolution No. 42/NQ-CP (Resolution 42) to help individuals and businesses affected by the COVID-19 pandemic. The Resolution consists of a financial package for those affected by the pandemic and targets six categories of individuals and businesses. For more info: Vietnam Briefing
Despite an impressive public health response, Vietnam is facing serious financial constraints in responding to the economic crisis. The country's ability to provide economic and financial support is severely limited. At the end of 2018 (the latest data available) the country's foreign-exchange reserves ran to just 2.5 months of imports. Vietnam's reserve adequacy runs to only 76% of the desired level according to the IMF. Over 40% of the Vietnamese government's total guaranteed debt is set in foreign currencies. Compared to other Southeast Asian countries, Vietnam has also delivered a very modest financial response to the crisis which runs to less than 1% of GDP. This is less than half what countries like the Philippines, Indonesia, or Malaysia are spending.
Confidence in the Vietnamese government is strong. A global research by Dalia concludes that only 13% of Vietnamese people think their government is doing too little in response to the COVID-19 virus. About 62% thinks the Vietnamese government is doing the right amount which is among the highest in all countries.
Vietnam said Wednesday it will end its nationwide social distancing measures to curb the spread of the coronavirus, except in some districts of Hanoi, after reporting no new cases for seven straight days.The restrictions on business and other activities imposed on April 1 will be largely eased from Thursday, according to a national steering committee for COVID-19 prevention.Vietnamese society must accept a "new normal" of living with the disease, Prime Minister Nguyen Xuan Phuc said, urging people to "wear masks in public, keep a reasonable distance and avoid crowded gatherings." The authorities in major cities announced that many measures won't be suspended right away but gradually phased out. (Nikkei Asian Review)
- EMEx classifies Vietnam 'lockdown' as Medium because the government's recent decision to ease down many of the social restriction
Only 3% of Vietnamese companies have applied long-term measures critical to their growth, like product innovation and research to make new products. While only 2% created risk mitigation businesses plans. According to analysts it shows that Vietnamese companies are not strong at implementing crisis strategies, meaning they require technical help to improve their capabilities in this area.
Vietnam’s civil aviation authority said on Tuesday it is seeking government approval to resume all domestic routes from Thursday after the expiry of a government order for seven more days of social distancing in some provinces.
The Ho Chi Minh City Department of Tourism said it has submitted to the State Bank of Vietnam a list of 31 travel and tourism firms that are seeking help to make it through the disruption caused by the COVID-19 pandemic. They want new loans, cuts in their bank loan interest rates and more time for repayment so that they could remain in business and keep their employees. The tourism industry is in urgent need of Government assistance to retain its workforce and recover as soon as the pandemic ends, Tran The Dung, deputy director of Young Generation Travel, said. Nguyen Quoc Ky, general director of Vietravel, said the industry, which has been accounting for more than 10-11 percent of the city’s economy for the last few years, needs a relief package from the Government. It is now difficult for travel firms to get loans from banks since most of them have no assets to mortgage, he said. Nguyen Thi Khanh, deputy head of the city Tourism Association, said the pandemic has crippled businesses and caused the loss of thousands of jobs. Businesses find it difficult to access aid packages from the Government and banks, she said. In the first quarter of 2020, 90% of more than 1,000 small and medium-sized travel businesses in the city stopped operations as the coronavirus brought tourism to a standstill. Businesses in the city expect losses of trillions of VND in the second quarter. (vietnamplus)
The National Assembly of Vietnam will consider and very likely ratify the free trade agreement between Vietnam and the European Union (Evfta) when it holds its 7th Session next month. Parliamentary sources acknowledges this Thursday that this will be one of the main topics to be addressed by the Parliament when it meets from 20 to 25 May under very special conditions - through videoconferences - due to the Covid-19 pandemic. On that occasion, the legislature will also surely give its approval to the Investment Protection Agreement between Vietnam and the EU (Evipa). The leaders of the Communist Party, the State and the National Assembly have on numerous occasions expressed their determination to ratify the two treaties as soon as possible. On 12 February last the European Parliament ratified the Evfta with 407 votes in favour, 188 against and 53 abstentions, and the Evipa with 401-192-40, a result that Vietnam interpreted as a clear sign of the EU's confidence in the strength of its economy and its capacity for integration. Both agreements were signed in Hanoi in June last year. A joint statement issued at the time called the first one 'the most ambitious free trade agreement between the EU and an emerging economy' and stressed that it is based on a mutual commitment to move towards 'open, fair and rule-based trade liberalisation and economic integration'.
Vietnam is donating 200,000 domestically made medical masks to the U.S., which has seen deaths from the novel coronavirus gone up to 30,000. The masks are worth at least $100,000, the Ministry of Foreign Affairs said in an official statement. The gift to the U.S., Vietnam’s largest single export market, follows similar mask donations to other countries, including Russia, France, Italy and Cambodia. Vietnam delivered 450,000 medical protective suits made by DuPont Inc.’s Haiphong facility to Dallas, Texas earlier this month. The mask give-aways come as Vietnam’s garment industry shifts from making shirts and skirts to medical protective gear as the virus’ spread has led to slowing orders from the U.S. and Europe. (Bloomberg)
Vietnam has urged Southeast Asian leaders to set up an emergency fund to tackle the coronavirus at an ASEAN Plus summit held online on Tuesday, as the pandemic ravages the region’s tourism and export-reliant economies. Hanoi is chairing an Association of Southeast Asian Nations (Asean) meeting on Covid-19, with the country touting its accomplishments so far in containing the corona virus with extensive quarantines and social distancing.
An innovative measure to help the poorest in Vietnam. Automated machine dispence rise to many of whom have been left jobless because of the 15-day lockdown. The machine in Ho Chi Minh City was thought up by a Vietnamese enterpreneur, Hoang Tuan Anh, and provides rice 24/7. The most vulnerable have access to a 1.5kg bagful of rice from a small silo. Similar machines have been placed in other big cities like Hanoi, Hue, and Danang.
Vietnam coffee producers face serious problems. Some traders claimed they can't fulful their signed contracts because of supply disruption while others stocked up as they anticipated problems. Farmers refused to relase beans at low prices in March so many orders can still be fulfilled. Indonesia producers are about to release fresh beans in May heavily competing with Vietnam's coffee market.
Vietnam's Bamboo Airways and VietJet Air resume domestic flights starting Thursday 16 April. Vietnam ordered curbs on domestic flights and adopted social distancing nationwide for 15 days. The Hanoi-Ho Chi Minh City route will be resumed first and other operations follow on Monday 20 April according to Bamboo Airways. Budget carrier VietJet Air will also resume its flights on Thursday but warned customers the schedule is only an expected one and might be subject to change.
The Vietnamese government has approved a 62 trillion dong financial support package for lower-income groups and businesses affected by the pandemic. The measures included monthly allowances of up to 1.8 million dong and interest-free loans for companies to pay employees' salaries.
An unexpected Asian challenger to China´s monopoly in corona diplomacy; Vietnam. By donating medical supplies to Europe, the USA and Southeast Asia, the country has received praise from all over the world. Vietnam, despite its lack of resources compared with its giant neighbour, has donated 550,000 face masks to France, Germany, Italy, Spain and Britain, and 390,000 to neighbouring Cambodia and 340,000 to another neighbour, Laos. It has also capitalised on the U.S. government’s purchase of 450,000 made-in-Vietnam DuPont hazmat suits by expediting the shipment of the protective equipment, and using it to highlight its medical donations in public statements and state media. Vietnam is lightly affected by the virus outbreak and currently bracing for a second wave. But it is also beginning to look ahead to a revival of economic activity. Key will be an EU-Vietnam Free Trade Agreement (EVFTA) which will be ratified later this month by Vietnamese National Assembly. Vietnam can now produce 12.72 million masks a day according to the government. (Reuters)
Vietnam has approved a plan to slow the collection of 180 trillion dong ($7.6 billion) worth of taxes and land rent to help businesses hit by the new coronavirus. The government will delay the collection of value-added tax, corporate income tax, personal income tax and land rent for five months for various businesses and households, it said in a statement. (National Post)
Vietnam's national carrier Vietnam Airlines will limit the number of passengers on flights to the country's southern Ho Chi Minh City starting Monday 6 April until Wednesday 15 April. The move is to avoid overcrowding at the domestic terminal of Tan Son Nhat Airport, where COVID-19 tests are compulsory for all passengers, the news agency reported, adding that the airline's flights to Ho Chi Minh City with Boeing 787 and Airbus A350 will serve a maximum of 180 passengers and those using Airbus A321 will serve no more than 120 passengers. Vietnam Airlines already announced that it had adjusted the frequency of flights from the capital Hanoi and Ho Chi Minh City to the central city of Da Nang.
Vietnam reported no new COVID-19 case on Sunday. The country was already showing a lower rate of infections over the past week. The Vietnamese government was one of the few countries in Southeast Asia that acted immediately when the virus started to spread by implementing social restriction measures and putting income travelers into quarantine.
The biggest listed company from Vietnam, Vingroup, will produce ventilators for the fight against the virus in its automobile and smartphone establishments. It entered into a licence agreement with Medtronic for the production. It would also produce low-cost open-source ventilators that are designed and spread by the Massachusetts Institute of Technology. Vingroup can make 55.000 units a month and could also produce for foreign markets.
Vietnam closes its borders with Laos and Cambodia to fight the spread of COVID-19. The country has announced to suspend cross-border activities at the most important border gates, secondary border gates, trails and entry points. Vietnam has also declared the crisis a nationwide epidemic and launched a nationwide social distancing campaign starting Wednesday 1 April. Gatherings of more than two people are banned and people are not allowed to leave their homes except for emergencies and to buy essential products like food and medicines. For a full update on Vietnam's regulation click here.
Ho Chi Minh City will suspend all public busses starting Wednesday 1 April until Wednesday 15 April. The country already suspended intercity transport between Hanoi and Ho Chi Minh City for two weeks. The national government has announced to ban all visitors to health establishments. A measure already undertaken by Hanoi, Da Nang and Ho Chi Minh City. The latter also suspended private clinics and cosmetic surgery, and physiotherapy has been reported.
Retail sales have been growing for 5 years straight. This march was the first reduction as a result of the COVID-19 crisis. Total retail sales were set around $16,4B USD which 4% less from the previous month and 0.8% less than the same period last year. Tourism revenue fell 44.7% month on month and 62.3% year on year. Accomodation and catering services also dropped double digits with 26.8%.
Vietnam has locked down one of its biggest hospitals and most important treatment centres for Covid-19 (coronavirus) after the nation's biggest cluster of cases was linked to the facility, the government said. Hanoi’s Bach Mai Hospital, which is home to the capital’s centre for treating tropical diseases, has been officially isolated. (The Star)
The Diplomat published an article how the COVID-19 crisis provides an opportunity for the CPV, Vietnam's rulling Communist party, to restore its own and the army's image. After receiving criticism from liberal forces how it handled several social and economic problems in 2019, including the dozens of dead immigrants who were found in Europe, it is now actively involved in containing the spread of the virus. An important tool for the government doing so is to welcome back Vietnamese who work in other countries. Also the security forces, on active duty despite the crisis, see their image being boosted.
The Vietnamese Dong has fallen 3% against the US Dollar but that is considerably better than most of its regional peers. The Indonesian rupiah slipped 19%, the Thai baht 11%, and the Malaysian ringgit 9%. The Philippine peso slipped 1% but is more stable due to the after-effects of a 34% depreciation in the last years. There were concerns for the Vietnamese dong after foreign investors agressively sold Vietnamese stocks last week.
Reuters reports that Vietnam has send tens of thousands of people to quarantine camps with waves of overseas citizens returning home to escape the virus. Click here for the article.
Prime Minister Nguyễn Xuân Phúc has ordered the shutdown of unnecessary services, especially restaurants and karaoke bars, to minimise large gatherings as part of measures to prevent further spreading of COVID-19. He also called on places of worship not to organise events with large numbers of people. Requesting stronger actions, PM Phúc ordered close control of exit and entry by road, railway and air be continued, concentrated quarantine pushed ahead regardless of how much it costs the State, self-quarantine ensured in line with regulations, and guaranteed safety for medical workers and other staff engaging in the work.
- EMEx classifies Vietnam 'lockdown' as Medium due to national extent of social restrictions
Provinces across the country have decided to close tourist attractions to stem the spread of coronavirus. Bắc Giang Province has closed its doors at tourist sites and ordered a temporary closure of entertainment venues. (Viet Nam News)
Vietnam has decided to cancel all flights carrying foreign visitors. No timeframe has been given. The flagcarrier Vietnam Airlines already decided before to suspend all international flights till at least Thursday 30 April.
Cambodia has decided to temporarily close its border with Vietnam over COVID19 fears. Entry of Vietnam citizens by either road, water, or air has now been prohibited. (Viet Nam News)
Vietnam Airlines announced to suspend all 2-way routes starting Saturday 21 March to Tuesday 31 March. Southeast Asia routes including Singapore, Thailand, Indonesia, Laos, Cambodia and Myanmar will be suspended from March 21. The British and Japanese routes are halted in both directions from March 23. Departures to Germany and Australia will be paused from March 24, and returns from March 25. Vietnam Airlines also suspended flights between Việt Nam and China, Hong Kong, Macao, South Korea, France, Russia, Malaysia and Taiwan. (Viet Nam News)
Vietnam will stop issuing new visas to all foreign nationals for 30 days starting Wednesday 18 March. A few exemptions are made. The government of Vietnam also announced a series of social restrictions over the last months, including early closure of public outlets in major cities such as Hanoi and Ho Chi Minh City.
- Please click here to read what public restrictions have been implemented in Vietnam
- EMEx classifies Vietnam 'travel restrictions' as Severe because visitors of all nationalities are heavily affected
- EMEx classifies Vietnam 'lockdown' as Medium due to limited extent of social restrictions
Focus on further strengthening Brunei, Indonesia education ties
Avenues to develop multifaceted bilateral cooperation between Brunei and Indonesian universities such as joint research cooperation in agriculture, environment, energy and infrastructure were among the matters explored at the recent sharing sessions between the Ambassador of the Republic of Indonesia and lecturers from local higher education institutions.
Some of the ongoing/completed research projects to date include the smart farming project between Universiti Teknologi Brunei (UTB), Telkom University and Indonesian Institute of Sciences (LIPI) and Bridge Infrastructure monitoring project between Universiti Brunei Darussalam (UBD), UTB, Telkom University, Bandung Institute of Technology and Warwick University.
The delegation of six Indonesian professors made up of lecturers from UBD and UTB led by Deputy Dean (Research) Faculty of Engineering of UTB Professor Dr Yulfian Aminanda was received by Indonesian Ambassador to Brunei Darussalam Dr Sujatmiko for the session at the embassy last week.
Accompanying the Ambassador were staff members from the economic, consular, defence, labour, political, and social and culture divisions at the embassy. “We are eager to listen to insights on how to further enhance bilateral cooperation between Indonesia and Brunei particularly from the perspective of academics who have gained wide experience by working both in Indonesia and Brunei and who understand the potentials and challenges involved in developing this cooperation,” Dr Sujatmiko said in his welcoming remarks.
During the sharing session, Dina Shona Laila from UTB underlined the need for more scholarships to entice Bruneian students to study in Indonesia and vice versa. (Borneo Bulletin)
Brunei government releases first digital economy masterplan
The government’s Digital Economy Council has launched its first five-year masterplan towards transforming Brunei into a Smart Nation.
