President's Newsletter - March 2020

Alexander C. Feldman
Alexander C. Feldman
President & CEO
US-ASEAN Business Council
 

 

President's Newsletter

March 2020

Dear Members,

I hope you are well and safe. As global pandemic was capturing the headlines, I finished 14 days self-quarantine on Saturday after my travels to Asia for the Council’s Vietnam and Health & Life Sciences Business Missions at the start of the month. While there are certainly worse fates, not having been with my family since February 28 and being isolated physically from all humans since I returned home on March 7 was tough and made me appreciate my freedom. This weekend was a truly special one as my family and I were able to celebrate being back together again. With Spring’s arrival and Cherry blossoms blooming in the Northeast of the United States, I hope you can still find reasons to make you smile even with all the very real challenges we are all facing.

The US-ASEAN Business Council knows that this is a unique and very challenging time for our members. The world has never seen an economic shut down like we are seeing across ASEAN, the United States, and indeed the globe. New rules are being set quickly and the relationships and trust that the Council has built up during our 36 -year history has never been more important. We continue to have and retain deep relationships across all ten ASEAN governments which have already helped to deliver results for many members in Malaysia and Singapore.

The investment we have made in building a strong team across the Council but especially in our seven offices in Southeast Asia over the last decade is paying off. Our knowledgeable and networked teams have the ability to work around the clock thanks to the time zone differences between the US and the region. This played out this week as Malaysia effectively shut down the country to prevent the spread of COVID-19. The Council, working with other stakeholders, has been actively advocating for essential business to be able to continue with reduced workforce and safety measures in place. As one member put it, the Council’s teams in Malaysia and Singapore responded quickly, responsively and accurately and in a short period of a few hours was able to help encourage the Government of Malaysia to revise its policies and turn a supply chain disaster into a manageable situation. Specifically, we were able to keep “essential goods” factories open and both supplies and people (at least people delivering goods) moving across the Malaysian border with Singapore and with Thailand. (See more details below).

As I am sure you are aware, on March 13, U.S. President Donald Trump declared a national emergency concerning COVID-19 and pledges to partner with the private sector in tackling the outbreak. We are incredibly proud of all our members who are taking extraordinary measures to be at the forefront of this effort. In this time of uncertainty surrounding the spread of COVID-19, the Council is taking several measures to safeguard our staff, our members and stakeholders, while continuing to deliver value to members’ business interests across ASEAN.

Prior to that, commencing March 12, we took the decision to suspend hosting in-person, group meetings in all of our offices in Washington, DC and throughout Southeast Asia. We will look to host our meetings and briefings online and continue to keep you informed about important events, policies and government activities in and around ASEAN. We have also permitted staff, especially those who commute by public transit, to work from home or shift their reporting times to work so as to minimize their vulnerability and help with social distancing. We do intend to keep our offices open for those who feel that they can make it to work safely though we may re-evaluate this on a case-by-case basis as conditions within each country evolve. In addition, we have asked all staff to monitor their temperature daily and not to report to work if they have any cold-like symptoms or fever. We have provided each of our offices with a contactless thermometer as well as hand sanitizers at the entrance to each of our offices, requiring everyone who walks through the door for any purpose to use them.

Like you, we want to be as smart as we can in the face of this crisis and contribute as much as we can to the deceleration and arrest of the virus’ spread. In that respect, the decisions are easy, but they are also taken with regret, since so much of our stock in trade as an organization dedicated to supporting your needs is working to help you build connections and relationships, to learn about the opportunities that ASEAN presents and to exchange your views on them with key stakeholders, our team of experts, and your fellow members. We will continue to find creative ways to do this and hope that in the process, we can keep up our gold standard for delivery.

On March 9, Malaysia’s Prime Minister Muhyiddin Yassin announced the appointments of 31 ministers to his cabinet. The cabinet includes four senior ministers to coordinate between ministries, particularly matters of the cabinet related to economic, security, infrastructure development, education and social sectors. Prime Minister Muhyiddin has stated with the appointment of the four senior ministers there is no need for a deputy prime minister. Parti Pribumi Bersatu (Bersatu) has 11 minister postings (two of which senior ministers), up from Mahathir's cabinet of 5 minister postings. Bersatu holds 36 seats out of 222 in parliament. The United Malays National Organization (UMNO), representing 39 seats in parliament, has 9 portfolios, while the Sarawak coalition (United Bumiputera Heritage Party, PBB and Gabungan Parti Sarawak, GPS) was given 5 and the Malaysian Islamic party (PAS) 3. Appointees for both the Minister of Finance and Minister in the Prime Minister's Office (Religion) came from outside of Parliament and will need to be appointed to the Senate before taking their positions. Women make up 23 percent of the cabinet with 5 minister posts and 2 deputy ministers. All cabinet members have been vetted by the Malaysian Anti-Corruption Commission (MACC) and the Royal Malaysian Police. Last week, Prime Minister Muhyiddin delayed parliament's next sitting by two months to May 18 amid concerns that a no-confidence vote would be raised against him. The country will have to wait until May 18 to see if his administration has the support of a majority of parliament. A full list of cabinet appointments can be found here.

