Singapore Concludes FTA Negotiations with Pacific Alliance
On July 21, Singapore and the Pacific Alliance announced the conclusion of free trade negotiations granting Singapore status as the first Associated State for the trading bloc consisting of four Latin American countries: Chile, Colombia, Mexico, and Peru. The Associated State mechanism promotes free trade agreements and provides windows of opportunities for cooperation. For the Pacific Alliance (PA), the FTA would enable to explore areas for collaboration on the digital economy that may include the linking of Singapore’s national Single Window with the PA’s, port management and logistics, infrastructure and urban solutions, energy collaboration, and food trade. The PA states will also explore the Digital Economy Partnership Agreement (DEPA) upon Singapore’s suggestion.
Official Launch of OSS Business Licensing System
On August 9, the Government of Indonesia officially launched the updated version of the Online Single Submission (OSS) system, a web-based platform for business license facilitation. The system uses the so-called risk-based approach, which applies administrative requirements based on business risk. Businesses with low-risk ratings in health, safety, and environment will only need to acquire a registration number (NIB), while those deemed as high-risk must fulfil additional requirements, such as obtaining environmental permits. President Joko Widodo expects this licensing system reform, which was mandated by the Omnibus Law of Job Creation, to improve the ease of doing business for mSMEs and large businesses and to create more jobs.
Philippines 2022 Elections
Presidential elections in the Philippines have been held every 6 years since 1992 to elect the country’s President and Vice President. In May 2022, the country chooses not just the next President and Vice President, but also 12 Senators to fill the contested seats of the 24-member upper house and over 200 members of the House of Representatives. All local positions are also contested at the province, city, or municipal levels, except for the barangay, the smallest local government unit. The Philippine Constitution imposes strict term limits: 6 years for a President and Vice President, 6 years for the Senate (two consecutive terms allowed), and 3 years for members of the House of Representatives (3 consecutive terms allowed). The Commission on Elections (Comelec) has set the one-week filing of Certificates of Candidacy (COC) for all elective positions for May 9, 2022 National and Local Elections from October 1-8, 2021. The campaign period for candidates in national positions (President, Vice-President, Senator, and party-list groups) is from February 8 to May 7, 2022. Candidates in local elective positions (members of House of Representatives and regional, provincial, city, and municipal officials) may only campaign from March 25 to May 7, 2022. More information on the election and campaign periods may be found here.
Cambodia announced ‘Maybank-Bakong Cross Border Funds Transfer’
On August 11, the National Bank of Cambodia (NBC) and Maybank announced a real-time funds transfer service between Malaysia and Cambodia. The first phase of the launch will enable transfers from Malaysia to Cambodia, while the transfers from Cambodia to Malaysia will be rolled out later. Maybank customers in Malaysia may transfer funds directly to Cambodia via the bank’s MAE app, using only phone numbers of the recipients registered with a Bakong e-wallet. Launched in October last year, Bakong is Cambodia’s own central bank digital currency (CBDC) and is pegged as the new backbone of Cambodian digital payments and settlement infrastructure. The project was created to explore digital payments, encourage the use of local currency, and improve financial inclusion among underserved citizens in the country. According to Dr. Chea Serey, assistant governor and director general of central banking of NBC, the partnership between Maybank and Bakong is a significant step in promoting the development of fintech and enhancing cross-border connectivity between the two countries.
BIS and MAS Release Blueprint for M-CBDCs
The Bank for International Settlements (BIS) and Monetary Authority of Singapore (MAS) published a new blueprint for linking domestic real-time payment systems across borders. The joint project, titled Project Nexus, outlines how countries can unify multiple retail payment systems from different countries into a single network that allows users to make cross-border transfers instantly and securely via mobile devices. The project builds upon a previous bilateral linkage established between Singapore’s PayNow and Thailand’s PromptPay in April of 2021. The project is comprised of two main elements. The first involves nexus gateways, which are intended to coordinate payment sequencing, foreign exchange conversion, and compliance; and the second is a nexus scheme, which provides a governance framework for retail payment systems, banks, and payment service providers to coordinate with one another. The two-front structure is intended to enhance both the direct connections between payment systems in different countries as well as the overarching infrastructure within which those exchanges occur.
Indonesian Bond Trading Set to Slow Despite Leading Emerging Markets in Asia
Although Indonesian bonds have yielded higher returns than their ASEAN counterparts, foreign and private investment in Rupiah-denominated debt has begun to drop as the country faces rising COVID-19 case numbers and challenges to economic recovery. Indonesia leads emerging Asian nations in bonds yields, with Rupiah debt returning 3.9% last quarter and Indonesia’s total bond returns standing at 1.6% in July. Nonetheless, markets have begun to retract as the country witnesses its latest surge in COVID-19 cases and struggles against the Delta variant, edging investors’ fears. U.S. Federal Reserve Chairman Jerome Powell said that there is a low risk of selloff in Indonesian debt for now, but the country needs to make progress on its economic recovery soon. However, fears over capital outflow from Indonesia due to U.S. rate hikes like the “taper tantrum” of 2013 remain overblown, given the relatively large foreign-reserve stockpiles, stable inflation, and strong local-currency bond markets. The Bank of Indonesia has also taken the initiative in increasing its purchases of government debt, not only to replace fleeing investors, but also to become a source of affordable and less volatile flows for the Indonesian Government to fund its fiscal spending and stimulate economic recovery. As Bank Indonesia steps in to fill the gap left by private investors, Indonesia is likely to see strengthened economic resilience and market stability in the medium term.