The Digital Economy Masterplan 2025, which was unveiled on Thursday, outlines strategies for Brunei to become a Smart Nation that has a digital and future-ready society, vibrant and sustainable economy as well as a conducive digital ecosystem.
The masterplan listed 17 projects that are expected to be implemented in the next five years, including the public transport information system, national business service platform, school network infrastructure and halal certification system.
These projects are expected to have a significant impact on economic growth through the implementation of digital transformation, the Ministry of Transport and Infocommunications (MTIC) said in a statement.
The Digital Economy Council will focus on the implementation of projects under nine priority clusters, which are:
Logistics and transportation; Energy; Business services; Tourism; Financial services; Health; Agri-food; Education and Halal. (Scoop)
Brunei rolls out tracing app
The government rolled out its BruHealth contact tracing app on Thursday following the easing of COVID-19 restrictions.
Owners of six types of businesses – driving schools, gyms and fitness centres, indoor and outdoor sports facilities, golf courses, restaurants, cafés and food courts as well as stalls and markets – must download the app on Apple’s AppStore or Google Play Store and register before they are allowed to reopen.
During a press conference, Second Finance and Economy Minister YB Dato Seri Setia Dr Hj Mohd Amin Liew Abdullah said businesses will be issued a specific QR code, which must be printed and pasted at the entrance of their premises.
The minister said 230 vendors have registered for the QR code to date. Within hours of the app being released, there were over 10,000 downloads on Google Play Store.
App users, including employees and customers, must scan the QR code every time they enter or leave business premises, allowing authorities to track potential carriers of COVID-19.
The app generates a five-colour ranking system that denotes whether the user can move freely in the country. Users with green or yellow health codes can enter the premises while those with red, blue and purple health codes will not be granted access to public spaces. (Scoop)
Brunei plans to partially reopen schools starting June 2
Brunei will restart in-school learning on June 2 for students who are sitting for public exams, the education minister announced in a press conference on Thursday. Students in Year 6, 8, 10 Express, 11, 12 and 13 will be the first group to return to schools in the first phase of reopening, while other pupils will continue with online lessons, YB Dato Seri Setia Hj Hamzah Hj Sulaiman said. The partial resumption of schools comes nearly 11 weeks after all public and private schools, including sixth form centres as well technical and vocational education institutions, were shut to halt the spread of COVID-19.
The government started relaxing COVID-19 restrictions last week as the number of coronavirus cases has slowed in Brunei over the past month. Teachers will conduct face-to-face learning from June 2-13 in the first phase of school reopening, after which the education ministry will decide whether to expand the number of returning students in the next phase. YB Dato Hj Hamzah said each phase of the school restart will be announced every two weeks to avoid public confusion. Schools will be given the authority to determine the number of students who will attend lessons in classrooms and those who are allowed to learn from home if they have internet access and video conferencing tools. Reassuring parents that it is safe for students to return to schools, the minister said schools have been working behind the scenes to ensure safety guidelines are observed. (TheScoop)
Brunei's de-escalation plan
Brunei Darussalam yesterday announced the first phase of the de-escalation plan to lift the COVID-19 restrictions by introducing a gradual reduction in social distancing measures. The announcement was made yesterday by Minister of Health Dato Seri Setia Dr Haji Mohd Isham bin Haji Jaafar, at the daily press conference at the Ministry of Health (MoH) building.
He stated, “Taking into account the COVID-19 situation in Brunei Darussalam which is currently under control, and with the consent of His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah ibni Al-Marhum Sultan Haji Omar ‘Ali Saifuddien Sa’adul Khairi Waddien, Sultan and Yang Di-Pertuan of Brunei Darussalam, the MoH has announced the reduction of the social distancing measures implemented following the COVID-19 outbreak in the country since March 2020. (Borneo Bulletin)
Brunei is deciding on which premises it would re-open first when restrictions imposed following the Covid-19 outbreak are lifted.Minister at the Prime Minister’s Office and Minister of Finance and Economy II Dr Awang Mohd Amin Liew Abdullah various ministers would be consulted before a final decision is made.“It is a major decision that needs the involvement of most ministers, ” he said at a press conference at the Ministry of Health (MoH) building on Wednesday (May 13).Dr Awang Mohd Amin added that they will begin with premises deemed to be of a lower risk, along with conditions.Giving an example, he said: “If the seating capacity is 100, it will be limited to a certain percentage of that total capacity, on top of having to fulfil certain criteria, such as reporting on the conditions of employees. (The Star)
The world’s first international hydrogen supply chain between Brunei Darussalam and Japan reached a milestone after successfully extracting H2 from a liquid organic hydrogen carrier (LOHC) shipped from Brunei, the Ministry of Energy said on Monday (May 11).
The demonstration project is operated by the Advanced Hydrogen Energy Chain Association for Technology Development (AHEAD) led by the Japanese consortium, which includes Japanese conglomerates Mitsubishi, Nippon Yusen, Mitsui and Chiyoda Corp.
The project is in line with His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah ibni Al-Marhum Sultan Haji Omar ‘Ali Saifuddien Sa’adul Khairi Waddien, Sultan and Yang Di-Pertuan of Brunei Darussalam’s vision for advancing long-term green energy programme of the nation, as delivered in the New Year 2020 titah. (The Star)
Brunei announced a reduction of annual commercial property tax of up to 50%, aiming to support local businesses to offset the financial impact from the COVID-19 epidemic. Brunei's Minister of Home Affairs Haji Awang Abu Bakar said that with the consent of Sultan Haji Hassanal Bolkiah, the annual commercial property tax will be slashed up to 50% to business landlords, who are willing to give rental discounts to their tenants this year, as part of an economic stimulus package that was announced earlier. (Xinhua Net)
The Brunei Government has announced new protocols and measures on cross-border travel for transport companies and runners including limiting travel time and deploying tracking bracelets to prevent the spread of Covid-19. All items brought in by transport operators and runners into the country must be kept or quarantined for 72 hours or three days at the respective companies’ premise before they can be delivered to customers, it said in a statement today. It said the new rules and guidelines were effective from tomorrow and applies to companies registered in Brunei and Malaysia and for runners providing cross-border services or transportation of goods for commercial or personal use. (Borneo Post)
The Ministry of Health (MoH) will launch a nationwide survey from Monday (May 4) to extend Covid-19 (coronavirus) surveillance among citizens and residents of Brunei. The survey, to be conducted for a week, is open to anyone visiting selected health centres where the survey is conducted. The survey involves taking blood samples which is similar to that of a blood sugar test at home. The result will be available in 15 minutes. (The Star)
Ghanim International Corporation has collected over 500kg of 40 varieties of fruits and vegetables from local farmers and market vendors in Tutong and Belait to be supplied to supermarkets as part of their Buy Local Produce campaign. Close to 60 vendors dropped off their produce at the Seria wet market and Tutong’s Serambangun over the past two weeks, which Ghanim purchased outright and then sold to supermarkets who either arrived later to pick up or had the items delivered to them. (Biz Brunei)
Brunei said it will not halt oil production after the recent massive plunge in oil prices on the global market, but is it considering curbing output in line with a formal agreement between the OPEC+ oil exporter cartel, a group of OPEC allies led by Russia and comprising Brunei, Oman, Bahrain, Malaysia, Azerbaijan, Kazakhstan, Mexico, Sudan and South Sudan. Brunei’s finance and economy minister Awang Haji Mohd Amin Liew bin Abdullah said on April 21 that there was “obviously an oversupply situation” on the world market which was significantly affecting demand. However, he said that after he had a discussion with Brunei Shell Petroleum, the country’s largest oil producer, production will be continued while the government will make sure it maintains a diversified portfolio of buyers, mainly from Asia-Pacific and north Asia. (Investvine)
State-owned Ghanim International Corporation (GIC) will be helping farmers and market vendors sell their produce to supermarkets and eateries to help prevent losses incurred from the closure of several marketplaces due to the COVID-19 outbreak. Second Finance and Economy Minister YB Dato Seri Setia Dr Hj Mohd Amin Liew Abdullah said the Buy Local Produce campaign has already drawn 54 farmers and market vendors from Tutong and Seria with four supermarket chains signing on to purchase from them. Farmers, market vendors, supermarkets, eateries and other retail establishments are encouraged to participate. “The main objective of the campaign is to ensure that the income of farmers and vendors is maintained during the temporary closure (applying to the Belait and Tutong markets),” said the minister in a press conference. The initiative will also ensure regular supply of local fruits and vegetables which will help stabilise prices and encourage farmers to continue planting. (BizBrunei)
Minister at the Prime Minister’s Office and Minister of Finance and Economy II Dato Seri Setia Dr Awang Haji Mohd Amin Liew bin Abdullah announced during a press conference that there is obviously an oversupply situation following a question on whether the recent plunge in Brent Blend crude oil prices have affected Brunei. The minister added that trading for May cargo will be continued regardless and trading for the June cargo to begin today, mentioning that the COVID-19 pandemic is affecting demand especially in the US, which will have implications on other benchmarks. “Production will be continued in Brunei and I’ve had a discussion with Brunei Shell Petroleum Co Sdn Bhd (BSP) on this matter as well, and this is the time when you really need to make sure that you always have a diversified portfolio of buyers, ” said the minister. He explained that Brunei’s buyers include countries in the Asia-Pacific region where China has aided in some of their factories and buyers from North Asian countries and their surrounding regions. “So production will continue as I think we will still be able to sell our cargo and the question is not about whether you can sell, I think it’s about what price we will sell at, ” said the minister. “In the crude oil market, the prices will be determined later.”
BIBD’s virtual marketplace, Community for Brunei, went live at 7pm today as the country’s first integrated e-commerce platform with zero costs for micro, small and medium enterprises (MSMEs) to do business on. 43 MSMEs in food and beverage, handcrafted products and services – part of BIBD’s CSR initiatives and The Collective’s network – have on boarded the platform, with vendor applications for their “online Gerai Ramadhan” open from April 10 to 13. The Community for Ramadhan project is targeting 250 F&B vendors said BIBD’s Chief Marketing Officer Hjh Nurul Akmar Hj Mohd Jaafar in a press conference today. All platform fees will be waived for the first three months, allowing vendors to keep 100% of their sales. Hjh Nurul said rates after three months would be discussed with vendors. (Biz Brunei)
Brunei has announced that starting from Thursday, all foreign visitors arriving in Brunei must bear the cost of Covid-19 testings, which is at 1,000 Brunei dollars (US$700) per person. (The Star)
Down somewhat from 9.3 percent in 2017, the latest labor force survey in Brunei showed that the unemployment rate hit 8.7 percent in 2018, which was still the highest unemployment rate in Southeast Asia, the Asia Development Bank (ADB) said.
Brunei online shop Weelago is gaining traction as a trusted e-commerce platform for Brunei distributors and manufacturers for providing integrated end-to-end solutions from online payment to marketing. Weelago has recently onboarded over 20 businesses, including Brunei’s only pharmaceutical producer Simpor Pharma – whom they are the exclusive online retailer for – as well as established distributors Guan Hock Lee and Chop Kian Chuang and electronics retailer CF King. With the public advised to limit their travel during the COVID-19 outbreak, Weelago announced an increase in popularity – especially for personal hygiene items – selling over 1,000 bottles of hand sanitisers in less than two days. The website currently lists over 2,000 items for sale covering furniture, groceries, packaged food, fashion and health and beauty.
Sultan Haji Hassanal Bolkiah underscored the need for Asean solidarity in facing the unprecedented challenges brought by COVID-19, while delivering a speech on Tuesday morning in a video conference for the Special Asean Summit on Covid-19. “Complementing each other’s efforts, as well as sharing information, experiences and measures taken are important in strengthening ASEAN’s coordination, in order to control the spread of the pandemic in the region. Equally important is managing public information to avoid panic and counter false news, ” told the King of Brunei, through a video link from Baitul Mesyuarah, Istana Nurul Iman. “During this difficult time, it is imperative for ASEAN to work together to keep economic activities alive and also learn from this crisis to be better prepared for future health emergencies. Enhanced cooperation across all Community Pillars is necessary to strengthen ASEAN’s resilience, ” said the monarch. He also highlighted the urgency for accelerating intra-ASEAN trade in preparing the region for post-COVID-19 recovery. (The Star)
Brunei Darussalam, along with other Southeast Asian countries, will endure a growth slowdown in 2020 due to COVID-19 and a consequent global slump, especially given their strong trade and investment ties with a slowing People’s Republic of China. Brunei Darussalam’s gross domestic product (GDP) growth is forecast to continue to grow above trend, albeit at a slower pace at two per cent this year, before picking up to three per cent next year (2021), according to the Asian Development Outlook (ADO) 2020, the Asian Development Bank’s (ADB) annual flagship economic publication, released recently. Drop in oil prices, travel bans and border closures have hurt the tourism industry. Liquefied natural gas and crude oil prices are expected to drop in 2020, owing to weak global demand, which will weigh heavily on export earnings. In 2021, anticipated recovery in liquefied natural gas and crude oil prices should, along with exports from a newly-built fertiliser plant, will support export growth, said ADB. (Borneo Bulletin)
Brunei is going to conduct random tests on foreign workers to track the spread of the COVID-19 virus. The ministry argues that 25 out of 135 cases in the country are foreigners including some migrant workers. Brunei's Home Affairs Ministry announced on Monday that Ramadan bazaars typically held at different locations across the country during the Muslim holy month, which is coming soon, will not be organized this year, as part of measures to battle the spread of Covid-19. Brunei's Religious Affairs Ministry has said that the closure of all mosques, suraus and prayer halls is extended for one week more until April 13.
Five new features are going to become available in the new and recently launched artificial intelligence (AI)-powered web application www.healthinfo.gov.bn on Thursday 2 April to further aid the Health Ministry in combating the spread of Covid-19 in Brunei Darussalam. Minister at the Prime Minister’s Office and Minister of Finance and Economy II Dr Awang Mohd Amin Liew Abdullah highlighted the new features during the joint press conference at the Al-‘Afiah Hall of the Ministry of Health on Wednesday. The minister said the additional features will include SMS Authentication, Direct Reporting Tool, Health Education Tool and FAQs, Government Press Statements and Covid-19 Activity Traces (Hotspots). Users will be able to see an added security feature on the new landing page where they will be prompted to key in a mobile phone number to authenticate and a verification code will be sent via SMS. The minister said both local and international numbers are accommodated especially for those visiting Brunei and have yet to obtain a local phone number. After entering the verification code, users can input their name, along with their Identification Card number for Brunei residents holding the yellow, green or red ICs, or passport number for non-residents, and sign up to proceed. (The Star)
The Ministry of Education (MoE) announced on Wednesday (March 25) that online teaching-learning for primary and secondary schools, sixth-form centres, vocational institutions and the Institute of Brunei Technical Education under the MoE; schools under the Ministry of Religious Affairs; and private schools will begin on March 30. (The Star)
Starting Tuesday 24 March, all foreign nationals are barred from entering or transiting in Brunei Darussalam. This covers land, sea, and air routes. This affects the visa on arrival, application for visit, student and dependent visas. Permit letters for visit, student, and dependent visa issued are also suspended. Everyone already in possession of a valid visa is advised to postpone their travel to Brunei.