On March 16, Malaysia’s Prime Minister Muhyiddin Yassin announced a 14-day Movement Control Order (MCO), to be in effect from March 18 to March 31. The order includes the requirement that all business premises close except for those providing essential services. Overnight, the Council worked to ensure this list of essential industries was expanded and now include those involving food/beverage, household products, personal protective equipment, pharmaceuticals, packaging materials and printing (including ink), medical and surgical devices (including parts), oil and gas, petrochemicals, chemicals and chemical products, and electrical and electronics (E&E), including semiconductors. Companies that qualify as essential can apply to the Ministry of International Trade and Industry to continue to operate under the movement control order while taking compulsory precautions, including reducing their workforce, complying with local output requirements and specific safety measures. Many companies are still impacted either directly or through their suppliers and the Council is continuing to work on this issue. The MCO also restricts Malaysians from leaving the country, impacting many companies’ operations in Singapore that rely upon a Malaysian workforce. While many workers were able to cross and stay in Singapore for the duration of the MCO, the Council continues to engage both the Singaporean and Malaysian governments to ensure Malaysian workers that wish to continue working in Singapore are able to for the duration of the MCO.

The Council’s annual mission to the ASEAN Finance Ministers and Central Bank Governors Meeting (AFMGM), which was set to take place from March 26-27 in Ha Long Bay, Vietnam has now been postponed, given the postponement of the AFMGM itself. We are in close communication with the ASEAN Secretariat and will keep members apprised as soon as new dates have been set. Our annual business mission to Myanmar (Yangon, Nay Pyi Taw, and Mandalay) is tentatively set to take place on April 27-30. We are working closely with the Government of Myanmar and the U.S. Embassy in Yangon on travel and safety procedures, in the event that we decide to move forward with this mission. We expect to make a formal announcement on whether to proceed with the Myanmar Business Mission at the beginning of April.

March was also an active month on the data protection and privacy front, with the Council putting forward various advocacy submissions on Malaysia’s review of their Personal Data Protection Act 2010, the Philippines’ proposed amendments to their Data Privacy Act 2012 (House Bills 1188 and 5612), and Vietnam’s draft outline on Personal Data Protection. We are also in the process of finalizing our submission to Indonesia’s Parliament on their Personal Data Protection Bill (Bahasa | English). While the timing of the release of these four draft data protection regulations does not appear to be concerted effort by ASEAN, it emphasizes the growing importance that the region places on either adopting or updating their data governance frameworks. These updates are timely as the Council continues to monitor updates on the ASEAN Framework on Digital Data Governance, and looks to further update our industry recommendations, to support regional efforts such as the ASEAN Data Management Framework and the ASEAN Cross Border Data Flows Mechanism. Looking ahead, we hope to continue developing our regional strategy and Council position on data governance, to better position the Council as a partner and resource to ASEAN Member States looking to strengthen their digital data governance ecosystems.

You have my best wishes and those of the entire Council staff for your health and welfare of your family, team and company. We will all make it through this significant challenge, but your support will be crucial to the Council’s success. We are grateful for your support and membership and look forward to continuing to work together to advance your business in ASEAN.

Sincerely,

Alex

 

March Highlights

On March 4, the Council delegation met with Prime Minister Nguyen Xuan Phuc to discuss key priorities for Vietnam’s 2020 ASEAN Chairmanship, the 25th Anniversary of U.S.-Vietnam bilateral relations, and overall trade and investment cooperation and opportunities. Following the meeting, Prime Minister Phuc and United States’ Ambassador to Vietnam Daniel Kritenbrink witnessed the signing of a Memorandum of Understanding between the Council and the Ministry of Industry and Trade (MOIT) on strengthening industrial trade and cooperation.

During the annual Business Mission to Vietnam on March 3-5, the Council delegation met with key Government officials, most notably Prime Minister Nguyen Xuan Phuc on March 4. Over the course of three days, the delegation also engaged Chairman of the Central Party Committee on Economic Affairs Nguyen Van Binh, Chairman of the Office of the Government Mai Tien Dung, Minister of Planning & Investment Nguyen Chi Dung, Minister of Information and Communications Nguyen Manh Hung, Minister of Culture, Sports & Tourism Nguyen Ngoc Thien, and leaders of other key Ministries and State agencies.

The Council met with Vice Minister of Health Truong Quoc Cuong during its annual Health & Life Sciences Industry Mission to Vietnam on March 5, 2020. Following the meeting, the delegation of 18 companies, the Council's largest industry mission to date, met with leaders of the Ministry of Health (MOH) International Cooperation Department and other agencies to share progress of projects under the Council’s Memorandum of Understanding with MOH, which was signed in November 2015.

