ASEAN-MEMBER

NATIONS
Developments &
Divina V. Sabanal, DBM
Trends
SINGAPORE

● The country provides one of the world’s most business-friendly

regulatory environment for local entrepreneurs and is ranked
among the world’s most competitive economies (World Bank).

● The overall growth of the Singapore economy was 3.2% in 2018.

Value-added manufacturing, particularly in the electronics and
precision engineering sectors, remain key drivers of growth, as are
the services sector, particularly the information and
communications industries, which grew 6.0% year-on-year, and
the finance & insurance industries, which grew 5.9% year-on-year.
SINGAPORE

● In the most recent World Bank Human Capital Index, Singapore

ranks the best country in the world in human capital development.
This means that a child born today in Singapore will be 88% as
productive when she grows up, as if she enjoyed complete
education and full health.

● Together with strong financial support from the government, the

country continues to strengthen the nimbleness and flexibility of
its workforce by providing continuing education such as
the Skillsfuture initiative.
SINGAPORE
OTHER BUSINESS TRENDS IN SINGAPORE

● Digitalization and AI
● Niche E-Commerce
● Eldercare/ Care for Pioneer Generation
● Education and Training
● Mentorship on Entrepreneurship
● Cybersecurity
● Augmented Reality/ Virtual Reality
THAILAND
● Thailand has been a widely cited development success story, with sustained
strong growth and impressive poverty reduction (World Bank).

● Thailand’s economy grew at an average annual rate of 7.5% in the boom

years of 1960-1996 and 5% during 1999-2005 following the Asian Financial
Crisis.

● This growth created millions of jobs that helped pull millions of people out of
poverty. Gains along multiple dimensions of welfare have been impressive:
more children are getting more years of education, and virtually everyone is
now covered by health insurance while other forms of social security have
expanded.
THAILAND

● Private investment declined from more than 40% in 1997 to 16.9% of GDP
in 2019, while foreign direct investment flows and participation in global
value chains have shown signs of stagnation.

● Thailand has made remarkable progress in reducing poverty from 58% in

1990 to 6.8% in 2020 driven by high growth rates and structural
transformation.

● Thailand’s fiscal response to COVID-19 significantly mitigated the impact

of the crisis on household welfare.
THAILAND
● Aging will directly lead to increased spending needs, through rising public
pension and healthcare costs. The combined fiscal costs of the Civil Servant
Pension, the Social Security Fund, and the Old Age Allowance are projected to
rise from 1.4% of GDP in 2017 to 5.6% in 2060.

● The increasing frequency of natural disasters is also a threat to sustained

economic growth, as it has come at the cost of the environment and inclusion.

● Greenhouse gas emissions have risen markedly during this recent period of
rapid growth, as has inequality between the country’s regions and firms.
Thailand is a major marine plastic polluter on land, in river systems, and along
coastlines.
THAILAND
● Students’ learning outcomes are low and have not improved significantly in
either national or international assessments (Asian Development Bank).

● according to the results of the international assessments, Thai students are

performing below the international average in core subjects. We argue that such
poor learning outcomes are presumably due to two main reasons: the role of
small school, and inefficient resource allocation for education in public spending.

● Key challenges in Thailand’s basic education include the need to expand the
supply of human capital to avoid the middle-income trap and the aging society.
This is a pivotal period in Thailand’s economic development. Educational reform
is needed to ensure high-quality basic education for all.
THAILAND
● Thailand is the second largest economy in Southeast Asia and a member of the
ASEAN. Its economy, worth over $500 billion, is larger than that of Hong Kong and
only second to Indonesia among ASEAN countries due to its large population (Oosga
Consulting).

● Tourism is the primary growth driver of Thailand’s economy, accounting for 6.3% of
its total GDP in 2019 before the pandemic. From 2012 to 2019, the tourism industry
grew at an average rate of 9.6%, reaching 696 billion baht.