At the same time, special consideration will only give by the Immigration and National Registration Department subject to important matters. The application can be made to the department by downloading the special form via www.immigration.gov.bn and emailing it to . For details, the public can contact the department via 2383106 or via their website www.immigration.gov.bn. (The Star)
Biz Brunei reports: Brunei has suspended all applications for foreign workers into the country starting Saturday 21 March. Manpower required for critical operations is exempted. All foreign workers who are now in their home countries have to delay their travel to Brunei until further notice.The suspension affects the following:
- LPA applications for foreign workers, including those made before March 21, 2020
- Applications to recruit domestic workers, including those made before March 21, 2020
- Applications for work visas, including those made before March 21, 2020
- Work visa authorisation letters issued by the Immigration and National Registration Department
- Work visas issued by embassies and high commissions of Brunei abroad
The government of Brunei announced several new travel restrictions according to The Star. "Brunei citizens, permanent residents (PRs) and foreigners holding valid identification cards (ICs) are not allowed to leave the country starting on Monday (March 16) except for medical treatment, attend court hearing or studies overseas. Any travels are subject to approval from the Prime Minister’s Office." Those who wish to travel will need to write an email to with the scanned documents to obtain permission from Prime Minister’s Office. Everyone who attended the tabligh gathering in Malaysia's Kuala Lumpur on March 5-8 is required to undergo immediate testing for Covid-19 at the Sports Complex of the Raja Isteri Pengiran Anak Saleha (RIPAS) Hospital. All new measures come in addition to the earlier announced travel bans for visitors coming from China’s Hubei, Jiangsu and Zhejiang provinces as well as Italy and Iran. The government also made 4 categories on countries affected by the COVID-19 virus with different implications per category. Those can be visited on the website of the Department of Health.
- EMEx classifies Brunei 'travel restrictions' as Severe because visitors of all nationalities are heavily affected
- EMEx classifies Brunei 'lockdown' as Low because no serious restrictions have been put in place besides health screenings and guidelines
Cambodia’s Central Bank Rolls Out Blockchain Payment System Whitepaper; It's Not A CBDC
After three years of development, the Cambodian national digital currency may be out later this month, according to a recently released whitepaper.
The permissioned blockchain-based payments system differs from the central bank digital currencies, also known as CBDCs, being offered by several states, including China and Russia, the paper states. (Bitcoin Exchange Guide)
Visitors to Cambodia must pay $3,000 deposit
Travellers entering Cambodia will be required to pay a US$3,000 deposit by cash or credit card for “Covid-19 service charges” at the airport upon arrival, and have $50,000 in travel insurance cover, the government has announced.
A message posted on the Twitter account of the Office of the Prime Minister and dated June 16 contains a detailed list of related charges approved by the Ministry of Health and the State Secretariat of Civil Aviation.
Upon arrival at the airport, travellers will have to pay a $5 charge for transport to a testing centre, followed by $100 for a Covid-19 test. An overnight stay at a stipulated hotel or “waiting centre” while waiting for results costs $30, and a further $30 per day is charged for three meals.
Other charges include $15 for laundry, $5 daily for medical surveillance and $3 for security services.
The remainder of the deposit will be returned provided the passenger, and the rest of the people on their flight, have negative test results. Even so, they must self-isolate for 14 days after arrival in their chosen accommodation.
Travellers must report daily to medical officers and undergo a second Covid-19 swab test on the 13th day. A valid health certificate to leave the country will cost another $30.
The charges apply to all travellers except those on diplomatic or official government business, authorities said.
A traveller who tests positive and shows symptoms requiring hospital treatment will be taken to a state hospital and undergo up to four tests for Covid-19 costing $100 each. Should the traveller die, a funeral and cremation will cost $1,500.
All of these costs will also be automatically deducted from the $3,000 deposit. (Bangkok Post)
More jobs in Cambodia as Vattanac opens USD87m brewery
Vattanac Brewery Co Ltd’s plan to launch a new US$87mil brewery in the capital has been approved by the government in a move aimed at increasing local production and reducing imports.
Vattanac Brewery is a subsidiary of Vattanac Group, the conglomerate behind the Vattanac Capital Tower – the “iconic”, dragon-backed, glass skyscraper on Monivong Boulevard in Daun Penh district’s Wat Phnom commune.
The brewery is located in Prek Eng commune’s Roboh Angkanh village in Chbar Ampov district, east of the Bassac River, and will create 899 jobs, the Council for the Development of Cambodia (CDC) said in a statement on Sunday (June 14).
Ministry of Industry, Science, Technology and Innovation spokesman Heng Sokkung told The Post on Thursday that the project comes after the success of the company’s first brewery, which produces many well-known brands such as Tiger, Heineken and Black Panther. (The Star)
EU set to reject Cambodia tariff relief plea
Cambodia's garment industry, already pummeled by the coronavirus pandemic, is set for a "one-two punch" after the European Union signaled it will not suspend its decision to curb trade privileges for the vital sector. The EU announced in February that it will suspend duty-free access for 40 products from Cambodia, effective Aug. 12, because of "systematic" human rights violations. Lobby groups representing garment businesses and manufacturers earlier this week called for the EU to postpone the tariffs by at least 12 months because of the dire threat posed by the COVID-19 induced global slowdown.
The new tariffs will hit about 20% of the country's exports to the bloc or some 1.1 billion euros ($1.19 billion). The targeted goods, which include some items of clothing, footwear and travel goods, were previously included under the Everything But Arms (EBA) scheme, which grants developing countries duty-free access for all products except weapons and ammunition. (Nikkei Asian Review)
Cambodia to lose $3bn in revenue from tourism sector
Cambodia will see a huge loss in revenue generated from tourism sector of around US$3billion this year due to the pandemic spread, according to Tourism Minister Thong Khon.
Thong Khon said during the launch of additional safety measures for tourism-based business that the global virus has hit the tourism sector the hardest around the world and Cambodia will see it’s foreign and local visitors decline by about 70% and 50% respectively this year, causing the country to lose $3billion, the Khmer Times reported on Friday.
During the first four month, Cambodia welcomed 1.16 million foreign visitors, a decline of 52% compared with the same period last year, according to the minister.
The Tourism Ministry this week has introduced additional safety measures for hotel and guesthouse, restaurant, transportations and resorts to contain the pandemic spread after signs of that tourism activity is rebounding.
So far around 2,956 tourism-related business in Cambodia has been closed, leaving a further 45,405 people unemployed, according to the minister. (Bangkok Post)
Cambodia’s milled-rice exports soar 42% in first five months of 2020
Cambodian milled-rice exports to the international market in the first five months of this year skyrocketed 42 percent to 356,097 tonnes from 250,172 tonnes during the same period last year, said a report from the Secretariat of One Window Service for Rice Export Formality.
The European market accounted for 122,010 tonnes, up 51.10 percent year-on-year from 80,749 tonnes, the Chinese market 136,825 tonnes, up 25.26 percent, Asean countries 45,825 tonnes, up 45.39 percent, and other destinations 51,437 tonnes, up 79.40 percent.
Fragrant rice accounted for 289,287 tonnes, or 81.24 percent, white long-grain rice 62,779 tonnes and long-grain parboiled rice 4,031 tonnes.
(The Business Inquirer)
COVID-19 Epidemic Poses Greatest Threat to Cambodia’s Development in 30 Years
The COVID-19 pandemic is hitting Cambodia’s main drivers of economic growth—tourism, manufacturing exports, and construction—which together account for more than 70 percent of the country’s growth and almost 40 percent of paid employment. As a result, the economy in 2020 is expected to register its slowest growth since 1994, contracting by between -1 percent and -2.9 percent, according to Cambodia in the Time of COVID-19, the World Bank’s latest Economic Update for Cambodia.
Poverty in 2020 could increase among households involved in key sectors like tourism, construction, trade, manufacturing and the garment industry by between 3 to 11 percentage points higher than at baseline, or in the absence of COVID-19. The fiscal deficit could reach its highest level in 22 years.
The collapse of growth drivers has hurt economic growth and put at least 1.76 million jobs at risks. The report also warns that capital inflows are tapering off, which in turn is triggering the easing of real estate market prices, likely ending the construction boom. With the current large outstanding credit to the construction, real estate, and mortgage sector, nonperforming loans could rise. (Modern Diplomacy)
Cambodia eases restrictions on sport
The Cambodian Government on May 26 decided to relax the ban on sports activities after the COVID-19 situation in the country had shown improvement.
Cambodian Minister of Education, Youth and Sports Hang Chuon Naron said in a statement that sports activities are now allowed to resume, but without spectators.
Besides, officials and athletes have to strictly comply with health recommendations such as there must not be more than 100 people each game, and athletes must not hug or shake hands with one another after scoring a goal. Sports facilities and equipment must also be disinfected before training sessions or competitions. (The Cambodia Daily)
Cambodia keeps exporting bicycles to the EU
With coronavirus having a positive knock-on effect for cycling and bicycle purchases, Cambodia has also seen an upsurge in bicycle exports in the beginning of this year. According to Cambodia’s Chamber of Commerce, “the country exported almost half a million bicycles to the EU, worth about 109 million euro in the first quarter of the year, which is over 9 million euro more than the same period last year.”
Currently, Cambodia is by far the biggest exporter of bikes to the European Union 28 member states. The country’s duty-free export status to the EU has allowed it to take top position. Despite the uncertainties regarding the future of this export status, industry experts suggest that the coronavirus outbreak will continue to have a positive effect on the country’s bicycle production.
“Bicycle exports will continue to increase in the second quarter, buoyed by a heightened aversion to public transport. Cycling as a workout option is also not likely to decline anytime soon,” Lim Heng, Cambodia Chamber of Commerce vice-president said. (bike-eu.com)
Cambodia approves five projects to create jobs for locals
The Council for the Development of Cambodia (CDC) has recently approved five investment projects worth 174.8 million USD that are expected to generate 2,458 jobs for locals.
The projects include the construction of a five-star hotel and facilities serving solar power production in the provinces of Preah Sihanouk, Kampong Speu, Battambang, and Svay Rieng.
Investment pouring into the country amid the spread of COVID-19 manifests investors’ confidence in the country’s macro-economic conditions and political and social stability. (Cambodia Daily)
Cambodia to test all incoming travelers
Cambodia has relaxed travel restrictions on foreign visitors as the country reports that its public health measures so far have successfully contained the spread of Covid-19.
According to the official statement issued by the State Secretariat of Civil Aviation of Cambodia, new measures came into effect 20 May.
The statement confirms that Cambodia has lifted the ban on foreign nationals from Iran, Italy, Germany, Spain, France and the US.
But measures continue to apply for travellers arriving in the country, including the requirement for on-site PCR swab test.
Both Cambodian and foreign nationals must present a medical certificate indicating their Covid-19 negative status, issued by competent health authorities of their residing country no more than 72 hours prior to the date of travel.
Foreign nationals must provide proof of an insurance policy with a minimum medical coverage of not less than USD50,000 valid for the intended duration of stay in Cambodia. (TTRW)
Cambodia lifts entry ban for 6 countries
Cambodia has lifted a ban on entry of visitors from Iran, Italy, Germany, Spain, France and the United States that had been put in place to curb the spread of coronavirus, the health ministry said on Wednesday.
Despite the easing, foreign visitors would still need to have a certificate no more than 72 hours old confirming that they are not infected with the novel coronavirus and proof of $50,000 worth of health insurance while in Cambodia, the ministry said.
They also would be quarantined for 14 days after arrival at government designate place and tested for the coronavirus, a ministry statement said, but did not specify where.
“All passengers, both Cambodian and foreign, who are travelling to Cambodia, are admitted to waiting centres for the COVID-19 tests and that they are waiting for results from the Pasteur laboratory,” Health Minister Mam Bunheng said in a statement, referring to respiratory disease caused by the coronavirus.
- EMEx classifies Cambodia 'travel restrictions' as Medium as a result of non-universal restrictions
Cambodia's oil production troubled by crisis
The coronavirus pandemic is expected to slow the development of the Apsara oilfield located at Cambodia’s offshore Block A of the Khmer Basin in the Gulf of Thailand, which is being developed by Singapore-based KrisEnergy Ltd.
Ministry of Mines and Energy’s General Department of Petroleum director-general Cheap Sour told The Post on Monday that the global epidemic was slowing progress, but the company is currently still developing the project.
“The company is still working hard to get the job done, but it’s difficult for the company due to the Covid-19 predicament. Even sending technicians to the minimum facilities platform construction has proven difficult and operations at the site have stalled,” said Sour. (Cambodia Daily)
Cambodia keeps casino's shut
The Vietnamese government last week announced that non-essential businesses – except for discotheques and karaoke lounges – may reopen; several sports activities and events with large gatherings may be allowed; and seating capacity limits on flights, trains, ships, and buses etc can be lifted.
The Company’s Star Vegas Casino operations in Poipet, Cambodia, however, have remained temporarily closed in line with Government restrictions. The Cambodia government’s had issued announcement mandating the temporary closure of all casinos from April 1 until further notice.
Donaco’s largest business is the Star Vegas Resort & Club, a successful casino and hotel complex in Poipet, Cambodia, on the border with Thailand. The firm said the closure has a material impact on its business. (khmer times)
Cambodia lifts ban on rice exports
Cambodia as lifted its ban on rice exports as concerns mount of an oversupply in the domestic market. The ban was initially imposed on April 5 due to fears of food supply shortages amid the Covid-19 pandemic, although it allowed contracts to be honoured. The government announced yesterday that the private sector could resume the export of white rice to the international market from May 20. This comes after a request to lift the ban was made by the Cambodia Rice Federation (CRF). The lifting of the ban also comes as the Philippines seeks to import an additional 300,000 tonnes of milled rice from major producers in Southeast Asia. (New Straits Times)
Cambodia's new US$880 million airport near the historical site Angkor Wat is expected to be completed in three years.
Construction of the Siem Reap International Airport project began in March and will be the largest airport in Cambodia.
According to Angkor International Airport Investment (AIAI), which is constructing the airport, the new airport will be located 51km southeast of here and 40km from Angkor Archaeological Park, covering an area of around 700ha.
Khmer Times reported that during a meeting between State Secretariat of Civil Aviation secretary Mao Havannall and AIAI director Lu Wei, it was announced that the construction of the new airport began on March 15 this year and would take 36 months to complete. (New Straits Times)
Cambodia's shadow puppet tradition goes back to the 7th century and has survived the collapse of empires, wars and Khmer Rouge reign of terror that left some 1.7 million people dead.
In recent years, however, local interest in the art that was designated a UNESCO intangible cultural heritage in 2005 has dwindled, with foreign tourists and funding becoming its main supporters.
Now, the coronavirus pandemic has dealt one theatre in Phnom Penh a new blow, bringing the curtain down on a troupe and its leader who has been performing in the capital for more than 26 years. Read the full coverage in the New York Times.
Asia Times published a concerning article on Camabodia that despite reporting fewer coronavirus cases than most of its neighbors, could be among the region’s biggest Covid-19 losers due to economic and financial contagion effects.
The country’s most crucial business sectors, including tourism and garment manufacturing, have ground to a virtual halt since the pandemic first emerged in China in January and thereafter spread worldwide.
Cambodia’s tourism industry, which usually contributes around one-third of gross domestic product (GDP), is now dead in the water due to the lack of mainly Chinese tourists, who make up the bulk of visitors.
Air passenger numbers fell by more than 90% in April, according to the State Secretariat of Civil Aviation, while ticket sales at Cambodia’s world famous Angkor Wat temples fell by 99.5%.
Cambodia’s other vital sector, apparel manufacturing, the largest contributor to economic growth, has been hit by a double whammy as raw material imports dwindled because of virus-caused supply chain problems in China, and then as Western brands cancelled orders en masse as the pandemic took hold in Europe and the US.