 

Country, Industry and Advocacy Updates

 

COVID-19 Update

ASEAN
Following the 26th meeting of the ASEAN Economic Minister Retreat in Da Nang, Vietnam on March 10, the ASEAN economic ministers issued a statement on policy responses aimed at bolstering ASEAN’s economic resilience in light of the rapidly spreading COVID-19 outbreak. The statement outlines collective action to mitigate COVID-19’s economic impact, calling for an open trade and investment environment and coordinated information-sharing within the region. To read the full statement, please click here. Policy responses include using digital technologies in helping micro, small, and medium enterprises (MSMEs) continue operation during the outbreak, strengthening supply chain resilience through implementation of the Master Plan on ASEAN Connectivity (MPAC) 2025, and leveraging existing trade platforms like the ASEAN Single Window (ASW) to increase supply chain connectivity. Also at the regional level, the Jakarta-based ASEAN Emergency Operations Centre (EOC) Network for public health emergencies (ASEAN EOC Network) is one of the primary mechanisms utilized by the ASEAN Plus Three Health Cooperation – which includes China, Japan and South Korea in addressing the COVID-19 pandemic. The network ensures continuous efforts in the implementation of the International Health Regulation (IHR) and Asia Pacific Strategy for Emerging Diseases to enhance capacities to prevent, detect and respond to public health threats.


Brunei Darussalam
The Government of Brunei announced that starting on March 16, Bruneian citizens, permanent residents (PRs) and foreigners holding valid identification cards (ICs) are not allowed to leave the country except for medical treatment, attending court hearings or studies overseas. If individuals from the above categories wish to travel they will need to write an email to travelapplication@jpm.gov.bn with the scanned documents to obtain official permission from Prime Minister’s Office. The Government of Brunei has also expanded the list of nations which visitors are currently prohibited visitors from entering the country to now include Italy and Iran. The travel restrictions were expanded following Brunei’s existing ban on foreign travellers from China’s Hubei, Jiangsu and Zhejiang provinces that was put in place on January 30.

Cambodia
As of March 23, Cambodia has a total of 86 confirmed cases of COVID-19. The Cambodian Ministry of Health (MOH) has announced a 30-day suspension of entry into Cambodia on “foreigners traveling from” the United States, France, Germany, Italy, and Spain. The suspension went into effect on Tuesday March 17. Travelers are required to complete a health declaration form before disembarkation in Cambodia. Cambodia has placed thermal scanners and quarantine teams at the three international airports in Phnom Penh, Siem Reap, and Sihanoukville, and at border checkpoints. Screening, however, is minimal.

Indonesia
On March 13, the Government of Indonesia announced a $8.1 billion fiscal stimulus plan, in form of tax cut for manufactures and income tax exempt for their workers, to push the country’s budget deficit to 2.5% of GDP amid a bear territory stock index and 8.93% currency decline since January. The plan builds on the first stimulus package of $725 million released last month that focused on the tourism, airline, and property through a series of tax breaks. On the monetary side, Bank Indonesia (BI) cut its interest rates by 25 basis points (bps) last month to 4.75 percent, lowered Deposit Facility rates by 25 bps down to 3.75%, as well as Lending Facility rates by 25 bps to 5,25%. BI also bought 14 trillion rupiah in government bonds on March 12 and 13 to support financial markets. Additionally, the Indonesian government has relaxed rules surrounding restructuring of bank loans to MSMEs and easing of certification processes for exporting and importing goods.

As of March 23, Indonesia has not released new import bans related to the pandemic or ordered a lockdown despite having the highest mortality rate of 9.3 percent, with 48 deaths out of total 514 coronavirus cases. Meanwhile, 150,000 rapid test kits to diagnose coronavirus or COVID-19 have arrived from China.

Laos
On March 19, Prime Minister Thongloun Sisoulith announced that the Lao government was suspending the issuance of foreign tourist visas for 30 days. Individuals already holding an entry visa are required to have a health certificate before entering the country. The Lao Government has also instructed various business against increasing the price of consumer goods and services. Businesses facing operational obstacles during the outbreak are encouraged to report issues to the Industry and Commerce Department.


Malaysia
On March 11, Prime Minister Muhyiddin announced that the Malaysian government has set up an Economic Action Council (EAC) to mitigate the COVID-19 outbreak's effects on the domestic and regional economy. The prime minister will chair the EAC, which met for the first time on March 16 and will meet every following Monday. In a press conference on March 16, Muhyiddin stated that the new government will incorporate additional measures to the $4.8 billion economic stimulus package announced on February 27 by former Prime Minister Mahathir Mohamad in capacity as interim prime minister and ensure the package's implementation. These measures include a 2% nationwide electricity discount for industrial, commercial, and domestic users and a monetary assistance scheme of up to RM600/month for employees facing no-pay leave. Malaysia has also sped up public sector investment such as the country's National Fiberization and Connectivity Plan and East Coast Rail link.

The previous government's stimulus package outlines a three-pronged approach: (1) easing the cash flow of affected businesses; (2) assisting affected individuals; and (3) stimulating demand for travel and tourism. On the financial front, the package includes plans for BNM to form an RM2 billion working capital relief facility for small and medium enterprises (SMEs) at a 3.75% interest rate, and for government-owned Bank Simpanan Nasional to divert RM200 million toward a microcredit facility that offers 4% interest rate financing to affected businesses.