● In the next few years, Thailand’s economy will be driven by two main pillars: tourism
and industrial manufacturing and advanced technology. The Thai government has
introduced policies to attract wealthy foreign visitors and increase their stay, such as
providing 10-year financial aid and a resident VISA for those with assets or income
above a certain threshold.
THAILAND

● Industrial manufacturing and advanced technology will also play a key role
in Thailand’s growth, driven by the country’s 4.0 policy.

● This policy aims to attract investment from leading companies in advanced

markets through tax cuts and subsidies in ten major industries, including
smart electronics, high-end tourism and medical care, high-value
agriculture, and digital services.

● This will increase the proportion of Thailand’s FDI during 2022-2030 and
drive growth in both the industry and its corresponding supply ecosystem.
THAILAND

Economic Trends that will Impact Thailand:

❖ Travel Recovery

❖ Saving and Spending Behaviors

❖ Digital Activity

❖ Potential Risks Disrupting the Global Economy

❖ Increased inflation rates

❖ Shift in the Labor Market

INDONESIA

● The largest economy in Southeast Asia, Indonesia – a diverse archipelago

nation of more than 300 ethnic groups – has charted impressive
economic growth since overcoming the Asian financial crisis of the late
1990s (World Bank).

● Today, Indonesia is the world’s fourth most populous nation and 10th
largest economy in terms of purchasing power parity.

● Indonesia achieved a notable success in reducing its stunting rate from 37

percent in 2013 to under 24.4 percent in 2021. However, more work
remains to be done to ensure strong and productive human capital
development.
INDONESIA

● In Indonesia, climate change is likely to impact water availability,

health and nutrition, disaster risk management, and urban
development – particularly in coastal zones, with implications to
poverty and inequality.

● Indonesia represents the third largest tropical rainforest in the

world (94.1 million hectares), and is home to the world’s
largest tropical peatlands (14.9 million hectares) and mangrove
forests (3.31 million hectares).
INDONESIA
● Indonesia is not only be the fourth most populous country, it’s also
the most powerful economy in Southeast Asia (Oosga Consulting).

● with its steady economic development, Indonesia has become one

of the most attractive countries for foreign investment in recent
years.

● The current Indonesian Joko Widodo government is intensifying

efforts in reforms, from domestic economic reforms, infrastructure
investment, reduction of regulations, promotion of privatization of
industries, and enhancement of ease of doing business, etc.
INDONESIA
● In recent years, the services sector has acted as the primary driver of
economic growth, averaging an annual expansion of 4% from 2017 to
2021
● The manufacturing sector is set to grow at the fastest pace in the
coming five years, with an expected average annual growth of 5.9%.
Services will still be substantial, growing at 5.1% on average from
2022 to 2026, while agriculture will grow more slowly at 3.7% during
the same time frame.

● In the post-pandemic period, the tourism sector is poised to become

an influential part of the economy. Gradual recovery is expected in
INDONESIA
● Indonesia Market Trends in Charts (Indonesia Investments):
1. Population Over Time in Indonesia
2. Indonesia Import Performance
3. Indonesia Export Performance
4. Indonesia Decacorns and Unicorns
5. Top Venture Investment Breakout in Indonesia
6. E-Commerce Transactions in Indonesia by Category
7. Value of E-Commerce Transactions in Indonesia
8. Individuals Who Own a Cellphone in Indonesia
9. Internet Users Over Time in Indonesia
10. Daily Time Spent on Media in Indonesia
11. Overview of Social Media Use in Indonesia
INDONESIA
● Employment quality is a major issue in Indonesia, and compliance with existing
labor regulations is very low. Youth unemployment, skills shortages, and skills
mismatches are also persistent challenges (Asian Development Bank).
● Gains in labor productivity have been slow, and a multifaceted approach for
accelerating labor productivity is required to support growth in higher value-
added activities.
● Indonesia needs to ensure that new entrants to the labor force are equipped
to support economic development. Labor market institutions need to provide
an enabling environment for supporting economic growth and job creation.
Social protection and social security systems need to support the productivity
of the labor force and help to resolve issues related to poverty and inequality.
 PHILIPPINES
The Philippines has been one of the most dynamic economies in the East
Asia and Pacific region. With increasing urbanization, a growing middle
class, and a large and young population, the Philippines’ economic
dynamism is rooted in strong consumer demand supported by a vibrant
labor market and robust remittances (World Bank).