More bad economic news is on the way. An International Monetary Fund (IMF) worst case scenario forecast made in April projected a possible economic contraction of 1.7% this year, representing potentially the first year of negative growth since the late 1980s. (Asia Times)
Minister of Education Hang Chuon Naron said on Monday (May 11) schools will reopen only when the Kingdom and countries in the region have gotten the Covid-19 pandemic under control. Speaking in a video interview published by the Ministry of Education, Youth and Sport (MoEYS) on Saturday, Chuon Naron said to avoid a second wave of infections, it will wait until the government declares that the country is 90-95% safe, if not 100 per cent. Asked why the ministry delayed school reopening when only two out of a total of 122 Covid-19 patients remain hospitalised, he said safety is the top priority. (The Star)
Thai conglomerate CP Group will oversee popular convenience store chain Seven-Eleven's Cambodian debut in 2021 under a master franchise agreement with 7-Eleven Inc., a U.S. subsidiary of Seven-Eleven Japan Co. CP All Public Co., the agricultural conglomerate's retail arm, has concluded a deal with the U.S. firm to operate a Seven-Eleven store chain through CP All (Cambodia) Co. beginning in 2021. The first Seven-Eleven outlet will open in Phnom Penh. CP All launched Seven-Eleven store operations in Thailand in 1989 and operated a network of around 12,000 outlets as of March this year, the second largest after that of over 20,000 stores in Japan, Seven-Eleven Japan said in a statement on Thursday. (Mainichi.jp)
On April 17, 2020, Cambodia’s Ministry of Tourism (MOT) and the Ministry of Labor and Vocational Training (MLVT), issued MOT Letter 11 and Instruction No. 045/20, respectively, which provides additional measures to support businesses and employees in the tourism and garment industry. MOT Letter 11 extends the number of cities in which businesses in the tourism sector can apply for tax exemption, while Instruction No. 045/20 sets out the obligations that businesses must adhere to in order for them to suspend employment contracts. This includes assisting employees in applying for the government monthly allowance. The country previously issued tax breaks and holidays on February 25, 2020, to counter the economic impact of COVID-19. These incentives mainly covered the industries that are vital to the economy, namely garments and textiles, tourism, and agriculture. Investors should seek the assistance of dependable advisors to help them understand how they can benefit from these incentives. (ASEAN Briefing)
Despite all the obstacles brought by the COVID-19 pandemic, the construction of the first expressway in Cambodia continues to make headway day by day under a joint effort made by Chinese and Cambodian workers. Connecting the capital city of Phnom Penh and the deep-sea port province of Preah Sihanouk in southwestern Cambodia, this 2-billion-U.S.-dollar Chinese-invested expressway is expected to become the artery of Cambodia’s economy. (Cambodia Daily)
Local and foreign carriers are moving to resume flights out of Cambodia, as the country works to overcome the impact of the coronavirus pandemic. Carriers such as Cambodia Angkor Air, China Airlines and EVA Air have resumed flights to and from the Cambodian capital of Phnom Penh, while major operators such as Cathay Pacific, Emirates, Thai Airways International and Qatar Airways plan to resume flights to Cambodia in June and July, a 5 May report from Phnom Penh-based English language newspaper Khmer Times says. Earlier this week on 4 May, the Khmer Times reported that based on data provided by Cambodia’s State Secretariat of Civil Aviation (SSCA), the number of passengers flying to the country had dropped “more than 90% as of April this year”, although the report did not specify a figure. (Flight Global)
Cambodia received 1.15 million international visitors during the first quarter (Q1) of 2020, down 38.5% due to the impact of Covid-19 (coronavirus) outbreak, according to the latest report released by the Ministry of Tourism on Monday (May 4). China, Vietnam, Thailand, the United States and South Korea were the largest sources of foreign tourists to the South-East Asian country during the January-March period this year, the report said. In March alone, Cambodia got 223,400 foreign tourists, a decrease of 65 percent over the same month last year, it added. (The Star)
King Norodom Sihamoni of Cambodia has cancelled the ploughing ceremony that was supposed to be held on May 10. Thailand, that would organize the same event on May 11, has suspended the event. The ploughing ceremonia is an annual celebration for the start of the rice planting seasons and to predict if the next season will be splendid. Cambodia always chooses another province for the province while Thailand traditionally organizes it in a big rice field, Sanam Luang, next to the Grand Palace. Where Thailand proposed an alternative, Cambodia did not. (The Cambodia Daily)
Cambodia exported 122,094 metric tons of milled rice to China in the first four months of 2020, an increase of 28% over the same period last year. China is still the top buyer of Cambodian rice during the January-April period this year. (The Star)
Minister of Public Works and Transport, Sun Chanthol has requested the US Ambassador to Cambodia Patrick Murphy, to consider providing assistance in the ports sector, transportation, land infrastructure and railroad. Mr Chanthol said this during his bilateral talks with Ambassador Murphy on Thursday and in addition he requested support for capacity building for the Ministry’s technical and expert officials on road construction. He said the United States can assist the ministry’s officials on training and exchange tours between the Los Angeles Port and Cambodia’s Sihanoukville Port.
Acting head of state Say Chhum promulgated the controversial state of emergency legislation into law on Wednesday, despite severe concerns over its ability to abuse citizens’ human rights and freedoms. The Royal Decree dated April 29 announced the promulgation which was signed by Say Chhum because King Norodom Sihamoni and Queen Mother Norodom Monineath are on a medical visit to China. The draft legislation has been criticized by domestic and international rights groups for giving the government sweeping powers to curtail civil rights and liberties, such as freedom of movement, expression, association, and assembly – all enshrined in the Cambodian Constitution. (VOA Cambodia)
The Ministry of Interior’s General Department of Immigration (GDI) has announced that it would not grant visa extensions to foreigners staying in Cambodia if their names are not listed on the Foreigners Present in Cambodia System (FPCS) by July 1. Foreign nationals can register in the system online. (The Star)
The China-Cambodia community of shared future will bring vigorous development in all fields to Cambodia, Cambodian Deputy Prime Minister Hor Namhong said in an exclusive interview with Xinhua on Tuesday (April 28). As April 28 marks the first anniversary of signing the action plan for building a community of shared future for China and Cambodia, Namhong said Cambodia is the first country that has signed this initiative with China, and it is a roadmap for the two countries to live together as a community. Through this action plan, the two countries have agreed to share common development and to discuss comprehensive and practical cooperation under the framework of the Belt and Road Initiative (BRI), he said. (The Star)
The Cambodia Logistics Association (CLA) has voiced concern over the quality of the logistics and transport sector stemming from the COVID-19 pandemic and has said that a few logistics companies are now bankrupt. Sin Chanthy, president of CLA told Khmer Times that the outbreak of COVID-19 has affected all sorts of businesses; especially logistics and transportation globally including Cambodia. He said that this sector has been continuing to suffer significantly. “The CLA is asking for more collaboration from the government and relevant stakeholders to solve all the issues during the hard-hit situation,” Sin said. (Khmer Times)
Cambodia’s exports to Thailand skyrocketed in the first three months of this year, although the two countries have faced strict movement of cross-border trade because of the deadly COVID-19 pandemic. From January to March this year, Cambodia’s total exports to the neighbouring country were valued at $612 million, a 115 percent increase compared with the same period a year before. (Khmer Times)
Cambodia is trying to spur its economic activity by licensing new investment projects. Two of such programmes have been approved totalling a worth of $3.6m in capital and will create 525 jobs for locals. The projects cover the production of doorframes, windows, plywood, and pet foods and materials. The new industries are also used to diversify the economy away from its reliance on the garment industry.
Cambodia's construction and real estate sector will be hit hard this year. Many projects are postponed or cancelled completely. Construction is very important for Cambodia and the sector underwent a true investment boom in the previous year. Investment in the Kingdom’s construction sector reached $11.4 billion last year, an increase of 98.74 per cent compared to $5.3 billion in 2018, said a Ministry of Land Management, Urban Planning and Construction report.
The government of Cambodia has issued a three month tax exemption for hotels, guesthouses, restaurants, and travel agencies in the capital Phnom Penh and several provinces. The tourism sector of the country is is hit hard. The exemption is from March to May this year. Besides Phnom Penh the measures apply to Siem Reap, Preah Sihanouk, Kep, Kampot, Bavet City and Poipet City.
Cambodia has suspended mail to all countries due to the pandemic situation. With international carriers not flying it is difficult to get the mail around. The post office did not confirm when it is resuming the international service again according to local news.
Cambodia’s Ministry of Labor and Vocational Training has instructed enterprises, business owners and travel agencies in five provinces to prepare the proper forms for the suspension of employment contracts. This, it said, will make it easier for the ministry to transfer $40 a month to workers and employees via Wing (Cambodia) Limited Specialized Bank. On April 7, Prime Minister Hun Sen announced changes in the allowances for temporarily laid-off garment workers from receiving 60 percent of the minimum wage to a flat $70. Of the figure, $40 will come from the government and $30 from factory employers. Along with the change, the Garment Manufacturers Association in Cambodia (GMAC) requested the ministry to issue concrete instructions around the procedure to give out the allowance. Some workers had claimed they had yet to receive the $40 from the government. An instruction letter issued by the ministry dated on April 17 said for the government to provide the $40, employers or owners of factories, enterprises and establishments in the textile, garment and footwear sectors have to follow the procedure mandated by it. The letter confirmed that employees in the tourism sector who are in Phnom Penh, Siem Reap, Preah Sihanouk, Kep and Kampot provinces and out of work because hotels, guesthouses, restaurants and travel agencies were affected by the Covid-19 pandemic were subject to the same conditions. (inquirer.net)
The Senate of Cambodia has passed the law on the state of emergency. The bill will give the government and Prime Minister Hun Sen more powers. It also curbs the opposition and freedom of expression in the country provoking angry reactions from human rights organizations. The government can enact the state of emergency in time of great danger. Critics argue that although better coordination and use of power is necessary, this state of emergency only benefits the position of the government and can have long term consequences.
The International Monetary Fund (IMF) has forecasted that Cambodia’s Gross Domestic Product (GDP) will experience a negative growth of 1.7 percent in 2020 due to social distancing measures to contain the COVID-19 pandemic. If the prediction comes true, the Cambodian economy will grow negatively for the first time since IMF began assessing the economy in 1988. In a more optimistic scenario, IMF believes that if COVID-19 vaccine is produced and used in the second half of this year, the global and Cambodian economies will increase 5.8 percent and 6.1 percent, respectively. (Cambodia Daily)
Cambodia extends ban on passengers from Spain, Italy, France, Germany, the United States and Iran. Cambodian citizens must not travel to Europe, the USA and Iran unless mandatory. All national and sub-national level officials are banned from attending meetings in those regions.
Khmer Times: Fashion brands are asking the European Union (EU) to postpone the partial withdrawal of tariff preferences granted to Cambodia under the EU’s Everything but Arms (EBA) trade scheme because of the impact of the COVID-19 pandemic. The European Branded Clothing Alliance (EBCA) has asked the EU to delay the move which it agreed in February following a long review into what it described as systematic human rights violations. Cambodia is due to lose about 20 per cent of the rights it enjoys under the EBA scheme – the equivalent of €1 billion ($1.1 billion) in exports – when zero duties on goods including apparel revert to a standard 12 per cent in August.
Cambodian Parliament passed a law on Friday to allow a state of emergency, which Prime Minister Hun Sen has said he might have to declare to reinforce the campaign against the virus that has infected 120-odd people in Cambodia. Yet the garment sector—the economy’s $7 billion backbone that provides about 850,000 jobs—will be kept open, with workers increasingly fearful for their health on packed factory floors yet unable to quit as the breadwinners for struggling families. The garment sector contributes about 40 per cent of Cambodia’s gross domestic product, and recent World Bank forecasts show growth slumping to 2.3 per cent or worse for 2020—down from the 7 per cent average.
Cambodia's Parliament has approved a law yesterday to pave the way for a state of emergency, which Prime Minister Hun Sen has said he might have to declare to reinforce the campaign against the coronavirus. Human rights groups say an emergency would give sweeping powers to Mr Hun Sen, whom Western countries have long condemned for crackdowns on opponents, civil rights groups and the media. The law gives the government the power under an emergency to monitor communications, control media and social media, and prohibit or restrict distribution of information that could generate public fear or unrest, or that could damage national security. "The purpose of making this law for Cambodia is not unique, as there is this law already in many other democratic countries," said Ministry of Justice spokesman Chin Malin. "The law is intended to protect public order, security, people's interests, lives, health, property and the environment." Cambodia reported one new coronavirus case yesterday, taking its confirmed tally to 119, the Health Ministry said. Mr Hun Sen was initially sceptical about the threat posed by the coronavirus but cases have been rising and, in recent weeks, the government has ordered restaurants, bars and casinos to close as well as limited entry visas for foreigners. Mr Hun Sen has said he might need emergency powers to help stem the outbreak. His party holds every seat in the 125-seat National Assembly and all members present voted to adopt the Law on Governing the Country in a State of Emergency. Rights groups say the law contains broad and vague provisions that would violate fundamental rights and could be misused against critics. It provides for prison terms of up to 10 years for anyone convicted of obstructing the authorities or not respecting government measures, leading to unrest or affecting national security. (The Straits Times)
The Cambodian government issued an order banning travel throughout Cambodia for a week. The measures includes travel in and out of the capital Pnom Penh during the Khmer New Year festivities when Cambodians traditionally travel back to their families to spend the holidays.
Hang Chuon Naron, the Cambodian minister of Education, Youth and Sports, announced that secondary and high schools exams will be postponed. A new date will be announced at a later time. All students are advised to conduct self-learning at home by using textbooks and e-learning. Programs like E-School Cambodia and Wiki School system are among the recommended tools.
The Cambodian Prime Minister Samdech tech Hun Sen has said that mutual help between Cambodia and China will bring bilateral relations to new heights. It underlines the increasing independence of ASEAN countries, not the least Cambodia, on China's economy.
Cambodia also announced to ban the exports of rice and fish. The government wants to ensure that there are no shortages of the staple foods within the country. Hun Sen also asked Cambodians to start planting vegetables and other crops to supply local markets. Expensive gourmet varieties of rice are exempted from the export ban. The government also said that the Lunar New Year holiday, scheduled for Monday 13 April until Thursday 16 April, has been canceled. Cambodians need to stay at home and advoid gatherings. The break might be replaced at a better time.
Cambodia has reported no new COVID-19 case for two days straight. The government and Ministry of Health believes that it gives cause for optimism. Critics however suggested that Cambodia is not testing enough and that the government acted way too late.
The World Bank has approved a $20m USD credit for the Cambodia COVID-19 Emergency Response Project. The fast-tracked financing will help Cambodia battle this global health emergency by sourcing medical supplies and facilities to diagnose and treat COVID-19. It also helps by reducing the spread of infection, strenghtening pandemic response capabilities, and shortening the time to recovery for both people and the economy. The financing will help Cambodia to meet the targets in its COVID-19 Master Plan.
The Asian Development Bank (ADB) expects that GDP growth in Cambodia will be 2.3% for 2020 as a result of the COVID-19 crisis. If the crisis ends in June, Cambodia's economy can grow again with 5.7% in 2021. The ADB praised the government's wage support for garment workers and tax and credit relief for businesses. It also sorted out fiscal space to minimize the economic impact of this especially especially on the most vulnerable people, according to the report.