The package focuses heavily on the tourism sector, which has been hit particularly hard by the COVID-19 outbreak; estimates from the Asian Development Bank show that Malaysia's tourism industry may lose up to RM5.4 billion, while the Malaysian government predicts losses of RM3.3 billion in the first two months of this year. Between April and September 2020, businesses in the tourism sector can revise 2020 profit estimates without penalty and defer monthly income tax payments. Other tourism assistance entails 15% electricity bill discounts, exemption of the 6% service tax for hotels, and payments/allowances for tourist employees. The package also includes RM50 million in skills course subsidies for 100,000 Malaysians, reduction of the Employees Provident Fund (EPF) contribution by employees from 11% to 7%, and grants of RM1,000 to 10,000 to local entrepreneurs to promote e-commerce sales.

On March 16, newly appointed Prime Minister Tan Sri Muhyiddin Yassin stated that all of Malaysia will be under movement control from March 18 to 31 amid the dramatic rise of COVID-19 cases in the country over the last week. The decision was made via the Prevention and Control of Infectious Diseases Act 1988 and the Police Act 1967. PM Muhyiddin specified that movement control measures would include prohibition of religious, sports, and cultural congregations. All places of worship and business premises are required to close except for stores and markets selling basic necessities. Malaysians will also be prohibited from leaving the country and restrictions will be placed on tourists or foreign visitors attempting to enter. Malaysians who have returned from abroad must undergo a health check-up and self-quarantine for 14 days. All nurseries, government and private schools, and public and private universities will be closed. In addition, government and private premises will be closed except for those providing essential services, which include water, electricity, telecommunications, post, oil, gas, broadcasting, fuel, pharmacy, banking, finance, fire and rescue, prisons, ports, airports, security, defense, cleaning, food, and retail supplies. Muhyiddin’s statement added that Malaysia currently maintains a sufficient supply of food, life essentials, and face masks, and that the Domestic Trade and Consumer Affairs Ministry will continue to monitor the country’s supply. Malaysia has seen a large spike in COVID-19 cases in the past week, with 1,518 cases confirmed as of March 23 – the highest number of cases in the ASEAN region.

Myanmar
On March 23, Myanmar’s Ministry of Health and Sports confirmed the first two cases of COVID-19 in the country.

Since March 13, the Myanmar Government had announced the restriction of mass gatherings and public events including the traditional Thingyan water festival, until the end of April. The Government had also called for public's participation to stay home and self-quarantine to prevent the outbreak of the virus. Led by State Counsellor Daw Aung San Suu Kyi, an emergency meeting was conducted relating to COVID-19 on March 12. At the meeting, the discussions focused on speeding up administration of prevention and response to the spread of COVID-19, reduction of repercussions caused by the virus on trade and the national economy, finding solutions for the country to assist and minimize losses incurred by the employers and employees of factories and workshops that had to close down. A committee had been established to mitigate the economic impacts of COVID-19 on Myanmar’s economy and is chaired by Minister of Investment and Foreign Economic Relations U Thaung Tun, who also serves the added roles of National Security Advisor and Chairman of the Myanmar Investment Commission.

On March 21, Myanmar's Foreign Affairs Ministry announced a temporary suspension of issuance of visas on arrival and e-visas for all countries in a move to prevent the spread of the outbreak. The suspension will be effective until April 30, with the exception of diplomats accredited to Myanmar, resident United Nations (UN) officials and any foreign nationals who intend to travel to Myanmar on compelling reason or on important official mission. Additionally, all incoming travelers including Myanmar nationals from the United States, Switzerland, Britain, the Netherlands, Austria, Belgium, Norway, Sweden and Denmark will be put under mandatory facility quarantine of up to 14 days upon their arrival in the country.

Philippines
On March 16 in the Philippines, President Rodrigo Duterte announced a P27.1 billion stimulus package designed to designed to stem the spread of COVID-19 and its economic ramifications. The package entails P3.1 billion for medical efforts including the provision of test kits, P2 billion for wage subsidies for affected firms and workers, P14 billion to support the tourism industry, and other programs for social security and microfinance funding. In a dramatic move, the Philippines also indefinitely suspended all stock, bond, and currency trading on March 17 to “ensure the safety of employees and traders in light of the escalating causes of the coronavirus disease,” according to PSE’s chief executive Ramon Monzon. On March 16, the governor of the country’s central bank confirmed that interest rates will be cut by at least 25 basis points during the bank’s meeting on March 19.