The private sector remains buoyant, with positive performance from the
services sector including business process outsourcing, wholesale and
retail trade, real estate, and tourism.

The Philippine government pursues larger investments in both human and

physical capital to boost growth over the medium and long term.
 PHILIPPINES

Over the medium-term, the growth outlook will continue to be supported

by strong domestic demand, driven by a robust labor market, continued
public investments, and the positive effects of recent investment policy
reforms which could boost private investment.

With continued recovery and reform efforts, the country is getting back on
track on its way from a lower middle-income country with a gross national
income per capita of US$3,950 in 2023 to an upper middle-income
country (per capita income range of US$4,466 -US$13,845).
 PHILIPPINES
The government made further reforms in 2022, which include amendments to the
Foreign Investment Act—allowing first-time foreign investors to fully own domestic
enterprises in the Philippines, the Retail Trade Liberalization Act—reducing the minimum
paid-up capital requirements for foreign retail enterprises, and the Public Services Act —
whereby foreign investors can now own 100 percent of public services projects in the
country (ASEAN Briefing).
Finally, under the current administration of President Ferdinand Marcos Jr, the
Philippines has allowed full foreign ownership of renewable energy projects.

The Corporate Recovery and Tax Incentives for Enterprises Act (CREATE Act) was
passed into law in March 2021. The Act’s purpose is to grant tax relief for companies in
financial need, provide transparent tax provisions, and further increase the
competitiveness of the Philippines.
 PHILIPPINES

Reduction in the corporate income tax rate

The CREATE Act steadily reduced the corporate income tax rate (CIT). From July 2020 to
2022, foreign companies were eligible for a reduction in the CIT rate to 25 percent
compared to the regular rate of 30 percent—the highest in ASEAN. From 2022 to 2027, the
25 percent CIT steadily declined by one percent per year, to finally reach 20 percent in
2027 for foreign companies.

Foreign Investment Act

On March 2, 2022, Republic Act No. 11647 (Act 11647) was signed, which amends the
Foreign Investment Act (FIA), also known as Republic Act No. 7042. The amendments aim
to promote and attract foreign investments by allowing, for the first time, international
investors to set up and fully own domestic enterprises (including micro and small
enterprises) in the Philippines.
SOCIAL TRENDS SHAPING THE PHIL.
BUSINESSES

1. Artificial Intelligence
2. Business Messaging
3. Cross Border Shopping
4. Virtual and Augmented Reality
5. Creators
6. Online Shopping
7. Short-form Videos
EMERGING JOB TRENDS IN THE PHILS

1. Technical and Digital Transformation

2. Green Economy and Sustainability
3. Remote work and Flexibility
4. E-commerce and Digital Marketing
5. Healthcare and Wellness Services
DIGITAL MARKETING TRENDS IN THE PHILS.

1. Increased need for Voice Search Optimization

2. Influencer marketing Evolves with the Rise of Nano Influencers
3. Demand for AI Integration will require Upskilling for Filipino
marketers
4. Augmented and Virtual Reality take a major step forward in the
country
5. Video marketing will still reign supreme
6. Ethical Marketing comes to the forefront of the Philippine Digital
Marketing
7. Social media shopping
8. Privacy-centric marketing becomes a top priority
9. AI-enabled hyper personalization
 MALAYSIA
Since gaining independence in 1957, Malaysia has successfully
diversified its economy from one that was initially agriculture and
commodity-based, to one that now plays host to robust manufacturing and
service sectors, which have propelled the country to become a leading
exporter of electrical appliances, parts, and components (World Bank)

Malaysia is one of the most open economies in the world with a trade to
GDP ratio averaging over 130% since 2010. Openness to trade and
investment has been instrumental in employment creation and income
growth, with about 40% of jobs in Malaysia linked to export activities. .
 MALAYSIA

Over the longer term, as Malaysia converges with high-income

economies, incremental growth will depend less on factor accumulation
and more on raising productivity to sustain higher potential growth.