The Cambodia government announces that e-government will be a priority during the COVID-19 crisis. It wants to use digital tools to guarantee services remain in place and are timely and available. Building a digital government is the main focus for the government which will greate stronger, smarter, and a more accountable government according to the Cambodian Minister for Economy and Finance Aun Pornmoniroth. He added that the government already started working towards e-governance through implementing an online-based process for services within some departments. A significant part of the bureaucracy has to move online is the plan.
In Cambodia garment workers are striking over unpaid wages because of the COVID-19 outbreak. About 1000 garment workers protested outside a factory in the capital Phnom Penh. The trade union has said that the company involved is breaking the law by not paying its workers even if revenues are low for the moment.
Cambodia's casino's are closing starting Wednesday 1 April and rice exports are stopped by Sunday 5 April. No national lockdown or state of emergency has been declared yet. Especially Sihanouk and surroundings have experienced an economic boom as a result of casino's mainly spurred by Chinese investments and visitors. The stop on rice exports is important to guarantee local food security for the coming time.
The government announced it will suspend visa exemption policy and the issuance of tourist visa, e-visa and visa on arrival to all foreigners for period of one month. Any foreigner who wants to visit Cambodia must obtain a visa from a Cambodian mission abroad. The individual must provide a medical certificate no more than 72 hours prior to the date of travel. A minimum coverage of 50.000$ is also required. Diplomats and officials are exempted from these rules. The measure will be in effect starting Tuesday 31 March.
- EMEx classifies Cambodia 'travel restrictions' as Severe after the new travel regulations
Garment workers in countries like Myanmar and Cambodia are hit hard by the COVID-19 crisis. In Cambodia over 50 factories have filed for work suspension covering about 30.000 workers. The total may grow further due to the lack of raw materials and buyers. (Cambodia Daily)
The government of Cambodia is considering to ask King Norodom Sihamoni to place the country in a state of emergency. The announcement was made by prime minister Hun Sen. The government will not close markets, restaurants and small shops.
There is no official order so far but several ministries and institutions have been implemented work-from-home policies now. This includes the Ministry of Foreign Affairs and International Cooperation, Ministry of Economy and Finance, Ministry of Education, Youth, and Sports, Ministry of Industry and Handicraft, and Ministry of Commerce, as well as National Assembly. (KhmerTimes)
Cambodia has decided to temporarily close its border with Vietnam over COVID19 fears. Entry of Vietnam citizens by either road, water, or air has now been prohibited. (Viet Nam News)
The government extended the closure of karaoke clubs and cinema's. Also religious gatherings and concerts are not allowed for now. A day before the government announced the closure of educational institutions nationwide.
- EMEx classifies Cambodia 'lockdown' as Medium because of limited extent of social restrictions
The Cambodian government has banned entry of incoming travelers from Italy, Germany, Spain France, the US and Iran. Cambodia is one of the few countries that didn't bar entry for visitors from China. Also cruise ships are still prevented from entering the country.
- EMEx classifies Cambodia 'travel restrictions' as Medium as a result of non-universal restrictions
Singapore energy firm to build S$2.35 billion coal power plant in Laos
The government of Laos has approved the construction of the country's second coal plant, which will be carried out by a firm in Singapore, Evolution Power Investment Corporation (EPIC). This announcement came at a time when countries are gearing towards cleaner renewable energy sources and turning away from coal which is cheap but polluting. The plant will be located in the provinc of Sekong Laos media report. (Mothership)
Laos' super highway - the Vientiane-Vangvieng expressway is 70% complete
The construction of the 113.50km expressway linking Vientiane and Vangvieng is now over 70 per cent complete and authorities expect an official handover ceremony to take place at the end of this year.
Head of the Management Committee of the Vientiane-Vangvieng expressway, Khattiyasack Chaiyavong, told Vientiane Times.
“The project is now 71.03 per cent complete. We expect to officially hand it over and open the road to traffic before National Day on Dec 2 this year.
“We have laid the first layer of asphalt on more than 50km of the road and the excavation of a tunnel through Phoupha Mountain has been completed. We are currently installing electricity,” he said.
Construction of the expressway began at the end of 2018 and was initially scheduled to finish in 2021 but will be completed this year, Mr Khattiyasack added.
The road, which includes twin tunnels almost 900 metres long through Phoupha Mountain, will shorten the route by 43km compared to using the existing Road No 13 North.
People who use the expressway will be required to pay a fee, but can continue to travel on Road No 13 North free of charge.
The expressway toll will be 550 kip per kilometre, amounting to about 62,000 kip for a one-way trip between Vientiane and Vangvieng.
Chinese investors will operate the expressway under a 50-year concession agreement, with the total cost likely to be US$1.2 billion. The Laos government holds a 5 per cent stake in the project.
The expressway is being built parallel to Road No 13 North and the under-construction Laos-China railway. It will link Sikeuth village in Naxaithong district, Vientiane, to Vangvieng district.
Speeds on the expressway are designated at 100km per hour on flat terrain from Sikeuth village to Phonhong district in Vientiane province, and 80km per hour through the more mountainous section between Phonhong and Vangvieng districts.
With motorists able to travel at higher speeds on the expressway, officials say the journey between Vientiane and Vangvieng will be much quicker than at present.
A project development agreement was signed in 2017 during a state visit to Laos by Chinese President Xi Jinping.
The Vientiane-Vangvieng expressway is the first section of a planned expressway from the capital through the northern provinces to Boten in Luang Namtha province, which borders on China. (The Star)
Economic recovery in Laos will be a long road
Phnom Penh Post An employee invites customers at an open air restaurant on the banks of the Mekong river in Vientiane. The resumption of business is not a cause for celebration, but a time of great challenge for operators in the wake of their closure during the lockdown. AFP Economic recovery from the damage caused by the Covid-19 pandemic is a huge challenge for every country.
The global outbreak of the virus is creating massive losses. It has claimed thousands of lives and jobs, while services have been suspended, and production and exports curtailed worldwide.
Stronger action by governments to prevent the spread of and control the disease is the most effective way to protect populations. Governments are aware that the measures they impose will impact businesses and people’s lives, but they must be complied with.
The pandemic has forced countries to lower their predicted economic growth rates after businesses, which are key to economic growth, have been forced to suspend operations. This has particularly affected industry and tourism and has slowed imports and exports.
As control of the outbreak builds public trust in authorities, some countries, including Laos, have begun easing lockdown measures so that people can start to resume life as normal and businesses can reopen. Laos has relaxed measures in three phases since the nationwide lockdown began on April 1. (Phnom Pen Post)
Laos gradually reopens economy
The government has lifted more of the restrictions put in place to curb the Covid-19 outbreak, enabling people to gradually return to a ‘new normal’ based on Laos’ good track record in keeping the virus at bay. The Prime Minister’s Office on Friday issued an announcement detailing the restrictions that will be lifted during the period of June 2-30. Preschools, kindergartens, and the remaining classes of primary and secondary schools (whose final-year classes resumed earlier) – will reopen on Tuesday (June 2). Final-year classes at technical colleges, pedagogy colleges and universities can also reopen on Tuesday. But their remaining classes are instructed to reopen on June 15. Restrictions have been further relaxed given that there have been no new confirmed cases of Covid-19 in Laos for 49 consecutive days as of Sunday. Sixteen of the 19 people who contracted the virus and were hospitalised have been discharged while three remain in hospital. The transport of goods across international borders will return to normal. The government will permit the organisation of all forms of sport competitions, but no spectators will be allowed to attend. Night markets and cinemas can reopen, while investment projects, factories and businesses can resume operations as normal. (Vientiane Times)
ADB approves US$20m to support Laos emergency response to coronavirus
The Asian Development Bank (ADB) approved on Tuesday (May 26) a US$20mil loan to support Laos' response to the Covid-19 (coronavirus) pandemic, Laos News Agency (KPL) has reported.
The loan, as additional financing to the Greater Mekong Subregion (GMS) Health Security Project, will assist the Laos Ministry of Health in procuring personal protective equipment, laboratory equipment, testing kits, medical devices, and ambulances.
It will also help the Lao government provide supplies and training to frontline health workers on infection prevention and control, lab testing, and clinical care for Covid-19 patients.
It will also cover the government's costs for contact tracing, risk communications, and other interventions. (the star)
Laos farmers have difficulty exporting products
Farmers in Oudomxay Province are experiencing difficulty selling crops due to the economic crisis caused by the Covid-19 epidemic.
Two shipments of 2,593 tons have been exported successfully to China, while a remaining 3,627 tons of unsold surplus produce is left, after accounting for 10 percent of the crop that has gone bad and is no longer viable.
Since 17 May, farmers in Na Mor District, Oudomxay have been able to sell their crops, primarily pumpkins, to Chinese merchants who have recently been permitted to cross the border from China. (Laotian Times)
Laos schools reopen
The Laos government has announced all students nationwide can go back to schools on June 2, while final-year classes in primary, lower and upper secondary schools began on Monday. According to the latest announcement by the Prime Minister’s Office, issued on May 15, state and private kindergartens, primary and secondary schools, tertiary education institutions, colleges and universities are expected to reopen on June 2 with strict measures. Most primary and secondary schools that reopened on Monday have only allowed Grade 5 primary students and secondary students from Grades 4 and 7 back on campus as they have to prepare for tests to gain admission into higher education levels, colleges and universities respectively. School administrators must implement precautionary measures to prevent further outbreaks of the Coronavirus. This was the recommendation made by the Ministry of Education and Sports and the National Taskforce Committee for Covid-19 Prevention and Control on May 17. The measures for reopening schools include school administrators keeping their premises clean by cleaning classrooms and grounds and spraying disinfectant around their facilities to reduce the risk of infections.
Fitch lowers Laos ratings
Fitch Ratings has affirmed Laos' Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B-' and revised the Outlook to Negative from Stable. Click here for the full report.
Environmentalists have criticised Laos for pressing ahead with plans for another "destructive dam" on the Mekong River, a waterway already strangled by hydropower schemes.
The flow of the Mekong, Southeast Asia's longest river, is interrupted by a cascade of dams in China -- where it is called the Lancang.
Two downstream dams -- the Xayaburi and Don Sahong -- have been built in Laos, which wants to construct seven more as it strives to live up to its billing as the "Battery of Asia".
Water levels have dropped to record lows over the last year, exposing rocks and killing fish, a phenomenon blamed by villagers in Thailand and Laos on the operations of dams.
On Monday, Laos' communist government submitted proposals for the Sanakham dam -- close to the northeastern border with Thailand -- to the Mekong River Commission (MRC).
The MRC is a dam consultation body for Mekong nations, but has been accused of being toothless in stopping river projects sponsored by governments and big business. (France24)
Under fire for bullying neighbors in the South China Sea, China is patting itself on the back for the progress it is making on the 411-kilometer China-Laos railway through a sparsely populated nation that has barely been touched by the Covid-19 pandemic.
The official Xinhua News Agency reported on April 25 that all the beams are now in place for the 1,458-meter Luang Prabang cross-Mekong super-bridge, one of the biggest undertakings on a track that includes 169 other bridges and 72 mountain-blasting tunnels.
Construction resumed on the signature Belt and Road project only 23 days after Vientiane’s communist government closed its borders on April 1 with China, Thailand, Vietnam and Cambodia in response to the discovery of its eighth Covid-19 case. (Asia Times)
The ban on flights to Laos continues with no end date in sight as far as government announcements go. Lao Airlines, owned by the government, confirmed this week it had suspended plans to resume domestic flights 8 May. Travel professionals in the country hoped the return of domestic flights would help reboot confidence.
Airline officials said the decision to delay flights resumptions was part of the country’s measures to contain the spread of Covid-19. Meanwhile, a Facebook report posted on Thursday by the ‘Tourism Professionals in Laos’ group, noted that Luang Prabang’s tourist sites would also remain firmly closed. (TTRWeekly)
The government is considering measures to be included in an unemployment package to aid those who have found themselves jobless due to the Covid-19 pandemic. The taskforce for economic affairs was asked to revise measures for the relief of the unemployed at a Prime Minister and Deputy Prime Minister Meeting held recently.
The revised measures come after the National Economic Research Institute (NERI) urged the government to accelerate efforts to aid the jobless, saying state intervention is necessary after the lockdown forced many businesses to suspend operations, and furlough or retrench workers. The institute suggests unemployed workers registered under the social insurance scheme should receive benefits first, as they have already made contributions to state funds.
Following this, the institute recommends the government allocate funds for the relief of workers who are not registered under the social insurance scheme, including over 100,000 Lao laborers who have returned from Thailand and other neighboring countries due to the pandemic. The government has been advised to recommend laborers begin working in agricultural activities to support themselves and their families.
The Prime Minister stated in early March that people should begin growing crops and raising animals at home for their own consumption in case food supplies should run out amid the Covid-19 pandemic, adding that Lao people had “well-established traditions” in agriculture, and this would absorb the impact of international trade disruption if eventuated. (LaotianTimes)
The success of controlling the Covid-19 pandemic also meant that the government is easing up the tough measures and allowing establishments to kick-start their businesses. The Ministry of Information, Culture, and Tourism has released guidelines for operators of restaurants, resorts, and other tourism-related businesses in line with new regulations prescribed by the Prime Minister’s Office that are to enter into effect from May 5-17. The Ministry has outlined several recommendations for workers. Business owners must educate and inform all employees on proper prevention measures and other information on handwashing and monitoring of symptoms. Customers must undergo temperature screening as well. Those with body temperatures above 37.5 degrees celsius may not enter the business premises. The Covid-19 hotline must be contacted for further advice. Entertainment venues, beer gardens, bars, cinemas, karaoke venues, spa and massage parlors, casinos, night markets, indoor fitness gyms, outdoor team sports venues are prohibited from re-opening. Furthermore, weddings and other cultural events that necessitate a large number of participants are prohibited (the only exception is funerals, for which health guidelines must be followed). (The Star)
- EMEx classifies Laos 'lockdown' as Medium after full lockdown measures
The government of Laos said it will allow restaurants and shopping centers to reopen starting Monday as the country eases its lockdown after reporting no novel coronavirus infections for 19 consecutive days. Friday's notice came with caveats: people stepping outside must wear face masks and maintain a social distance of one meter, while travel across provincial borders remains forbidden. These new rules will be in place for two weeks through May 17, but a total lockdown will go back in force if new infections are detected in at least two provinces. (Nikkei Asian Review)
Lao Prime Minister Thongoun Sisoulith has advised the Ministry of Information, Culture, and Tourism to use its time wisely in refurbishing and upgrading tourism sites in preparation for the country’s reopening after the Covid-19 pandemic. The PM made the recommendation as he chaired the government ordinary meeting session held by video conference on 23 April. With the tourism sector in almost complete shutdown due to the pandemic, the PM’s suggestion is in line with advice given by the National Economic Research Institute (NERI), which submitted a report suggesting the government promote greater investment in tourism. (Laotian Times)
Despite the pandemic, Laos reports that works on an important bridge over the Mekong River are progressing. All the beams of the Luang Prabang cross-Mekong River super major bridge of the China-Laos railway are installed, according to its builder Laos-China Railway Co. Ltd. (LCRC). The beam installation puts the completion of the structure, the most expensive in Laos history, to more than 80%, the builder added.