On March 24, the Philippine House of Representatives agreed to adopt Senate Bill 1418 entitled “Bayanihan Act of 2020” seeking to declare a national emergency and grant the President of the Philippines for a limited period and subject to restrictions, to exercise powers necessary and proper to carry out the declared national policy. The bill is expected to be transmitted for President’s signature on the same day, Tuesday, March 24. Philippines Department of Trade and Industry has issued Memorandum 02-08  and Advisory on IATF ID to clarify coverage and procedures for covered establishments affected by the recent enhanced community quarantine over the Philippines’ largest island, Luzon. Memorandum from Executive Secretary dated March 16, 2020 as updated by the Memorandum dated March 18, 2020 instruct which establishments shall remain operational under a skeletal workforce while observing safety measures such as strict social distancing. These include those providing basic necessities related to food and medicine production, banks, money transfer services, power, energy, water and telecommunication supplies and facilities. Business process outsourcing (BPOs) and export-oriented industries shall also be operational on a skeletal workforce. Hotels are not allowed to operate except those with guests who have bookings for foreigners as of March 17, those with long term leases, and those accommodating employees from exempted establishments. Transit to and from these establishments within the area covered by the ECQ is allowed, however mass public transport is suspended. Movement of cargo within, to, and from Luzon shall be unhampered. Overseas travel will be limited to Overseas Filipino Workers and foreign nationals. Inbound international passengers transiting in Luzon during the ECQ shall be allowed entry subject to applicable quarantine procedures.

Singapore
Last month, Singapore announced S$4 billion of relief funding for workers and businesses through co-funding of business costs and tax relief. The Singaporean government plans to release a second stimulus package designed to assist small and medium enterprises and retrenched workers. On March 14, the Monetary Authority of Singapore issued a statement that it has maintained a higher level of liquidity in the country’s banking system and that Singapore dollar interest rates have decreased in line with global rates.

Measures taken by the Singaporean government thus far include splitting frontline staff into teams and encouraging backend staff to work from home. As advised by MOH, employers are advised to cancel or defer non-essential large-scale events with 250 participants or more. Those who choose to proceed should take additional precaution such as temperature screening and reminding participants not to attend if they have recent travel history to affected area(s). Travelers are advised to defer all travel to Hubei province (China) and to defer all non-essential travel, including but not limited to mainland China, South Korea, Iran, Italy, France, Spain, Germany, ASEAN countries, Japan, Switzerland and the United Kingdom. Singapore’s ASEAN-wide travel ban made an exception for Singaporeans and Malaysians using sea and land crossings with Malaysia. However, Malaysia announced a 14-day Movement Control Order, which can be accessed here. The Singapore Government has worked with the private and public sectors to make available a range of short-term housing options for workers affected by lockdown in Malaysia and could not stay with relatives, friends or colleagues. The Council has sent a letter to the Singapore Ministry of Trade and Industry on working with Malaysia on this issue.
On Mar 15, 2020 the GOS announced the implementation of additional travel restrictions in Singapore. A few key points below.

  • Visitors from France, Germany, Italy, and Spain will not be allowed to enter or transit.
  • Visitors with recent travel history to any ASEAN country, Japan, Switzerland or the UK will be issued a 14-day mandatory stay-home notice (i.e., not allowed to leave the house). This does not apply to sea and land crossings from Malaysia, where separate arrangements are being worked out.
  • In addition, Singaporeans are advised to defer all non-essential travel abroad for the next 30 days.
  • In the last three days, Singapore has seen an increase of 25 new COVID-19 cases with more than three-quarters being imported cases. Some cases were already symptomatic and travelled to Singapore to seek medical care.
  • Staring on 23 March 2020, 2359 hours, all short-term visitors (from anywhere in the world) will not be allowed to enter or transit through Singapore. Furthermore, the Ministry of Manpower will only allow the entry/ return of work pass holders [2], including their dependents, for those providing essential services, such as in healthcare and transport.
  • As previously announced, all Singapore Citizens, Permanent Residents and Long Term Pass holders [3] returning to Singapore will be issued a 14-day SHN. [4] Persons under SHN must remain in their place of residence at all times.
  • The Singapore-Malaysia Special Working Committee has agreed that Malaysians with Singapore work permits will continue to be able to work in Singapore during this period, with appropriate accommodation arrangements. The transport of all types of goods between Malaysia and Singapore will also be facilitated. Discussions in the Committee are ongoing.

Thailand
On March 10, Thailand’s Cabinet approved a massive US$12.7 billion stimulus package to combat COVID-19’s economic fallout. That package is comprised of 150 billion baht of soft loans with 2% interest rates, reduction of withholding taxes for businesses from 3% to 1.5%, support for utilities costs, and a 20-billion-baht fund for firms and workers hit especially hard by the outbreak. In February, the Bank of Thailand (BoT) cut benchmark interest rates by 25 points to a record low of 1% and is likely to further cut rates at its next policy review on March 25. Thailand is also expediting VAT refunds to business, with all payouts to be received within 15 days of submission. Thailand faces particularly strong economic headwinds from COVID-19; Kasikorn Research Center recently decreased its forecast for Thailand’s GDP growth to 0.5%, while data compiled by Bloomberg predicts that Thailand has the highest odds of recession (30%) among Asian nations.

On March 19, Prime Minister Prayut Chan-o-cha introduced a new measure effective March 22 that requires all foreign visitors to present a health certificate and proof of health insurance upon arrival. The health certificate must be issued no more than 72 hours prior to travel and confirm that the individual has tested negative for COVID-19. The health insurance policy must show minimum coverage for coronavirus of at least USD$100,000.

As of Sunday March 22, Thailand has banned the movement of people at all ports and border checkpoints. Transportation of goods at designated checkpoints is still permitted. Land-based transport is limited to one driver per truck and sea-based transports are limited to 5-member crews. Both transport drivers and boat crews are subjected to a mandatory health screening at the border before entrance is allowed.