According to the World Bank’s Human Capital Index, Malaysia ranks 55th
out of 157 countries. To fully realize its human potential and fulfil the
country’s aspiration of achieving the high-income and developed country
status, Malaysia will need to advance further in education, health and
nutrition, and social protection outcomes.
MALAYSIA
Current Trends and Opportunities
1. Deep learning and AI tech will be used to complement creative
industries.
2. Locally made meat and dairy alternatives will cater to their appetite
3. Electric car and bike ownership will be accelerated
4. Esports and gaming will be taken to the next level through other
industries
5. The gig economy sector will see increased effort to grow its
sustainability
6. Social commerce will become a preferred alternative to regular
online shopping
7. Agritech will see a renewed appreciation, and newer, younger
entrants.
MALAYSIA
Lifestyle changes of Malaysians during and after pandemic:

1. Acceptance of a Blended life

2. Reevaluation of finances
3. Quality time with loved ones
4. Self-care, introspection, and the re-evaluation
of lifestyle choices.
 VIETNAM
Vietnam has been a development success story. Economic reforms since the
launch of Đổi Mới in 1986, coupled with beneficial global trends, have helped
propel Vietnam from being one of the world’s poorest nations to a middle-income
economy in one generation (World Bank).

Between 2002 and 2022, GDP per capita increased 3.6 times, reaching almost
US$3,700. Poverty rates (US$3.65/day, 2017 PPP) declined from 14 in 2010 to 3.8
percent in 2020.

Growing at 2.5 to 3.5 percent per year over the past three decades, the agriculture
sector has supported economic growth and ensured food security. It contributed 13
percent of GDP and 29 percent of employment in 2021.
VIETNAM

Vietnam has grown bolder in its development aspirations, aiming to

become a high-income country by 2045. Vietnam also aims to
grow in a greener, more inclusive way, and has committed to
reducing methane emissions by 30 percent and halting
deforestation by 2030 while achieving net zero carbon emissions
by 2050.
Vietnam needs to dramatically improve its performance to
implement policies particularly in finance, environment, digital
transformation, poverty/social protection, and low-carbon
infrastructure.
VIETNAM
 VIETNAM
Business Trends:

1. Working age population, high labour participation and a low dependency ratio.

2. GDP growth averaged 5.9% over the past ten years.

3. Manufacturing gains. Increased investment and ever more sophisticated.

4. Retail goods and services consumption rises unabated.

5. Domestic tourism replenishes the international void.

6. In 2022 the internet economy reached US$23 billion.

7 Rising household affluence.

8. Financial ecosystems enable e-commerce, e-payments and entrepreneurs.

9. Political stability and formidable geopolitical management.

 BRUNEI
The economic situation in Brunei is raising concerns. The country has experienced a
decrease in trade, a decline in foreign investment, and a shrinking development budget
(Linked In).

The decrease in export value was mainly attributed to liquified natural gas (LNG) and other
petroleum products. The declining trade figures are likely to negatively impact Brunei's
economy. As a small country with a narrow export base, Brunei heavily relies on trade to
generate revenue.

This trade decline could lead to reduced government revenue, potentially affecting the
government's ability to provide essential services. Additionally, it could result in job losses
within the export-oriented sectors of the economy.
 BRUNEI

Brunei has also witnessed a decline in foreign investment in recent years.

In 2022, the country saw foreign investments totaling B$403 million exiting
the country, which represents a significant capital outflow not being offset
by replacements.

The dwindling foreign investment is a major concern for Brunei. Foreign

investment plays a pivotal role in the country's economic development by
fostering job creation, boosting economic growth, and attracting new
technologies. This decline suggests waning investor confidence in the
Bruneian economy.
 LAOS

The Lao PDR’s macroeconomic situation has become more challenging

over the last three years (World Bank). As a result, the national currency
has weakened and inflation is soaring. This situation affects poorer
people most seriously.

Consistent growth over the previous two decades was predominantly

driven by large-scale investments in capital intensive sectors, particularly
in mining and hydropower.

The gradual economic slowdown seen since 2012 has become more
pronounced. Structural challenges, macroeconomic instability, and a
deteriorating external environment have curtailed recovery from the lows
of the COVID-19 era
 LAOS
Between July of 2021 and 2023, the currency — the kip — lost more
than half of its value against the US dollar, leading to temporary
shortages of fuel and limited access to foreign exchange at the
official exchange rate. The cumulative effects of these setbacks
mean the country faces macroeconomic instability, heightened
financial risks, and food price inflation. As public debt service
obligations rise and revenues decrease, spending on crucial social
services such as education, health care, and social protection is
down.
The Lao government is looking to adapt to the changing economic
situation, but has limited fiscal space for maneuver, while growth
remains reliant on mining and hydropower, which only employ 1% of
the workforce and, according to the Bank of the Lao PDR
 LAOS

Economic instability and challenges in social services mean that Laos is in

danger of losing gains it has made in poverty eradication, education,
nutritional status, and other key human development indicators.

Structural reforms are needed to stabilize the economic situation and

support a more inclusive growth pattern.
Malnutrition continues to be a critical issue affecting people’s physical and
cognitive development, with stunting affecting over 30% of children under
five. Moreover, at least 70% of Lao children were unable to access online
classes under lockdowns.
LAOS

TRENDS AND MARKET OPPORTUNITIES:

1. Transportation land link between ASEAN and
China
2. Hydropower
3. Agriculture
4. Industrial zones
5. Tourism
6. Mining of copper and gold
 MYANMAR
Myanmar’s development story is complex, with significant reversals in recent
years due to multiple and overlapping crises (World Bank).

From 2011 to 2019, Myanmar experienced high economic growth, averaging

6 percent per year, coupled with significant reduction in poverty. This was
bolstered by economic reforms, lifting of sanctions, and optimism for greater
stability.

The economy has shrunk since the COVID-19 pandemic and the military
coup, and economic activity has remained weak and constrained. The
economy in 2023 is estimated to be 30 percent smaller than it might have
been in the absence of COVID-19 and the coup.
 MYANMAR

Business operations continue to be disrupted by high input prices, electricity

outages, conflict and logistics constraints, trade and foreign exchange
restrictions, and frequent changes in rules and regulations. Labor market
conditions remain precarious and inequalities in household welfare have
worsened.

Myanmar faces the risk of a lost generation with erosions in human capital
development. Public spending on health and education has fallen from 3.6
percent to about 1.8 percent of GDP between fiscal years 2020 and 2023.

Food security and nutrition appear to be worsening with high food prices
and ongoing weakness in the labor market putting household incomes under
substantial pressure
 CAMBODIA
Over the two decades before COVID-19 struck in 2020, Cambodia
blossomed economically. Having reached lower middle-income status in
2015, it set its sights on attaining upper middle-income status by 2030.
Thanks to garment exports and tourism, Cambodia’s economy grew at an
average annual rate of 7.7 percent between 1998 and 2019, making it one
of the fastest-growing economies in the world.

Cambodia’s economy continued to recover in 2022. The recovery of the

services sector is strengthening, driven largely by pent-up consumer
demand. The economic growth for 2023 is projected to reach 5.2 percent.
 CAMBODIA

Initially led by a recovery of export-oriented manufacturing, growth drivers

have started rotating to the services sector, which is accelerating, driven
by pent-up consumer demand and the return of foreign tourists.

Goods and services exports and strong FDI inflows are expected to be
bolstered by the newly ratified free trade agreements, a substantial
increase in private and public investment Despite this progress, human
capital indicators lag other lower middle-income countries.

Accountable and responsive public institutions will also be critical.

Boosting investments in human capital will be of utmost importance to
achieve Cambodia’s ambitious goal of reaching middle-income status by
2030.
 CAMBODIA

Economic situation and trends:

1. Strong economic foundation
2. Great natural resources
3. Proven agricultural and tourism industries
4. Rising manufacturing sector
5. Growing middle class
6. Rise of real estate and construction industry