The LCRC told Xinhua that with the last 32-meter prestressed T-beam steadily settling down on the piers on Thursday, the beam setting work of the bridge, undertaken by China Railway No. 8 Engineering Group (CREC-8) was successfully completed. The China-Laos Railway crosses the Mekong River twice to the north of the ancient Lao capital of Luang Prabang, some 230 kilometers (km) north of capital Vientiane. The continuous beam of the Luang Prabang Bridge was completed in July 2019, seven months ahead of schedule, while the installation of T-beam began on April 9. The Ban Ladhan cross-Mekong River super major bridge, also constructed by the CREC-8 closed its continuous beam on April 1. The Luang Prabang cross-Mekong River Bridge has a complete length of 1,458.9m and is composed of 28 span T-beams and six spans continuous beams. It is the most difficult and most technically complex bridge on the whole railway. (Manila Bulletin)
- This project is part of China's belt and road initiative. For our analysis of the impact on China's new silk road please click here.
The government of Laos is considering to ease some restrictions in the countries after 11 days without a new confirmed case of the coronavirus. Prime Minister Thongloun Sisoulith urged authorities to continue with the strict enforcement of measures for now. The government and the National Taskforce Committee for COVID-19 Prevent and Control will now identify low-risk, medium-risk, and high-risk areas for the virus. The different zones can each have their own level of restrictions and other measures. The Lao government earlier already announced to reduce and defer the payment of tax, customs, and other administrative fees during the coronavirus outbreak while the Bank of the LAO PDR will lower the basic interest rate. Commercial banks will be asked to extend the time required to repay loans and are to reduce interest rates charged to businesses. The National Taskforce Committee in charge of economic affairs will begin mulling medium and longterm measures to stimulate the economy and boost the private sector as well. A proposal was made at the cabinet meeting to reduce value-added tax on electricity and water utilities during the crisis period to reduce fees for consumers, however, the motion was not passed as it was feared the measure would affect revenue collection. (Laotian Times)
Residents of Vientiane Capital have taken to the road following the end of the Lao New Year holiday, despite an order from the Prime Minister to stay at home. Social media has been flooded with images of busy streets as Vientiane residents take to the road in clear violation of the national lockdown order. Laos went into full lockdown on 30 March, with measures prohibiting all residents to leave their homes except for essential grocery shopping, hospital visits, and any other tasks authorized by the government. Prime Minister Thongloun Sisoulith extended the lockdown period for Laos until 3 May under Prime Ministerial Order 06/PM. (Laotian Times)
The Lao government has ordered the temporary nationwide ban on the sale and distribution of all alcoholic beverages in the country for the time being. A notice has been released by the Prime Minister’s Office (PMO) instructing all local governors and the mayor of Vientiane Capital to strictly prohibit the sale and distribution of alcoholic beverages during the course of the Pi Mai Holiday. The new regulation is to take effect starting Monday 13 April, which coincides with the first day of the lunar New Year Holiday. The notice period will end at Monday 20 April. Distributors, supermarkets, convenience stores, wet markets, individuals, and other online commercial enterprises are forbidden from engaging in the sale and distribution of liquor, beer, and other alcoholic beverages. Violators will be punished within the provisions of the law.
Districts and villages nationwide have imposed travel restrictions to prevent the spread of Covid-19 among communities following the detection of 12 infections in the country. Prime Minister Thongloun Sisoulith issued an executive order last week to intensify measures to prevent and control the spread of the coronavirus. According to this order, people from all walks of life, including expatriates in Laos, are not allowed to go out of their homes or other accommodation for non-essential purposes from now till April 19. Authorities in the provinces, districts and villages are seriously implementing the travel restrictions in a bid to counter the pandemic. The head of the traffic group in the Sikhottabong district of Vientiane, Lieutenant Colonel Bounkhong Phetthalangsy, told Lao National Radio that in line with the Prime Minister’s Order No.6 for preventing and controlling the spread of the virus, authorities had been advising local residents and foreigners to stay at home. The district had set up temporary checkpoints since Friday to implement the precautionary measures and inform citizens about the dangers posed by the virus and ways to guard each other and their own health. (The Star)
Vietnam has assisted its neighbour Laos with medical supplies to combat the spread of COVID-19. A charter flight landed in the capital Vientiane carrying 333000 standard face masks, 1000 units of protective clothing, and medical equipment worth over $300000USD.
The Lao Asia Pacific Satellite (LaosAT), a joint venture between China and Laos, has donated 100 million kip (some US$11,000) to the Lao government to help fight the Covid-19 pandemic in the country. Somdy Douangdy, Lao deputy prime minister and chair of the Task Force Committee for Covid-19 Prevention and Control, expressed gratitude for the donation on Wednesday 1 April, and has said the Lao government will make full use of the donated resources to fight the pandemic. "China and Laos are a community with a shared future. I am grateful to Chinese government for sending anti-epidemic medical expert teams and medical supplies to Laos when Covid-19 was detected in Laos," Somdy added. (The Star)
Laos will enter a full lockdown starting Monday 30 March untill Thursday 19 April. Public servants (state workers) are to work from home April 1-11, and will be on holiday leave to observe the Lao New Year holiday until April 19, except for military and police officers, firefighters, water and electrical (utilities) company staff, media personnel, doctors and nurses, volunteers, and other individuals that have been authorized to remain at work to combat the spread of the disease. Everyone is prohibited to leave their homes or domiciles besides for buying essential goods, visiting hospitals, or perform tasks on behalf businesses permitted to remain open or to engage in various government authorized tasks. Agricultural workers may continue to engage in production in order to maintain their livelihoods. Village administrations must strictly oversee the implementation of these new regulations in order to monitor the number and scope of people outside at any given time. Traveling to provinces or areas known for infections is forbidden except for transporting commercial goods and to visit hospitals.
Borders are closed to anyone basically making traveling impossible.
The following businesses and services shall be allowed to remain open:
- banks, financial institutions, stock market, stock brokerages
- hospitals, medical clinics, pharmacies, rescue teams (emergency accidents)
- post offices, telecommunications providers
- utilities (electricity and water companies), waste disposal services
- agricultural markets, convenient stores, supermarkets, fuel stations, restaurants, and cafés
- Hotels and resorts may operate but must provide only accommodation and food service.
The above mentioned businesses must adhere strictly to the task force guidelines, including limiting and rotating personnel so as to lower the chance of infection between workers. The Prime Minister asked everyone to collectively follow the stipulations. (Lao Times)
- EMEx classifies Laos 'travel restrictions' as Severe
- EMEx classifies Laos 'lockdown' as Extreme after full lockdown measures
Lao Airlines is expected to resume commercial flights to Seoul, the capital of South Korea, starting in April. The news came as Lao Airlines has suspended all international flight.
The Prime Minister of Laos, Thongloun Sisoulith, said he asks all citizens to practice self-isolation and social distancing to protect themselves and loved ones. It is estimated that about 1000 Lao migrant workers per day try to get into the country from Thailand as usual. Laos monitors people who return home. Companies are asked to let people work from home when possible but there are no severe social restriction measures in Laos at the moment. (Laotian Times)
Laos has instructed businesses to not increase prices on consumer goods and services. All sectors have been ordered to take their responsibility by also prevent hoarding foods and essentials or distribute goods of unsafe and low quality.
Laos told tour operators not to organise package tours to countries where an outbreak has been reported. Foreign group tours are also prohibited from entering the country. The government asked all companies and organizations to assist with screening and checking of incoming travelers. The country has suspended mass gatherings, celebration of days of national importance, the 11th National Games, weddings and social events, and it will close kindergartens.
- EMEx classifies Laos 'travel restrictions' as Low
- EMEx classifies Laos 'lockdown' as Low due to limited extent of social restrictions and doubts around enforcement
Construction of Korea-Myanmar Industrial Complex to begin this year
Construction of the Korea-Myanmar Industrial Complex (KMIC) in Yangon is expected to commence before the end of the year despite the COVID-19 pandemic, Kim Gun-Woo, general manager of Korea Land and Housing Corporation representative office in Myanmar, told The Myanmar Times.
"According to our plan, we will be done with the detailed design in September, after which a tender to develop the project will be called in October. The winning bidder will be announced in November. We expect to begin construction in December," Mr Kim said.
The KMIC is being built as a 60-40 joint venture by government-owned Korea Land and Housing Corp and Myanmar’s Ministry of Construction. The Koreans will oversee the construction of the US$110 million industrial complex, which will take place across 555 acres of land north of Yangon, near Nyaung Na Pin Village in Hlegu.
Once it is completed in five years time, the complex is expected to serve as a physical platform for up to 200 businesses in textiles and garments, food and beverage processing, logistics, construction materials and assembly to operate.
Mr Kim said marketing and sales promotions to attract large South Korean companies to set up shop in the complex will begin next year.
The KMIC is one of the two largest projects between Myanmar and Korea, the other being the Dala Bridge connecting downtown Yangon to Dala across the river.
A memorandum of understanding for the project was first signed in 2015. A formal agreement for the joint venture was signed in August last year, and the opening ceremony for the complex held in September. (Myanmar Times)
Government signs PPA for first LNG plant in Myanmar
Myanmar has signed a power purchase agreement (PPA) to buy electricity from a liquefied natural gas (LNG) plant.
The project company of CNTIC VPower Group inked a five-year PPA with the Ministry of Electricity and Energy’s Electric Power Generation Enterprise (EPGE) on June 10.
Tariffs and other details have not been disclosed, but the energy ministry’s deputy permanent secretary U Soe Myint told local media on June 8 that the government would be paying around US$0.12 per unit (kilowatt-hour) of electricity.
The 400-megawatt LNG-to-power plant, located in Yangon’s southeast Thaketa, started commercial operations on June 14. The plant uses LNG imported from Malaysia. LNG cargoes totalling 190,000 cubic metres were delivered to Myanmar on June 4 a free-on-board arrangement by Malaysia's Petronas.
This marks the first PPA for an LNG project the Myanmar government has signed and is one of the five “emergency” power projects, totalling 1040MW, tendered by the energy ministry last year. (Myanmar Times)
Myanmar extends closure of preschools to June 30
The Ministry of Social Welfare, Relief and Resettlement has extended the closure of all preschools and nurseries across the country until June 30 to protect children from COVID-19, a senior official said.
Daw San San Aye, director general of the Department of Social Welfare, said the National Central Committee for Prevention, Control and Treatment of COVID-19, had decided on June 12 to order all voluntary preschools, private preschools, and private residential nurseries to remain closed until June 30.
The government first ordered the closure of preschools and nurseries on March 16, a week before the Health and Sports Ministry announced the country’s first two COVID-19 cases.
"In general, we will reopen all preschools and nurseries when primary schools under the Ministry of Education have reopened,” Daw San San Aye said. “We will issue another announcement when preschools and nurseries can reopen.”
The department plans to give cloth face masks to children aged six months to 5 when preschools and nurseries reopen.
“We will soon release a short video related to child care starring singer and actress Chit Thu Wai,” she said.
The department said it operates 137 preschools and one residential nursery.
It also supervises 1955 voluntary preschools, 944 private preschools, and eight private residential nurseries.
As of June 14, Myanmar had 261 COVID-19 cases, six deaths and 167 recoveries, according to the Health and Sports Ministry. Most of the recent cases were detected among quarantined workers who had returned from overseas.
Also, 76 Myanmar citizens who had returned to the country have tested positive for COVID-19, including 45 returning from India, 13 from Malaysia, eight from the United Arab Emirates, five from Bangladesh, two from Thailand, two from Italy, and one from China.
Myanmar growth to slow in 2020 but rebound next year, World Bank says
Although economic growth for Myanmar is forecast to slow to 1.5 percent in 2020 due to the COVID-19 pandemic, this could rebound to 6pc by 2021, according to the World Bank’s Global Economic Prospects 2020 report released on June 8. The economy grew 6.3pc in 2019.
The slowdown is a result of domestic shutdowns, reduced tourism, as well as disrupted trade and manufacturing. However, the economy is expected to regain momentum next year if the global pandemic is brought under control and global trade resumes.
But the COVID-19 pandemic also brings new challenges to Myanmar, as serious risks remain which could delay the country’s recovery next year.
For example, the pandemic will likely further slow potential growth in the region by weakening investment and the supply chains that have contributed to Myanmar growth over the last decade. Economic activity in the rest of Asia is forecast to contract by 1.2pc in 2020 before rebounding in 2021. The regional outlook will significantly deteriorate if global trade tensions re-escalate.
Based on a survey by the Asia Foundation, half the enterprises surveyed believed business survival represented a moderate or high risk, with garments and textiles, hotel and accommodations being at particularly high risk. (Myanmar Times)
Myanmar production expected to restart in coming months
Manufacturers in Myanmar are expected to restart production in the coming months after a fall in activity in April and May, according to data firm IHS Markit’s Myanmar Manufacturing Purchasing Manager Index (PMI) report published on June 1.
The PMI - which ranges from 0 to 100 - plummeted to 29.0 in April, from March’s 45.3. Then, the PMI remained below 50.0 in May, as 38.9 in May. A reading above 50 indicates an overall increase compared to the previous month.
It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.
“Myanmar’s manufacturing economy remained heavily impacted by lockdown measures in May, with key indicators for output, new orders and employment all signalling further rapid declines,” said the firm’s economics director Trevor Balchin.
The notable bounce in the headline figure should not be viewed as a recovery, he said, because it merely reflects a less severe month-on-month downturn than when the lockdown first took effect. At 38.9, the PMI was still the second-lowest on record since the series began in December 2015. (Myanmar Times)
Myanmar imports first two LNG cargoes from Malaysia's Petronas
The Southeast Asian country of Myanmar imported its first liquefied natural gas cargoes from Malaysia's Petronas LNG in May and June 2020, under a sale and purchase agreement signed with power company CNTIC VPower in early 2020, Petronas said in a statement June 4.
The LNG deliveries make Myanmar the newest LNG importing country at a time when the global LNG sector is suffering from capital expenditure cuts and project deferrals, on the back of the coronavirus pandemic and low prices. Petronas said the maiden LNG cargoes to Yangon were sold on an FOB basis, amounting to a total LNG volume of 190,000 cubic meters under the terms of the agreement with CNTIC VPower.
"Both LNG cargoes were loaded at Petronas LNG Complex in Bintulu, Sarawak, and were delivered on 7 May 2020, onboard the CNTIC VPower Global, and on 3 June 2020, onboard the Golar Kelvin," Petronas said.
CNTIC VPower Global is a joint venture between Hong Kong-based power producer VPower Group and China National Technical Import & Export Corp. The joint venture is developing three gas-fired power projects in Myanmar with an aggregate contract capacity of 900 MW, VPower's website showed.
"With Myanmar as the latest nation to adopt LNG as a form of cleaner energy, Petronas looks forward to being a long-term partner and supplier, leveraging on our world-class reliability, as well as innovative and customer-centric solutions," Petronas LNG Chief Executive Abdul Aziz Othman said.
Petronas said it allowed the 28,000 cubic meter vessel CNTIC VPower Global to dock at its Bintulu terminal where cooling-down services were provided. (SPGlobal)
Myanmar and China reopen trade routes
Trade restrictions between Myanmar and China are gradually being lifted, with Global New Light of Myanmar reporting the Lweje and Kampaiti borders have been reopened for export, after they were temporarily closed to avoid the risk of spreading Covid-19. In the midst of the restrictions, the Muse border remained open for the export of watermelon, muskmelon, mango and plum, however it was inundated with growers wanting to gain access, which reportedly caused lengthy delays, reducing fruit quality and resulting in higher costs overall. China’s General Administration of Quality Supervision, Inspection, and Quarantine has provided clearance for the export of mangosteen, rambutan and lychee to commence, in addition to existing exports. Myanmar’s Ministry of Agriculture, Livestock and Irrigation has also sent information on tissue-culture bananas, limes, pineapples, avocados, and pomelos to China for trade access. (fruitnet.com)
Airlines in Myanmar are resuming operations
Some domestic airlines in the country said that they will be resuming their operations starting at the end of this month.