Vietnam
On March 3, Vietnamese Prime Minister Nguyen Xuan Phuc announced a US$1.3 billion fiscal package of tax breaks, delayed tax payments, and government spending on infrastructure. Vietnamese commercial banks also stated they will offer a US$12.39 billion preferential credit package to impacted businesses that will reduce interest rates and re-schedule debt repayment.


On March 20, Prime Minister Phuc ordered the suspension of all international flights to Vietnam, and later on March 23 he announced that Vietnam had entered the third phase of the fight against COVID-19 as risks of spreading between communities became higher. The next 20 – 25 days will be a big challenge to the country’s efforts in combating the outbreak, and measures have been put in place including a requirement to wear face masks in public and on public transport, restrictions on gatherings of more than 50 people (including funerals, weddings, and religious gatherings), and temporary closings of entertainment venues. The Vietnamese Government officially approved a temporary travel ban on all foreigners entering Vietnam effective March 22 and launch of a government-issued Health Declaration mobile app “NCOVI” (available on both iOS and Android OS) for incoming travelers and domestic citizens to disseminate information and report personal health conditions. This app was created by the Ministry of Information and Communications and the Ministry of Health. Vietnam’s responses have been lauded by foreign governments and international institutions as the Government remains committed to the 6.8% GDP growth target for 2020.

 