Thailand Continues Securing FTAs to Boost Exports
The Commerce Ministry of Thailand is looking to propose negotiation frameworks for the Thai-EU Free Trade Agreement (FTA) and ASEAN-Canada FTA for cabinet approval in the third quarter of this year. When the Thai-EU FTA becomes effective, Thailand will benefit from trade and investment expansion from its fifth-largest trading partner, the EU. The joint understanding document, which sets the framework for talks, includes trade in goods, trade in services and investments, intellectual property, government procurement, and e-commerce. Furthermore, the ASEAN-Canada FTA, if it goes into effect, is expected to boost economic growth by almost 2%, or US$7.967 billion. Other efforts to boost exports by Thailand include securing mini free trade agreements (mini-FTA) with Hainan, China, Gyeonggi, South Korea, and Telangana, India, by the end of August. The country has also signed a memorandum of understanding (MOU) to create a mini-FTA with Kofu, Japan, which will mutually benefit both locales in the areas of manufacturing, joint marketing, and technology transfers.
Indonesian Halal Industry Update
The Ministry of Religious Affairs recently released a new draft amendment to Decree 464 / 2020 on the Types of Product and Consumer Goods that are Required to be Halal Certified. The regulation defines 15 categories of products/consumer goods and outlines the role of the Halal Product Assurance Agency (BPJPH), Fatwa Commission of the Indonesian Council of Ulema, Halal Examination Agency, and related ministries. Currently, the draft is awaiting signature from the Ministry of Religious Affairs. Following the issuance of Government Regulation 39 / 2021 on Administration of Halal Product Guarantees, the Ministry of Finance issued Ministerial Regulation 57 / 2021 on Service Rate for BLU BPJPH at the Ministry of Religious Affairs. The implementing regulation outlines the service rate within the Halal Product Assurance Agency (BPJPH), which is divided into general service rate and supporting service rate. The provision on general services covers (1) Halal certification for good/services; (2) accreditation for Halal Examination Agency (LPH); (3) Halal auditor registration; (4) Halal auditor training services; and (5) Halal auditor and supervisor competency certification. Small and micro-sized enterprises will be exempt from the fee of Halal certification for good/services. Meanwhile, foreign enterprises who wish to acquire the certification can be charged 150% higher than the original service rate. The Government of Indonesia is set to launch a Halal product codification system in the fourth quarter of 2021 as part of the efforts to enhance its position in the global Halal value chain. According to the National Sharia Economy and Finance Committee (KNEKS), the Halal product codification system is based on the harmonized system (HS) coding system. Furthermore, by the end of 2021, the codification system will be integrated with the National Single Window Agency (LNSW)’s trading transaction data, which has streamlined data from 15 ministries and agencies – including the Ministry of Trade and Food and Drug Agency (BPOM), among others.
Call for Input: Draft Amendment to Decree 72 on the Management of Internet Services
The Vietnam Ministry of Information and Communication (MIC) recently released a new draft amendment to Decree No. 72/2013/ND-CP on the Management, Provision, and Use of Internet Services and Online Information. The amended decree will institute a variety of reforms, including enhanced regulations on live streaming services, obligations for child protection on social media platforms, and stricter provisions for the removal of illegal content. Please find linked an English copy of the Draft Amendment to Decree 72 on Management of Internet Services. The MIC is receiving feedback for the proposed amendments to Decree 72 until September 5. The Council is collecting inputs from members for consolidation and submission to the MIC. Please send your comments to Heidi Mah (firstname.lastname@example.org), Minh Vu (email@example.com), and Ryan DelGaudio (firstname.lastname@example.org).
Call for Input: Vietnam Draft Decree on the Law on Environment Protection
The Ministry of Natural Resources and Environment (MONRE) is working on a Draft Decree to add more details on articles in the Law on Environment Protection. We invite interested members to provide comments on the articles revised in the Draft Decree. Please find a copy of the Draft Decree and its annex attached. The Draft Decree is also available online at the MONRE website here. To submit comments (preferably in Vietnamese), please reach out to Nguyen Hien Chi (email@example.com) and Minh Vu (firstname.lastname@example.org). The deadline for input is COB 1st October (Hanoi Time). Previously, the Council had called for inputs on the second draft of the Draft Decree. However, the drafting team at MONRE has requested inputs on the initial draft instead.
Call for Input: Vietnam Draft Decree on Import Management on Refurbished Goods pursuant to the CPTPP
On August 24, the Vietnam Ministry of Industry and Trade (MOIT) published the Draft Decree on Refurbished Goods subject to Import Management pursuant to the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP). The Draft Decree is focusing on the regulations relating to refurbished goods (definition, limited list and administrative procedures for the importation) and will impact companies doing business in CPTPP markets, in the sectors of medical equipment, ICT, manufacturing, as well as logistics. The Council is collecting inputs and preparing a submission for the MOIT. Please send your inputs (preferably in Vietnamese) using the attached matrix to Bui Kim Thuy (email@example.com) and Nguyen Hoai Phuong (firstname.lastname@example.org) by COB Friday, September 10. For a copy of the the Draft Decree, the MOIT's report which provides more context to the Draft Decree, and the inputs from relevant Ministries (all in Vietnamese), please also contact Thuy and Phuong.