Air Thanlwin, a domestic carrier, which has been temporarily suspended its flights in April to curb the spread of the coronavirus, has announced that it will resume operations on May 30.
The airline will resume flights on May 30 with routes based in Yangon and Mandalay flying to Sittwe, Tachilek, Myitkyina, Kengtung, Heho and Hkamti.M
Myanmar National Airlines and Air KBZ have been able to resume domestic flights since early May.
Golden Myanmar Airlines, which suspended operations until May 15, resumed domestic flights the next day on May 16, with some destinations flown by majority of travellers.
Mann Yadanarpon Airlines restarted its domestic flights on May 22, but only between Yangon and Sittwe.
Currently, Myanmar has suspended international flights until the end of May, and domestic flights have been reduced depending on the availability of passengers, according to local airlines.
Some international airlines flying to Myanmar have announced plans to resume some flights in early June.
The Department of Civil extended a ban on international commercial air traffic until the end of this month on May 14 to curb the spread of coronavirus.
The ban, first introduced on March 30 and extended by decrees since then, was extended from May 15 to May 31, according to a memo to airlines from the civil aviation department and signed by its director general U Aung Kyaw Tun. (Myanmar Times)
Myanmar microfinance institutions have serious cash problems
Travel restrictions, government orders to defer repayments and lend at lower interest rates have reduced the ability of microfinance institutions (MFIs) in Myanmar to operate at a time when there is a pressing need for capital from the rural population due to COVID-19.
The inability to collect repayments from some borrowers has led to road bumps in liquidity and cash flows for MFIs, and this, in turn, has limited the lenders' capacity to extend financing to others.
Compared to the same period in 2019, the multi-donor Livelihood and Food Security Fund (LIFT) has seen a US$115 million shortfall in liquidity among MFIs it worked with last month, and this is expected to rise by another $60 million during the first half of May as COVID-19 restrictions persist.
MFIs working with LIFT disbursed around $1.2 billion in loans to more than 2.8 million low-income households last year, but some have seen reductions of more than 60 percent in planned disbursements this year as a result of COVID-19.
Since Myanmar enacted the Microfinance Law in 2011, lending by MFIs has become the biggest source of financing for the rural economy. There are almost 200 licensed MFIs, serving an estimated 5.5 million clients in Myanmar. (Myanmar Times)
ADB will extend loans for development in Myanmar
Myanmar is planning to take a US$60 million loan from the Asian Development Bank (ADB) to establish a Credit Guarantee Corporation (CGC), U Maung Maung Win, the Deputy Minister for the Ministry of Planning, Finance, and Industry, said in Parliament on May 21. The proposal was sent by the President.
U Maung Maung Win said small and medium enterprises (SMEs) in Myanmar lack a credit guarantee system which limits the amount of unsecured loans the banks are able to extend to an SME.
In Myanmar, 98% of the economy comprises SMEs, while 95% of the workforce is employed by this sector, according to government data.
Yet, bank lending for business in Myanmar comprises just 37% of GDP, which is low compared to other countries in the region. “Establishing the CGC will help solve the problem of SMEs having insufficient collateral and documentation, which prevents them from getting a loan from the banks,” he said.
The ADB will extend the loan at an interest rate of 1% per year during a grace period of eight years, and 1.5% per year during the repayment period over the next 24 years.
Myanmar to borrow K1.3 trillion from Central Bank
The government will borrow K1.3 trillion from the Central Bank of Myanmar (CBM) to plug the budget deficit for fiscal 2019-20, deputy minister for Planning and Finance U Maung Maung Win told Pyidaungsu Hluttaw on May 21.
This is expected to be around 20 percent of total borrowings to fund the deficit. It also indicates a further decline in CBM borrowing from 25pc over the past two fiscal years and over 50pc in 2016-17. Prior to that, the CBM funded the bulk of the country's deficits.
The lower levels of CBM borrowing is in line with the country's plan to reduce its reliance on central bank financing and more on bond financing.
Under the Budget Law for the fiscal year, the actual amount that the government can raise through borrowings, including bonds, shall not be more than K9 trillion. (Myanmar Times)
Myanmar fintech company receives investment
Ant Financial has announced its plans to invest US$73.5 million in fintech firm Wave Money as part of a strategic partnership to boost financial inclusion in Myanmar.
The investment makes the Alipay operator a substantial minority stakeholder in Wave Money, alongside existing shareholders Yoma Group and Telenor, according to a statement.
Founded in 2015 as a joint venture between Yoma and Telenor, Wave Money lets users send and receive money using their phones or through one of its 57,000 agents called “Wave Shops” scattered across urban and rural areas in Myanmar. According to the statement, Wave Money is profitable, having become EBITDA-positive in 2018 and reaching US$4.3 billion in transfer volume in 2019. The company also said that over 21 million people have used its platform, with its monthly active user base growing by 14% month on month.
Myanmar tourism industry will take two years to recover
Myanmar’s tourism industry is expected to remain closed for the rest of the year due to COVID-19 restrictions, operators said. The recovery of the sector depends on the country’s ability to control and contain the spread of COVID-19. Meanwhile, far fewer foreign tourists are expected over the next two years. “It may be possible for local people to start making trips in October if the pandemic is controlled but rather than in groups, most people will only travel with their families. It would be hard to restart both inbound and outbound tours,” said U Thet Lwin Toe, an industry insider based in Yangon. Because of COVID-19, tour packages offered in the past will need to change and the industry will have to be more innovative with their services to generate revenue, he said. (Myanmar Times)
The government has announced that it will be reducing night curfews by two hours starting May 15.
According to a May 13 notice by the Central Committee on Prevention, Control and Treatment on COVID-19, the curfew hours will be loosened to 12am-4am for all townships in Nay Pyi Taw starting May 15. This also applies to all regional and state governments. The current curfew is 10pm-4am. (Myanmar Times)
Myanmar’s de facto leader, Daw Aung San Suu Kyi, said the use of disposable face masks is unsustainable and could become a heavy financial burden on ordinary people who struggle just to feed their families.
But she underscored the importance of wearing face masks when out in public as part of preventive measures against COVID-19.
The State Counsellor, who is leading the fight against the dreaded disease with a lack of resources, called on all government officials to encourage people to wear re-usable homemade masks rather than the expensive disposable masks.
She said surgical masks cost K400 (US$0.29) each, and everyone uses two or three of them a day.
“For the long term, it will become a burden on the people. We should change our masks two or three times a day, so it is impossible for people to use surgical masks,” she said during an online meeting on May 12 with the vice mayor of Nay Pyi Taw, the administrator of Myaing township in Magwe Region, and the Pyithu Hluttaw (Lower House) MP for Kalaw township in Shan State. (Myanmar Times)
Myanmar plans to launch its first satellite in 2021, using Japanese technology. Engineers and researchers in the country will develop an ultrasmall satellite and launch it into Earth orbit with the help of Japan's Hokkaido University and Tohoku University. Monitoring from space will help improve agriculture and disaster response. (Nikkei Asian Review)
Myanmar’s fisheries sector will face its largest loss in history if demand does not pick up very soon, said U Myo Nyunt, secretary of the Myanmar Fisheries Products Processors & Exporters Association. “Exports have collapsed. All international orders have been cancelled and we have not received any new orders from the European Union (EU) since they are all locked down." The EU and other western countries accounts for about 45% of Myanmar’s fisheries exports, while China and Thailand account for the remaining 55%. (Myanmar Times)
For Myanmar, the onset of Covid-19 has sparked a renewed crackdown in Rakhine and Chin states. These developments may not capture widespread attention – particularly as relations with China become increasingly fraught – yet they cannot be ignored, and must be recognised as a serious threat to regional security. If anything, the Rohingya refugee crisis of recent years should be a reminder of the enormous potential for regional consequences of such conflicts. (The Lowy Institute)
Myanmar’s Ministry of Labor, Immigration and Population has introduced a new social security mechanism which will allow workers whose factories have been closed since mid-April due to safety inspections to claim for 40% of their salaries. After the national Thingyan holiday which ended April 19, staff were unable to return to work as authorities undertook site inspections, ensuring factories provided adequate personal protective equipment (PPE) where needed and that they had adapted to encourage social distancing. Garment workers are now able to claim for 40% of the salaries they had lost throughout this time, via a new government scheme brought in to provide financial relief. (Ecotextile)
- How is COVID-19 affecting the outlook of Myanmar's garments industry? Read our latest analysis here.
Despite a huge increase in approved foreign investments from US$1.9 billion to $3.3 billion during the period between October and March, the actual inflow of foreign direct investments (FDI) are lower. At US$500 million, the inflow of investment in the first quarter of the year fell short of last year’s US$800 million, said U Aung Naing Oo, permanent secretary of the Ministry of Investment and Foreign Economic Relations (MIFER). “My concern is that although more investment was approved, the actual inflow of FDI will be a challenge for us,” he said during an AustCham Myanmar webinar last Wednesday. “Almost all businesses in the country are suffering as a result of the coronavirus,” U Aung Naing Oo added. He is also a member of the Working Committee to Address the Possible Impacts of COVID-19 on the Country’s Economy, chaired by the investment minister U Thaung Tun. Based on the ministry's observations and discussions with businesses, it is unlikely that the Myanmar economy will see a recovery by the end of the year, said U Aung Naing Oo. (Myanmar Times)
Myanmar government has planned to allocate second batch of fund of 200 billion kyats (US$142.8mil) to disburse more loans to the businesses affected by the Covid-19 (coronavirus), according to Zaw Htay, spokesperson of President's Office on Saturday (May 2). The government has been giving out loans to the most vulnerable businesses in the garment manufacturing sector, hotels and tourism as well as small and medium enterprises (SMEs) under the country's Covid-19 Economic Relief Plan since the first batch of fund of 100 billion kyats (US$71.4mil) was allocated last month. (The Star)
Myanmar will resume rice exports from May at regular volumes of 150,000 tonnes. The Myanmar Rice Federation (MRF) said 100,000 tonnes will be shipped overseas while the remaining 50,000 tonnes will be traded at the border. According to reports in the Myanmar Times, government estimates indicate that more than two million tonnes will be allocated for export in the current fiscal year. About 10 per cent will be retained as food reserves for Myanmar. A total of 112 companies will handle the maritime exports while 200 companies will be involved in the border trade for May. The MRF said about 60 per cent of the two million tonnes will consist of equal allocations from all the companies. The remaining volumes will consist of additional allocations from companies involved in contract farming and which made investments in mills or warehouses over the last three years. MRF is currently in negotiations with some Asean countries and for government-to-government export arrangements. (New Straits Times)
How is COVID-19 affecting the outlook of Myanmar's garments industry? Read our latest analysis here.
The Central Bank of Myanmar (CBM) has slashed interest rates by another 1.5 percent, making it the third time it has done so since COVID-19 was declared a global pandemic. The decision to cut rates was announced under Directive No. (8/2020), issued on April 27 and effective May 1. The CBM first cut rates by 0.5 pc on March 12. A second 1pc cut was announced on March 24. The April 27 cut brings total rate cuts to 3pc within two months. (Myanmar Times)
Myanmar's Foreign Affairs Ministry on Sunday morning (Apr 26) announced the extension of temporary entry restrictions for travelers from all countries until May 15, as part of measures to curb the spread of Covid-19 (coronavirus) pandemic. The extension will be applied to the ministry's announcements of precautionary measures for the travellers which were set to be in force until April 30. Complying with the restrictions, all incoming travellers including Myanmar nationals and all diplomats accredited to Myanmar and the United Nations officials active in Myanmar will be put in quarantine on their arrival in Myanmar. Also, the suspension period of all types of visas including social visit visas and visa exemption services has been extended to May 15, the ministry's announcement said. According to a recent release from the Ministry of Health and Sports, the quarantine period was extended to 28 days which include 21-day facility quarantine and seven-day home quarantine. Meanwhile, the effective period of restriction for operation of international flights at Yangon International Airport was also extended on Friday to May 15, said a statement from the Yangon Aerodrome Company Limited, operator of the airport. (The Star)
Myanmar has extended its lockdown measures untwil May 15. It includes suspending all commercial passenger flight arrivals, prohibition of large gatherings, and locking down areas and neighborhoods with a large number of infections. A nighttime curfew in Yangon, the biggest city and the country's commercial capital, could last until June 18. (Global New Light Of Myanmar)
The World Bank said Monday it has approved $50 million in emergency financing to help Myanmar improve its hospital system to deal with the coronavirus outbreak. The bank's office in Myanmar said in a statement that the credit would be used mostly to increase the capacity of intensive care units at selected hospitals and to build the skills of hospital staff and officials, in addition to promoting community engagement. Myanmar is one of the poorest countries in Asia and its public health infrastructure is considered weak. The World Bank said the project will cover eight central hospitals and 43 regional and state hospitals around the country, starting with those in areas considered most at risk, such as densely populated areas and places serving as travel hubs. The financing for the Myanmar project is the latest in series of fast-track measures initiated by the bank earlier this month to deal with the pandemic. The first group of projects, totaling $1.9 billion, was to assist 25 countries in the developing world, while the bank prepared packages for 40 more.
Myanmar has imposed a nighttime curfew in four regions -- including the country’s largest and commercial city Yangon -- after it recorded the fifth death from coronavirus. Myanmar reported a total of 94 confirmed cases with five deaths, while five others made full recoveries as of Saturday, according to the Health Ministry. Yangon Regional government on Saturday announced the imposition of a nighttime curfew in the former capital, where four deaths from the coronavirus have been recorded. “The 10 p.m.-4 a.m. [1530GMT-2130GMT] curfew starts today and will be in place until further order,” said Naing Ngan Lin, a regional minister. The 10-day “Stay-Home” campaign (19-20 April) is likely to be extended until the end of the month, he added. “We are still negotiating for the possible extension of the Stay-Home campaign,” he told Anadolu Agency by phone on Saturday. The nighttime curfew (9 p.m.-4 a.m.) was already in place in Myanmar’s second largest city Mandalay since Thursday (April 16). Governments in costal Ayeyawaddy region and northwestern Sagaing region have also announced the nighttime curfew (10 p.m.-4 a.m.) on Saturday. Since late March, Myanmar closed all border crossings for everyone except for Myanmar nationals returning from neighboring countries such as Thailand and China. The country has also banned the landing of international commercial flights until the end of April. (MM Times)
Myanmar releases 25000 prisoners about 25% of its total prison population. Every year, during new years celebrations that are around this time, the government gives amnesty to prisoners but never this many. The reason behind the decision has everything to do with the COVID-19 crisis. The dirty and overpopulated prisons are difficult to be kept safe from infections. Among the prisoners are 87 foreigners.
State Counsellor Daw Aung San Suu Kyi, in her capacity as Chairperson of the National-Level Central Committee on Prevention, Control and Treatment of Coronavirus Disease 2019 (COVID-19) made a public statement:
“Citizens of the of the Union of Myanmar,
I would like to give you the latest news of COVID-19 in Myanmar. Out of fourteen cases, checked and confirmed positive and hospitalized (till today), one passed away this morning. The case (suffering from CA Nose) had come back from Australia via Singapore recently. Based on the nature of COVID-19, those older adults suffering from various diseases with low resistance are more at high risk and vulnerable. The risk is higher if they do not get prompt medical attention. So if you are having early warning signs, like fever, dry cough, and breathing difficulties, get medical attention immediately.
The threat of COVID-19 is alarming because it spreads very fast. That is why a suspected case must be quarantined so that he or she could be separated from others and so that others would not get infected. Although COVID-19 came into the country from abroad, it can spread very quickly in large quantities as a result of contact among people. The most effective method of prevention and control is to avoid contacts. That is why you are advised to avoid going to crowded places, both indoors or outdoors. Gathering at home with relatives and friends and staying close to each other would be dangerous, just like mingling in the crowd outdoors. At this time, like in the saying “The farther, the better”, please take care and protect your health and the health of others. Stay at home as much as you can. I understand however that some people with accommodation problems would have difficulties. Anyhow, for a certain period of time, all of our people need to hang on with strong determination and bear the difficulties. If each of us works with full sense of duty to stop the spread of COVID-19, we would be able to overcome this challenge. I would like to request those who have been placed under the 14 days quarantine to exercise your patience and pass the required period of time with good will for others. Therefore those confined under quarantine are being quarantined because they are liable to be infected by the virus. If you are placed under quarantine, as a PUI (Patient under investigation) case, this if for your own good. If the symptoms are checked and detected earlier, then you’ll be given timely medical attention, so the treatment would tip the balance for the better. If you help yourself, you also help others, you know.
After the Ministry of Health and Sports had announced that there could be a big outbreak of the pandemic, there were some people who raised their voices for a “Lock Down”, while others were worried about when the Lock Down was coming. Therefore, in the national interest, community quarantine may be carried out in some regions, in which the access or exit is denied. If such a situation occurs, a committee headed by the Vice President-1 has already been organized for the purpose of taking systematic measures for the sufficient and sustainable supply of provisions and medicines, as well as for the political stability in such a region under special care. We will inform you as early as possible if there is a need for community quarantine for a particular region. And I would like to urge the people of such a special region to cooperate and collaborate with their understanding of the important situation.
Of course, there could be consequences from the outbreak of COVID-19, which would make an impact on the economy, and the Union government has, therefore, taken precautionary measures so that the people would have to suffer as little as possible. For example, we have already started giving out loans to enterprises that need the most. This is to pay wages to workers and to keep the enterprises running. The working committee tasked with alleviating the impact of COVID-19 on the economy has been monitoring and studying the situation full time. It has laid down suitable programs and implementing them.
You all are requested to be alert to all announcements made by the Ministry of Health and Sports on a continuing basis. We all should be united and exercise a full sense of responsibility individually for the sake of individual health and the health of others. Unity is strength; people are the key. If the people do what needs to be done in unity, success will be the outcome for all of us.
Today, while countries all over the world have been grappling with the pressing issue of the highly infectious COVID-19 virus, we are also trying to the best of our ability. It’s quite heartening for me to witness that our people have been making their contributions in the roles assigned, serving their duties in respective sectors with a strong sense of responsibility. I fully believe that we can calmly overcome this pandemic with our collective strength.
I must acknowledge my gratitude to all medical officers, nurses and health workers, who are battling at present on the frontlines with high morale, despite difficulties and hardships. I’d say you are the heroes who are battling for the people. Moreover, I wish to express my gratitude on behalf of the State, to all quarter/ village administrators, staff of the Department of General Administration, staff of other departments and all the people who have being contributing to these efforts.”
The Yangon public transportation busses will keep running until Saturday 11 Apri. Private cars are also after that still able to operate. Yangon residents have been told to remain in their homes for a 10 day period only to leave to buy essential items. The bus service remains open during the Thingyan period, when traditionally many travel back to their hometown, in order for businesses to keep operating. The bus service did say that it will keep running at reduced frequencies in line with the government's policies.
Myanmar has asked the international community for support. The country desperately needs medical equipment and supplies. It also needs more test kits to boost its surveillance capacity. It took a long time for Mynmar to detect the first cases simply because no testing kits were available. Currently, Myanmar is doing much more to prevent the spread of the virus. People are banned from traveling during the 10-day Thingyan Festival, the country's most celebrated holiday for the Myanmar New Year which starts on Friday 17 April. Traveling is only allowed for funerals. The two biggest cities, Yangon and Mandalay, have forbidden their citizens to leave their homes during the holiday starting Tuesday 7 April.
Myanmar is banning the entry of Myanmar nationals via border gates until Wednesday 15 April. When returning they have to do a 14-day self quarantine.
All international flights are banned in Myanmar starting Monday 30 March. No international commercial passenger flight is allowed to land in Myanmar until Tuesday 14 April. All landing permissions previously granted are also suspended. Relief, cargo, medical evuation flights and specially-approved flights can still land in Myanmar. The country already made it harder for foreign visitors to enter the country by exempting the visa on arrival procedure. Land border gates are also closed for foreign nationals.
Restaurants in the capital Yangon have been asked to close immediately and operate take-away services only, according to a letter signed by the Yankin Municipal Committee under the Yangon City Development Committee (YCDC) and delivered by hand to restaurant owners this morning. (Myanmar Times)
Myanmar's President has ordered the country’s civil servants to work on a more rotational basis, with only half of them in the office at one time, as part of measures to fight COVID-19, a senior official said Thursday. (Myanmar Times)
All foreign nationals arriving in Myanmar must present a medical showing they have no acute respiratory ilness (fever, cough or shortness of breath) before boarding their flight. Myanmar follows the same travel restrictions as Thailand, one of the most important transit destinations for people leaving Myanmar. (Myanmar Times)
• All foreign nationals are required to present laboratory evidence of absence of COVID-19 infection issued no more than 72 hours prior to the date of travel to Myanmar, and undergo a 14-day quarantine in a facility.
• All diplomats accredited to Myanmar and United Nations officials working in Myanmar are also required to present laboratory evidence of absence of COVID-19 infection issued no more than 72 hours prior to the date of travel to Myanmar, and undergo a 14-day home quarantine.
- EMEx classifies Myanmar 'travel restrictions' as Severe after new limitations
Myanmar has eased visa extension rules for other nationalities because of the growing travel restrictions in the world. Foreigners can now apply for new visas and stay permits until up to five days of expirty of their existing visas. This change is valid till otherwise said.
The Myanmar Port Authority wants all ships arriving in Yangon, the capital of the country, to give a 72-hours advanced notice to the authorities. All crew members have to undergo medical check-ups before docking. Asian ships are included in the order.
Myanmar has barred foreign nationals from entering the country via land border checkpoints. It is the first serious travel restriction Myanmar has implemented. Myanmar also requires travelers who have been in China, South Korea, Italy, Germany, France, and Spain to quarantine for 14 days after arrival. The Netherlands Embassy in Bangkok has been informed that all Dutch citizens arriving or transiting in Myanmar will also be subjected to quarantine starting Friday 20 March. The issuing of e-via and visa on arrival will be temporarily suspended. Travelers and foreign nationals should also consider that Bangkok, an important transit hub for Myanmar, is banning anyone from the country who doesn't carry a certificate declaring he or she is COVID-19 negative.
- EMEx classifies Myanmar 'travel restrictions' as Medium due to new limitations and especially lack of options to get out/in the country.
Myanmar's President's office took its biggest step so far by cancelling Myanmar New Year celebrations (Thingyan) amid news of three suspicious deaths. In addition also other large-scale public gatherings are forbidden until the end of April.
- EMEx classifies Myanmar 'travel restrictions' as Low because restrictions are limited
- EMEx classfies Myanmar 'lockdown' as Low due to limited extent of social restrictions and doubts around enforcement
Cambodia to ship rice to Timor-Leste
Cambodia is ready to export 30,000 tonnes of milled rice to East Timor soon, as economic ties between the two nations are set to improve.
Cambodian Commerce Minister Pan Sorasak said they were ready to start shipping the rice and was only waiting for the green light from East Timor.
The progress of economic ties between the nations comes after a meeting in April between the Commerce Ministry, Cambodian Rice Federation (CRF) and East Timor ambassador to Cambodia Ermenegildo "Kupa" Lopes.
Lopes said East Timor was intent on importing rice from Cambodia and added that East Timor could in return, export crops to Cambodia as well.
He said his country could provide 3,000 fuel sector jobs to Cambodians, too.
CRF president Song Saran told The Phnom Penh Post that Cambodia had enough white rice stockpiled to meet East Timor's demand.
"With the efforts of the Cambodian government, we hope that East Timor will become a new strong market for Cambodian rice exporters."
He said East Timor had never bought rice from Cambodia and historically relied on Vietnam to satisfy its demand.
CRF board chairman Hun Lak previously said East Timor had first offered to buy rice from Cambodia to prevent a food shortage due to Covid-19.
The country has yet to specify an amount.
Lak said the government had requested East Timor to send a letter to the Foreign Affairs Ministry and International Cooperation outlining the specifications of their order.
At a meeting with Lopes on May 27, Prime Minister Hun Sen said Cambodia wanted East Timor to set up a representative office for its rice-purchasing companies in Cambodia.
Hun Sen said he wanted the companies to build warehouses, factories and silos, as well as establish purchasing channels to facilitate rice exports to East Timor.
Rice export reports show that in the first five months of this year, Cambodia exported 356,097 tonnes of rice to the international market, a more than 42 per cent year-on-year increase.
Last year, the kingdom exported 250,172 tonnes of rice worth US$241 million.
East Timor imported 6,800 tonnes of rice in the first two months of this year, around 5,000 tonnes less than the same period last year, Port Authority of Timor-Leste data shows. (Straits Times)
Political uncertainty threatens Timor-Leste's economy
Economic activity is forecast to contract by at least 5 percent in 2020, owing to renewed political uncertainty and the impact of the novel coronavirus (COVID-19), according to a new World Bank report released today. The Timor-Leste Economic Report: A Nation Under Pressure warns that the COVID-19 pandemic, with its associated health and economic impacts, requires bold policy actions and a strong political consensus to avert the deepest economic shock in Timor-Leste's history since independence. Read the full report here.
The East Timorese government is facing an unprecedented constitutional challenge, after 19 MPs submitted a petition to the country’s Court of Appeal requesting President Francisco Guterres be investigated for allegedly violating the charter. The MPs, 18 from previous coalition partner CNRT party and one from UDT/FM, are furious Lu Olo as the President is also known, hasn’t allowed nine of their colleagues to take up their nominated positions in cabinet, two years after the 2018 parliamentary elections. Xanana Gusmao's CNRT-led alliance collapsed earlier this year after Parliament failed to pass the 2020 state budget on January 17. The budget has not yet been approved, exceeding the 60-day limit prescribed by the constitution, the group of MPs argues. In their petition, they say such failure should have triggered dissolution of Parliament.
Guterres has questioned the suitability of the nominated candidates. The inaction has left crucial ministries, such as health, finance and home affairs, vacant or in the hands of unsworn ministers at a time when the coronavirus pandemic is putting extra pressure on the Australian neighbour. In addition, the budget impasse, caused Prime Minister Taur Matan Ruak, also known as Jose Maria de Vasconcelos, to tender his resignation but last month he withdrew it. He was reported as saying the President had not yet moved to accept or reject it, and he was needed to lead the government.
Xanana Gusmão, president of the second largest Timorese party, has criticised the decision to extend Timor-Leste’s state of emergency, considering that it is not justified at the present time and can bring increased risks to the economy of families and the country. “Reopen business and work, but don’t let people gather indiscriminately. All citizens have an obligation to continue to follow rules on social distancing, hand washing. There can be no parties and activities that bring many people together,” he said in a statement.
East Timor’s government on Wednesday approved the easing of several restrictions imposed under the state of emergency declared in response to the Covid-19 pandemic, reopening the border to Timorese nationals and allowing the use of public transport but with health protection measures. Several measures from the first period of the state of emergency remain in force, including the bar on the entry of foreign nationals into the country, with the exceptions previously provided for, including all foreigners working in the oil sector. (Macau Business)
In Timor-Leste where more than 40 percent of the population lives under poverty line and the social safety net is limited, figuring out how to save lives while minimizing the resulting economic and social costs will be crucial to the government’s plan to combat COVID-19. Sacrificing one for the other would result in tragic consequences, especially to vulnerable groups. Timor-Leste cannot afford to leave the vulnerable behind. It is important that the Timorese government start bringing those who are invisible and miserable back to the center of discussion now — before it is too late. For More: The Diplomat
The restrictions imposed on the movement of people due to the Covid-19 pandemic has forced Timor Resources to temporarily suspend test drilling in the south of Timor-Leste, the company’s director of operations told Timorese news agency Tatoli. The Director of Operations said that the company will wait until the end of the state of emergency to resume assembly of equipment, which takes about a month, which will then be checked by the National Oil and Mineral Authority before drilling can begin. The President of Timor Gap, Francisco Monteiro, recently said that his company and Timor Resources would start drilling three to five wells in the block, three of which at a depth of 2,000 metres, which would require an investment of US$35 million. (MacauHub)
The Prime Minister of Timor-Leste, Taur Matan Ruak, has withdrew his resignation to tackle the spread of the COVID-19 virus according to a statement. The government approved a $250m USD fund to fight it. The country is Asia's youngest democracy but grapples with political instability that undermines attempts to reduce poverty, corruption and to develop its rich natural resources. A six-party coalition said last month that it was ready to form a government under independence hero Xanana Gusmao. But two parties are now also trying to support the current prime minister. (National Post)
Timor-Leste is facing a governmental impasse because of the COVID-19 crisis. In late January, the governing alliance collapsed leading to the resignation of Prime Minister Taur Matan Ruak. A new majority coalition was announced but doesn't include Ruak's party. However, the resignation is not effective until accepted by the President, Francisco 'Lu Olo' Guterres which didn't happen yet. The COVID-19 made the situation far more complicated than it already was with neighboring countries hit hard and Timor-Leste even more isolated than it already was.
The Timorese Petroleum Fund (PF) has lost almost $1.8 billion (€1.63 billion) in value due to the behaviour of the international stock markets because of Covid-19, the governor of the Central Bank (BCTL) said this week. (Macau Business)
Timor-Leste has declared a state of emergency. Among the suspended rights are international traveling, the screening of incoming passengers and goods, as well as forced quarantines if necessary. For now there are no further details what the state of emergency exactly entails. A body of journalists has complained about the lack of communication from the government's side and that journalists are not protected, health wise, to do their work without risking to get the virus.
- EMEx classifies Timor-Leste 'lockdown' as Medium because the government declared a state of emergency, which does not include much changes, but has the potential to suspend many basic rights.
Timor-Leste has officially closed three landborders with Indonesia and has started travel restrictions for travelers from 147 nations. This ban started Thursday 19 March and will last for 4 weeks. Indonesia has suspended all flights to Timor-Leste.
- EMEx classifies Timor-Leste 'travel restrictions' as Severe because inbound traveling is basically impossible now
Indonesia's East Nusa Tenggara temporarily closed its border checkpoints with Timor Leste. The government of Timor Leste supported the decision. "We strongly support the move as it would protect both the Timor Leste and NTT people from COVID-19 exposure," the Timor Leste consul in Kupang, Jesuino Dos Reis Matas C, said. Timor-Leste has implemented health checks on inbound visitors.
- EMEx classifies Timor-Leste 'travel restrictions' as None because only restriction was implemented by Indonesia
- EMEx classifies Timor-Leste 'lockdown' as None because no serious restrictions were implemented