Key Developments

  • U.S. and Singapore Announce Establishment of a US$60 Billion Currency Swap Facility
    As part of a growing set of policy responses to COVID-19 by central banks around the world to increase U.S. dollar liquidity outside the United States and ease pressures of credit markets, on March 19, the U.S. Federal Reserve and the Monetary Authority of Singapore (MAS) announced the establishment of a six month $60 billion currency swap facility. The facility will allow MAS to increase U.S. dollar liquidity into its national financial sector. The Fed has now extended the U.S. dollar liquidity swap line arrangements to nine more central banks, including MAS. The others are from Australia, Brazil, Mexico, Denmark, South Korea, Norway, New Zealand and Sweden. Singapore also has multiyear bilateral currency saw agreements in place with the central banks of China, Japan, and Indonesia.
  • Singapore prepares for general elections amid virus outbreak
    On March 13, Singapore released its Report of Electoral Boundaries Review Committee. This report, which was submitted to the Prime Minister two days earlier on March 11, revises Singapore’s electoral boundaries, a move that is a typical precursor to the holding of its general elections. Singapore’s Elections Department also announced that the Updated Registers of Electors have been prepared and are open for public inspection until March 27. The city-state had been preparing to hold its elections this year when it had to shift its attention towards addressing the spread of Covid-19. The general elections must be held by April 2021. Prime Minister Lee Hsien Loong said that the government could either hope that the virus situation will stabilize before the end of his term and call for elections later, or to call for a vote early. In response to the releases, the People’s Action Party held a meeting for a briefing on Covid-19 situation and campaign strategies as Singapore battles the spread of the infection. Meanwhile, opposition parties urged the government to postpone the elections until there is no more outbreak considering that voting is compulsory in Singapore. Singapore authorities called the public to reduce close contact and cancel ticketed events with more than 250 participants. As of March 16, Singapore has reported 266 cases of Covid-19.
  • Singapore now reviewing bids for award of 5G licenses
    Singapore’s four mobile operators submitted bids for 5G licenses in the country. The Infocomm Media Development Authority (IMDA) received three bids from Singtel, TPG Telecom, and a joint bid from StarHub and M1. IMDA proposed that the mobile network operators spectrum packages to be awarded will comprise 100MHz of 3.5GHz frequency, each paired with one lot of 800MHz of millimeter wave. The base price of one 100MHZ lot was set at S$55 million (US$39.7 million). It is expected that Singapore will award the licenses by mid-2020 and that it will have two full-fledged standalone 5G networks covering the island by the end of 2022. Full island wide coverage is expected by 2025. Bids will be assessed based on criteria which include financial capability, network security design and resilience, network performance and rollout, and spectrum offer price. Operators must also be willing to sell network services wholesale to other mobile providers who are not issued any airwave lots. Read more.
  • Laos Ministry of Commerce Improves Enterprise Registration Process
    On February 21, Mr. Somphuang Phienphinith, Director General of the Enterprise Registration and Management Department announced improvements to Laos’ business registration process for foreign investors and local entrepreneurs. The new registration process cuts down the number of steps from ten to three: 1) register the business with a background check, 2) obtain a business stamp, and 3) register the workforce. The timeline of the registration process has also been reduced from 178-days to 30-days. The aim of the new enterprise registration process is to improve Laos’ position in the World Bank’s Ease of Doing Business rankings in terms of starting a business, attracting quality investments and enhancing the competitive capacity of domestic businesses.
  • Thailand’s 5G auction raises more than 100 billion baht
    On February 16, Thailand’s telecommunications regulator, the National Broadcasting and Telecommunications Commission (NBTC), raised 100.52 billion baht (US$3.2 billion) in its 5G spectrum auction. Operators who participated in the auction secured 48 licenses ahead of the expected 5G commercial rollout later this year. Thailand’s largest mobile operator, Advanced Info Service, won 23 licenses across all three spectrum bands. It now has one license for the 700 MHz range, 10 for the 2600 MHz band, and 12 for the 26 GHz band. Big telecom operators True Corporation and Total Access Communication acquired 17 and 2 licenses, respectively. Together, state-run national telecom companies CAT Telecom and TOT won six licenses. 5G promises data speeds up to 100 times faster than 4G and is expected to drive the country’s digital economy once it is supported by infrastructure. For this reason, the auction was actively attended by mobile operators despite the current lack of commercially available devices that support 5G technology. 5G is expected to expand the networks of Internet of Things devices in manufacturing, transport, healthcare, agriculture, and more. The NBTC projects that adopting 5G in 2020 could contribute 177 Billion baht (US$5.58 billion) to the country’s economy, or a 1.02% of the gross domestic product. It is expected that the initial 5G roll-out in Thailand will focus on enhanced mobile broadband and fixed wireless access service to boost data bandwidth and connection reliability.
  • CITIRA nears bicameral discussions amid concerns over effects, timing
    The Philippine Senate is currently tackling at second reading the Corporate Income Tax and Incentives Rationalization Act (CITIRA) which amends the National Internal Revenue Code. The CITIRA lowers the corporate income tax (CIT) rate, reorients fiscal incentives toward strategic growth industries, and makes incentives available to investors making net positive contributions. Senate Bill 1357, principally authored by Senator Pia Cayetano, reduces the CIT by 1% every year, from the current 30% to 20% by 2029, beginning January 1, 2020. This will make the rate of CIT at par with other countries in Southeast Asia whose rates are at the 17%-25% range. However, to anticipate possible negative effects of the tax amendments, the President may suspend the reduction by 2025 should the projected deficit target as a percentage of the Gross Domestic Product exceed the programmed deficit as determined by the Development Budget Coordination Committee. Read more.
  • Philippines Executive Order caps retail and wholesale prices of more than 100 medicines
    On February 17, 2020, Philippine President Rodrigo Duterte signed Executive Order No. 104 titled "Improving Access to Healthcare through the Regulation of Prices in the Retail of Drugs and Medicines” to impose price regulation through a maximum retail price (MRP), maximum wholesale price (MWP) on certain drugs and medicines. It is expected that this measure will reduce the price of around 133 drug formulas by around 56% from their prevailing market prices. Its annex includes the following medicines: anti-hypertensives, antidiabetic drugs, anti-neoplastic/anti-cancer drugs, immunosuppressants, analgesics, anticoagulant, anti-agina, antiemetics, antidepressants, an iron chelating agent, a growth hormone inhibitor, an antiviral drug, a fibrinolytic, a mucolytic, a parenteral nutritional product, a phosphate binder, a surfactant, and an hematopoietic agent. Also included are psoriasis, seborrhea and ichthyosis preparations, anti-asthmatic and chronic obstructive pulmonary disease preparations, and agents affecting bone metabolism. Read more.
  • Indonesia Establishes a Sovereign Wealth Fund
    Indonesia will establish a sovereign wealth fund that will be regulated in the omnibus bill on job creation. Its objective is to manage and allocate a sum of funding and/or state assets. The fund’s assets will be in the form of state capital injection, assets/business development return, state-owned enterprise assets, grants and other defined sources. According to Minister Luhut, its main purpose of the fund is to help mobilize resources to finance the country’s infrastructure development projects. Importantly, it will also be structured differently than how sovereign wealth funds are traditionally thought to be. Based on Russia’s Direct Investment Fund (RDIF), it will raise the required funds from private investors as opposed to the country’s reserve funds.On January 13, Minister Luhut stated that the United Arad Emirates (UAE), Japanese company Softbank and the U.S. International Development Finance Corporation (DFC) were among the investors in the sovereign wealth fund and that other parties have signaled they will also join. Read more.

Current Advocacy

  • Singapore's call for feedback on proposed amendments to food regulatory rules
    The Council would like to bring to members’ attention that the Singapore Ministry of Health (MOH), Health Promotion Board (HPB), and Singapore Food Agency (SFA) are seeking feedback from stakeholders on proposed amendments to the Food Regulations to introduce a ban on the use of partially hydrogenated oils (PHOs) as an ingredient in all fats, oils and pre-packaged foods sold in Singapore from June 2021. The consultation period is open from March 13, 2020 until May 12, 2020. It may be recalled that MOH announced on 6 June 2019 its decision to introduce a ban on PHOs, the key source of artificial trans fat in diets, as part of the Singapore’s Government ongoing efforts to create a healthier environment for Singaporeans. This will apply to all foods sold in Singapore, including fats, oils, and pre-packaged foods, whether locally manufactured or imported from overseas; and will replace the existing 2 percent limit on trans fat content in fats and oils sold in Singapore. To give effect to the ban, MOH, HPB, and SFA propose, among others, to insert regulation 36A which bans the import and/or use of partially hydrogenated oils (PHOs) as an ingredient or as an ingredient in the manufacture of any other edible fats or oils or any prepacked food. Please click here for the full text of the proposed regulation and more information on the public consultation. For members who are interested to give input through a Council submission, please email Lilibeth Almonte-Arbez at lalmonte@usasean.org or Nguyen Thi Phuong Thao at tnguyen@usasean.org.
  • Update on Malaysia Digital Policy Consultative Forum
    The 2020 ASEAN-US Digital Policy Consultative Forum (DPCF) on "Strengthening Malaysia's Digital Economy: Leveraging Regional and Global Partnerships", initially scheduled for March 10-11 will be postponed (exact dates to be determined, but the Council is targeting mid-July). We are currently following up on options with the Malaysia government, and will provide an announcement as soon as we have a firm date set.
  • Indonesia Personal Data Protection Bill
    The Council has received an updated Personal Data Protection Bill (Bahasa | English), which is currently with Commission I of the House of Representatives (DPR) for further deliberation. The Council willsubmit industry recommendations on the Personal Data Protection Bill to the Chairman on Commission I next weekn. To receive a copy of our draft submission or for questions, please contact Angga Antagia at aantagia@usasean.org, Steven Gunawan at sgunawan@usasean.org and Jamie Lim at jlim@usasean.org.
  • Malaysia Public Consultation on the Review of Personal Data Protection Act 2010
    On February 14, the Personal Data Protection Department (JPDP) of the Ministry of Communications and Multimedia Malaysia released Public Consultation Paper No. 01/2020, on the Review of Personal Data Protection Act 2010. The Council submitted its response to the JPDP on March 10 and it is attached. For questions, please contact Tina Jamaluddin at tjamaluddin@usasean.org and Jamie Lim at jlim@usasean.org.
  • Vietnam Draft Decree on Personal Data Protection (PDP)
    On December 27, 2019, the Government of Vietnam published an outline of the draft decree on "Personal Data Protection" (PDP Decree) on its government portal (accessible at this link). The Council’s final submission is attached. If you have any questions, or for an unofficial English translation of the PDP Decree, please contact Vu Tu Thanh at tvu@usasean.org and Jamie Lim at jlim@usasean.org.
  • Philippines Proposed Amendments to the Data Privacy Act 2012
    The Council has shared its comments on House Bills 1188 and 5612, which proposes amendments to the Philippines Data Privacy Act (DPA) of 2012, with the House ICT Committee. Please note that the Technical Working Group (TWG) meeting, originally scheduled for March 11, has been postponed until further notice due to COVID-19. Congress will adjourn on March 14 and is expected to resume on May 3. The Council will continue to monitor for any updates. Please contact Lilibeth Almonte-Arbez at lalmonte@usasean.org and Jamie Lim at jlim@usasean.org for questions.
  • Call for Input: Philippines Foreign Investment Act (FIA) Amendments
    The Council has drafted a letter to the Chair of the Philippines Senate Economic Affairs Committee regarding Senate Committee Report No. 20 (SBN 1156), which amends the Foreign Investment Act. The letter raises concerns about a potentially far-reaching provision that would allow for foreign online businesses to be regulated as domestic market enterprises under the Foreign Investment Act as well as under “other relevant tax, corporate and other laws.” The Council is requesting that members send in any input on our draft letter by March 12. For a copy of the draft letter, please contact Lilibeth Almonte-Arbez at lalmonte@usasean.org, Jamie Lim at jlim@usasean.org, or Natalie Tantisirirat at ntantisirirat@usasean.org.
  • Indonesia Position Paper on Digital Taxation Best Practices
    The Indonesian government is currently drafting an Omnibus Bill on Taxation to simplify tax regulations and boost investment in Indonesia. The Bill will introduce corporate tax cuts and digital taxation, among others. The Directorate General of Taxation has extended an opportunity for the Council's member companies to recommend best practices on digital taxation from other countries to be considered in the drafting of Omnibus Law on Taxation, including: Value Added Tax (VAT) registration for digital services; VAT collection for digital services; and Import duty on digital goods. We would like to request members to share best practices, specifically noting the (i) country (ii) topic, and (iii) additional details about these best practices. The Council will send out the second call for inputs on March 23. Please contact Steven Gunawan at sgunawan@usasean.org and Jamie Lim at jlim@usasean.org for any questions
  • Indonesia Implementing Regulation on E-Commerce (GR 80)
    The Council will share feedback and recommendations on Government Regulation No.80/2019 on E-commerce (GR 80) with Indonesia Ministry of Trade. The Council hadthe first round of meeting to discuss a collective policy recommendation to be submitted to the Trade MInister , in anticipation of the upcoming implementing ministerial regulation on e-commerce. Please contact Mega Valentina at mega@usasean.org, Angga Antagia at aantagia@usasean.org if you have questions.
 

Looking Ahead

Upcoming Events

  • April 27-30: Myanmar Business Mission (Tentative)

See our full calendar

 
 

Country and Industry Updates

See our most recent Updates and Analysis for more detail: