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PH Trade Up 11.8% In November

Fri, 12 Jan 2018 00:00:00 -0600

Trade performance showed faster expansion compared to the 9.4% year-on-year growth in November 2016.

Imports posted a hefty growth of 18.5% as all commodity groups registered positive growth rates, while exports grew by 1.6%—its slowest since November 2016—as agro-based products and manufactures registered declines, offsetting gains in mineral, forest, and petroleum products.

Continuous improvement of export competitiveness and identification of emerging markets for exports will help sustain Philippine merchandise trade growth, the National Economic and Development Authority (NEDA) said.

“Exports to ASEAN (Association of Southeast Asian Nations) and EU (European Union) look promising. Gathering of market intelligence, such as market profiles and emerging in-demand exports, as well as information dissemination to exporters should be further strengthened to boost trade, especially exports to East Asia,” Socioeconomic Planning Secretary Ernesto M. Pernia said in a statement.

In this regard, the Department of Trade and Industry’s (DTI) Export Assistant Network, which provides exporters access to relevant information, and Tradeline Philippines, an online database service that contains product and market profiles, are seen to play important roles.

Pernia added that the country’s economy is seen to continue its upward trajectory in 2018, especially with the government’s Build Build Build infrastructure program providing additional impetus to growth.

“The timely implementation of the government’s infrastructure program will be critical in bringing down the cost of doing business and, thus, should make our exporters more competitive,” Pernia said.

The NEDA chief further noted that, while the passage of the Tax Reform for Acceleration and Inclusion Act, or TRAIN, is expected to finance the government’s infrastructure program, inflationary pressures, as well as the possible rise of domestic interest rates, should be closely watched as this could dampen business and consumer sentiment.

source: https://www.portcalls.com/ph-trade-118-nov/

World Bank: East Asia growth to pick up in near term

Wed, 10 Jan 2018 00:00:00 -0600

##Global Economic Prospects

In 2017, the region continued to be a major driver of global growth, accounting for more than a third of it last year, mostly because of China’s significant contribution. Growth in China inched up in 2017—a deviation from the economy’s structural slowdown, related to softening in its fundamental drivers.

The modest acceleration of growth in the rest of the region was broad-based. Strong domestic demand was supported by improved confidence, accommodative policies, and a reversal of capital outflows. A recovery of commodity prices supported activity in commodity exporters.

The recovery in regional exports stemmed from the upturn in global trade and manufacturing, which in turn was encouraged by stronger capital spending in advanced economies and a rebound of imports in China and several other large emerging markets and developing economies.

In 2018, China is forecast to moderate to 6.4% from 6.8% in 2017, and to 6.2% on average in 2019-20, as rebalancing proceeds and credit growth decelerates.

Growth in the majority of commodity exporters is projected to accelerate in the near term, and negative output gaps—the legacy of the weakness of commodity prices in the wake of the global financial crisis—are expected to gradually close.

Among the large commodity exporters, Indonesia is forecast to accelerate to 5.3% in 2018 from 5.1% in 2017, as private consumption strengthens in line with gains in real wages. Growth is projected to remain strong at around 5% on average in 2018-20 in Malaysia, despite some moderation in investment and export growth.

Growth in commodity importers is projected to remain slightly above 5% on average in 2018-20. In Thailand, growth is projected to remain around 3.5% on average in 2018-20, reflecting recovery in merchandise exports and tourism.

In Vietnam, growth will slightly moderate to a still-strong 6.5% on average in 2018-20, supported by robust agricultural production and strong export-oriented manufacturing. The Philippines will continue to be the fastest growing economy in the Association of Southeast Asian Nations (ASEAN), despite some stabilization of investment growth. Cambodia is expected to maintain rapid expansion, supported by trade and FDI inflows.

Among smaller economies, a cyclical recovery is expected to continue in Mongolia, and get underway in Papua New Guinea and Timor-Leste, as domestic headwinds gradually dissipate. Lao PDR is expected to maintain a rapid pace of growth, led by the electricity sector.

Risks to the outlook have become more balanced. Stronger-than-expected growth among advanced economies could lead to faster-than-anticipated growth in the region, said the report.

On the downside, rising geopolitical tension, increased global protectionism, an unexpectedly abrupt tightening of global financial conditions, and steeper-than-expected slowdown in major economies, including China, pose downside risks to the regional outlook.

##Global growth to inch up to 3.1%

On a global scale, the World Bank forecasts global economic growth to edge up to 3.1% in 2018 after a much stronger-than-expected 2017, as the recovery in investment, manufacturing, and trade continues, and as commodity-exporting developing economies benefit from firming commodity prices.

However, this is largely seen as a short-term upswing. Over the longer term, slowing potential growth—a measure of how fast an economy can expand when labor and capital are fully employed—puts at risk gains in improving living standards and reducing poverty around the world, the World Bank warns in the outlook.

Growth in advanced economies is expected to moderate slightly to 2.2% in 2018, as central banks gradually remove their post-crisis accommodation and as an upturn in investment levels off. Growth in emerging market and developing economies as a whole is projected to strengthen to 4.5% in 2018, as activity in commodity exporters continues to recover.

Risks to the outlook remain tilted to the downside. An abrupt tightening of global financing conditions could derail the expansion. Escalating trade restrictions and rising geopolitical tensions could dampen confidence and activity. On the other hand, stronger-than-anticipated growth could also materialize in several large economies, further extending the global upturn.

source: https://www.portcalls.com/world-bank-east-asia-growth-pick-term/

PH Customs Chief Revives Tax Credit Body To Speed Up Release of TCCs

Sun, 24 Dec 2017 00:00:00 -0600

Customs Commissioner Isidro Lapeña on December 4 signed Customs Special Order (CSO) No. 74-2017, reconstituting TCC and TSC, which were dissolved in August last year by then customs commissioner Nicanor Faeldon, and transferred all applications for duty drawbacks, value-added taxes (VAT), and excise tax claims under the Office of the Commissioner (OCOM).

The reconstituted TCC, which will be under the direct supervision of Lapeña, is composed of the deputy commissioner of the Revenue Collection Monitoring Group as chairman, directors of Finance Service and Financial Management Office as co-vice chairs, and the Legal Service director and an OCOM representative as members.

The committee’s functions include recommending to the commissioner the approval of a tax credit issued by BOC; recommending approval of duty drawback claims processed by the Department of Finance’s (DOF) One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (OSS-Center); and approving and signing documents related to the utilization of tax credits.

The TSC, meanwhile, will provide technical and administrative support to the TCC and streamline the process of issuing tax credit certificates. The TSC, which is composed of a head and three members, has been directed to immediately conduct an inventory of all documents and papers bearing on tax credit certificate processing, issuance, application, and related transactions.

TCCs are documents issued by BOC, or jointly with DOF, concerning the refund of the taxes paid by companies in cases of excess duties, cancelled importation, or due to VAT input or output tax.

BOC earlier said the TSC was revived to facilitate the release of tax credit certificates. Lapeña also ordered the public awarding of tax credit certificates to the rightful owners during BOC flag ceremonies to dispel allegations that such credits are being used as grease money.

The custom chief in a Senate hearing on October 4 disclosed that tax credit certificates are negotiated to fund the “pasalubong” or welcome gifts to new customs commissioners.

Lapeña said he received a tip from a concerned employee that a certain percentage of TCCs goes to the welcome gift, “while some are being used as a bait to delay clearance of shipments and to compel big companies to give bribes.”

Lapeña said the processing of TCCs is usually put on hold and only done when a new customs commissioner takes office.

As of December 7, a total of P223.7 million worth of tax credit certificates including tax refunds have been awarded during the agency’s regular flag-raising ceremonies. –

source: https://www.portcalls.com/ph-customs-chief-revives-tax-credit-body-speed-release-tccs/

PH shipping, Trucking Rates to Rise with Fuel Excise Tax Hike

Mon, 18 Dec 2017 00:00:00 -0600

The Senate and House of Representatives on December 13 ratified the bicameral conference committee report on TRAIN, the first package under the government’s Comprehensive Tax Reform Program (CTRP).

The TRAIN bill will now be up for approval by President Rodrigo Duterte for implementation next year, as scheduled by the Department of Finance (DOF).

Included in the legislation is a staggered increase in diesel excise tax from zero to P2.50 in 2018 and P4.50 in 2019 to P6 per liter in 2020.

For gasoline, excise tax will increase from P4.35 to P7 in 2018, P9 in 2019, and then P10 per liter come 2020.

Bunker fuel, which is used by sea vessels, will see the same increase in excise tax as diesel, while aviation jet fuel will have an excise tax of P3.67 in 2018 and P4 for 2019 and 2020.

For the period 2018 to 2020, the scheduled increase in fuel excise tax shall be suspended when the average Dubai crude oil price based on Mean of Platts Singapore for three months prior to the scheduled increase of the month reaches or exceeds US$80 per barrel.

DOF will also perform an annual review of the implementation of the fuel excise tax.

The fuel excise tax is one of the government’s measures to offset the loss of revenue due to the lowering of personal income taxes, which is also part of the tax reform.

Philippine Inter-island Shipping Association (PISA) executive director Atty. Pedro Aguilar told PortCalls in a text message that fuel accounts for 40% to 50% of a ship’s operational costs. A 2015 calculation by PISA member organization Philippine Liner Shipping Association (PLSA), however, put this figure at a lower but still considerable rate of 30%.

Aguilar said stakeholders should expect increases in shipping rates since the approved excise tax on bunker fuel is “substantial”. He said service providers will not be able to absorb the increase and will eventually pass it on to their customers.

Aguilar earlier said any addition to the price of fuel will jack up operational costs for vessels, which use bunker fuel for their engine and diesel for gensets. Since the domestic shipping sector is deregulated, ship operators may impose a fuel surcharge or a freight hike to counter higher operating costs, he noted.

Philippine Chamber of Arrastre and Stevedoring Operators president Benjamin Cecilio, in a separate text message to PortCalls, agreed that the increase in fuel excise tax will mean additional operating costs for arrastre and cargo-handling operators since “operations use substantial amount of fuel to move their equipment.”

“If operating costs will become onerous for the handlers, there will consequently be a need to increase handling charges,” he added.

Cost drivers, including fuel costs, is one of the grounds cited by arrastre and cargo-handling operators when asking the Philippine Ports Authority (PPA) for a rate increase. Cecilio noted, however, that an immediate increase may not happen since PPA takes time to approve any proposed rate hike.

Trucking rates may also increase due to the approved higher excise tax on diesel, which is used by truckers. Inland Haulers and Truckers Association (INHTA) president Teodorico Gervacio, in a phone interview with PortCalls, said the additional cost will surely trigger an increase in trucking rates, the amount to depend on market forces.

INHTA also has an agreement with PLSA that allows for a P172 increase in rates for every P5 increase in fuel prices, Gervacio noted.

Confederation of Truckers Association of the Philippines (CTAP) chairman Ruperto Bayocot told PortCalls in a text message that the higher fuel excise tax will affect end-users the most because truckers “will just pass on (the additional cost) to our clients.”

Earlier, CTAP vice president for external affairs Pepito Dino noted that trucking accounts for 35% to 40% of overall costs of manufacturers and producers.

source: https://www.portcalls.com/ph-shipping-trucking-rates-rise-fuel-excise-tax-hike/

PH Oct exports up 6.6%, imports by 13.1

Mon, 18 Dec 2017 00:00:00 -0600

NEDA-attached agency Philippine Statistics Authority reported that the country’s total trade grew by 10.4% year-on-year in October 2017, a pickup from September’s 4.6% growth.

Exports recorded its 11^th consecutive month of positive growth at 6.6%, while imports posted a double-digit growth of 13.1%.

“We are encouraged by the performance of Philippine trade in recent months, especially with the consistent positive performance of exports. Cooperation and trade initiatives are integral to sustaining these gains,” Socioeconomic Planning Secretary Ernesto M. Pernia said in a statement.

Total merchandise trade grew by 11.2% for the first six months of 2017 compared to the first half of last year, NEDA noted.

“For 2018, we are looking at improved performances in exports of agricultural products and semiconductors, which continue to comprise a huge portion of Philippine exports,” the Cabinet official said.

This follows the expected rise in global prices of agricultural exports and World Semiconductor Trade Statistics’ expected 7% growth in global sales.

Pernia noted that these gains and positive outlook will be accompanied by initiatives such as ASEAN Seamless Trade Facilitation Indicators that could help in reducing trade transaction costs by 10% by 2020.

The ASEAN-Hong Kong, China Free Trade Agreement (AHKFTA) and ASEAN-HKC Investment Agreement (AHKIA) signed last month will also increase and facilitate trade in goods and services within the region, he said.

The AHKFTA broadens market access, promotes trade confidence, and strengthens cooperation while AHKIA covers protection, promotion, and facilitation of investment.

“Against this backdrop, Philippine exports will likely remain in the positive territory and should pick up due to higher demand during the holiday season,” Pernia said.

source: https://www.portcalls.com/ph-oct-exports-66-imports-131/

DOTr orders tighter security for Christmas Season

Mon, 18 Dec 2017 00:00:00 -0600

Maritime agencies under the Department of Transportation (DOTr) are set to activate this week contingency and security measures to ensure the safety and comfort of travelers during the Yuletide season.

Dubbed as “Oplan Biyaheng Ayos!: KAPASKUHAN 2017,” the maritime sector—composed of the Philippine Coast Guard (PCG), Philippine Ports Authority (PPA), and Maritime Industry Authority (Marina)—will strictly execute their respective contingency measures from December 20, 2017 to January 5, 2018. The activation of the operation complies with the directive of DOTr Secretary Arthur Tugade addressed to all agencies under his department.

Under the Oplan, maritime officials and personnel are directed to go on heightened alert status to ensure the safety and security of passengers, particularly those travelling by sea to spend the holidays in the provinces.

According to DOTr Undersecretary for Maritime Felipe Judan, maritime personnel are expected to implement several safety measures and contingency plans, such as activating the DOTr Passenger Assistance Counters; ensuring that all ships and other sea vessels are properly inspected; and undertaking thorough inspection of all passengers, bags, and cargoes prior to boarding.

Maritime personnel are also directed to report in real time and provide their superiors regular incident updates via SMS or e-mail.

Judan further said that they should send a consolidated written report on the occurrence/non-occurrence of incidents through e-mail to their superiors and immediate supervisors daily at 7 a.m.

Authorities are likewise required to send out necessary public advisories such as safety tips, documentation requirements, prohibited items, and safety regulations at seaports.

source: https://www.portcalls.com/dotr-orders-tighter-security-christmas-season/

Asia leading the charge in online grocery sales

Sun, 10 Dec 2017 00:00:00 -0600

Stéphane Roger, global shopper and retail director at Kantar Worldpanel, said: “The fourth annual Future of E-commerce in FMCG study shows that e-commerce now accounts for 4.6% of all FMCG sales. Whilst the e-commerce channel is growing, the FMCG market as a whole is sluggish, increasing just 1.3% during the same period. Our projections show that in 2025, online FMCG will be a USD 170 billion-dollar business and hold a 10% market share.”

In absolute value growth, the top six contributors are all leading power economies, led by China and the U.S. The other top-performing countries are South Korea, the UK, Japan, and France. Last year, value increased by 52% in China, 41% in South Korea, 8% in the UK, 7% in France, and 5% in Japan and in the U.S.

However, the online grocery sector is also expanding into new markets. There has been significant value growth, for example, in Thailand (+104%), Malaysia (+88%), and Vietnam (+69%) where e-commerce is in the early stages.

“A continent of tech-savvy consumers and avant-garde retailers like Alibaba has made Asia a natural home for e-commerce growth,” said the report.

For the past decade, Asia has led the way in online grocery adoption; and this rise shows no signs of slowing, the report continued. “As a continent, Asia achieved the biggest increase in e-commerce globally in 2017, with 44% growth. In terms of value, China continues to lead the charge, with more online purchases being made in the country than anywhere else in the world,” it added.

“Unsurprisingly, South Korea also remains a hotbed for e-commerce, with 41% growth. The digital economy is embedded in Chinese and South Korean cultures like nowhere else on Earth; particularly among the young urban middle classes.”

As of June 2017, there are 1.36 billion mobile phone subscriptions registered in China, making it one of the most connected nations on the planet. In South Korea, almost 100% of consumers aged between 10 and 40 years old shop online, especially through mobile. The Chinese and South Korean e-commerce channels are both driving growth through penetration, reaching more than 60% of their population.

Conversely, Europe and the USA have adopted a more hybrid approach, reacting to Amazon’s development in the grocery market by fusing traditional retail with online enterprise.

Europe remains divided. With 5.6% value share in 2016, it is the second largest market in the world for e-commerce following Asia. However, while the UK and France remain on the front foot for e-commerce—with 7.5% and 5.6% market share respectively—Germany (1.7%) and the Netherlands (2.6%) are lagging behind.

Known for its attachment to large format hypermarkets, online grocery penetration has increased rapidly in the U.S. in recent months, reaching 30% of the total population. Annual spending on food and alcohol through e-commerce is this year predicted to reach $20 billion.

There has been a slight increase in online grocery spend in Latin America over the past 12 months. The lack of trust in payment methods coupled with the overwhelming popularity of discount formats makes Latin America one of the most difficult regions for brands to succeed in the online world.

Megacities have become natural breeding grounds for e-commerce. For example, in London, Beijing, and Shanghai, e-commerce accounts for 10% of the FMCG market.

“We know that e-commerce is still cannibalising offline purchases. However, there is growing evidence that online formats—in isolation—are no longer the best option for winning share. It´s about how online and offline work together to create a better shopper experience,” said Roger.

Personal care and baby care products continue to dominate the online basket. Around the world, young and time-strapped families are increasingly seeking convenience when it comes to repeat purchases of everyday household essentials. In China, for example, consumers bought five times more in value of baby diapers than other FMCG products. In Asia, the top categories for online purchases are generally individual products such as personal and baby care products.

Looking ahead, Kantar Worldpanel projects that South Korea and China will continue to lead the way, and Asia in general will remain at the cutting edge of online adoption. The big global uplift will come from the USA, predicted to rise from a 1.5% e-commerce share in 2017 to 8% in 2025. This can be attributed to the successful rollout of click-and-collect, delivery and subscription models, and the acceleration of disruptive models.

source: https://www.portcalls.com/asia-leading-charge-online-grocery-salesreport/

Global economy strengthening but weaknesses persists.

Wed, 29 Nov 2017 00:00:00 -0600

The OECD projects that the global economy will grow by 3.6% this year, 3.7% in 2018, and 3.6% in 2019. The projections reflect slight improvements in the global economy since the previous Interim Economic Outlook in September 2017, but also shows concerns about long-term momentum.

Annual growth of the world economy is projected to improve slightly in 2018, but remains below the pre-crisis period and that of past recoveries. Longer-term challenges inhibit stronger, more inclusive, and more resilient economies, said the report.

The outlook noted persistent effects of prolonged sub-par growth on private sector performance including investment, trade and productivity.

“Employment rates are now above pre-crisis rates in many OECD economies and unemployment is falling, but this has yet to produce solid real wage gains. In the absence of a clear sign of change in underlying trends, growth across the OECD is projected to weaken in 2019,” it added.

“Growth has picked up momentum and the short-term outlook is positive, but there are still clear weaknesses and vulnerabilities,” said OECD Secretary-General Angel Gurria. “There is a need to focus structural and fiscal action on boosting long-term potential as monetary policy support is reduced. Countries should implement reform packages that catalyze the private sector to promote productivity, higher wages and more inclusive growth.”

In the United States, growth is estimated at 2.2% in 2017, rising to 2.5% in 2018, then dropping back to 2.1% in 2019.

The euro area is projected to grow at a 2.4% rate in 2017 and a 2.1% pace in 2018—upward revisions from previous projections driven by stronger growth in key European countries—before slowing to a 1.9% pace in 2019.

Growth in Japan is projected at 1.5% for 2017, which is slightly below the forecast in the September 2017 Interim Economic Outlook, and to remain close to 1% in 2018 and 2019 as fiscal consolidation resumes and the decline in the working-age population accelerates.

The Canadian economy is bouncing back to 3% growth rate this year, before slowing to 2.1% in 2018 and 1.9% in 2019 as policy stimulus is withdrawn.

Expansion in the major emerging market economies is improving, on the back of renewed infrastructure investment in China and recovery from recession in major commodity-exporting economies, but remains softer than in the past.

Growth in China is projected at 6.8% in 2017, 6.6% in 2018, and 6.4% in 2019, partly reflecting the ongoing rebalancing in China’s growth model.

In India, growth is projected at 6.7% in 2017 and 7.0% in 2018, before picking up to a 7.4% rate in 2019, thanks to reforms that are expected to boost investment, productivity and growth.

Russia is rebounding from recession, and is projected to grow by 1.9% in 2017 and 2018 and 1.5% in 2019. Brazil is also expected to exit recession, with a 0.7% growth rate in 2017, 1.9% in 2018 and 2.3 % in 2019.

“The global economy is flying low and at risk of financial turbulence,” said OECD chief economist Catherine Mann. “The only strategy is to pursue an integrated policy approach that will balance actions to boost growth, mitigate risks in the financial sector and improve resilience. We cannot afford to be complacent and assume that today’s economy is as good as it gets—future generations have a right to ask for better.”

source: https://www.portcalls.com/global-economy-strengthening-weaknesses-persistoecd/

20 PH Agencies to Interface with ASEAN Single Window by 2018

Tue, 28 Nov 2017 00:00:00 -0600

Finance Secretary Carlos Dominguez III, citing a report by Finance Undersecretary Gil Beltran, said the agencies will be able to link up with ASW through TradeNet, the government’s trade facilitation portal that will serve as the country’s National Single Window (NSW), a requisite to connect to ASW.

Beltran said the ASW gateway is a regional initiative which aims to speed up cargo clearances and promote economic integration by enabling the electronic exchange of border documents among the 10 ASEAN member economies.

TradeNet, which will allow traders of commodities to apply for their import and export permits online, has been installed and is being tested this month. Earlier, DOF said seven types of commonly traded commodities will be the first batch covered when TradeNet starts full operations by the end of the year. These are rice, sugar, used motor vehicles, chemicals (toluene), frozen meat, medicines, and cured tobacco.

Earlier, DOF said 16 agencies involved in processing the trade permits of the seven commodities were scheduled to connect to TradeNet before the rollout.

These include the Bureau of Animal Industry, National Tobacco Administration, Fair Trade and Enforcement Bureau, National Food Authority, Bureau of Plant Industry, Food and Drug Administration, National Meat Inspection Service, Bureau of Internal Revenue, and Bureau of Customs.

Other goods will be progressively placed on board TradeNet as other trade regulatory agencies get connected to the system. The online platform will eventually connect 66 agencies and 10 economic zones.

Beltran said the country’s decision to adopt TradeNet as the vehicle for the country’s participation in the ASW will facilitate trade, heighten transparency in customs procedures, and improve revenue collection.

Five ASEAN countries—Indonesia, Malaysia, Thailand, Singapore, and Vietnam—are already utilizing the ASW. Four of them, except for Thailand, will start exchanging Form D, the preferential certificate of origin under the ASEAN Trade in Goods Agreement, by January next year.

source: https://www.portcalls.com/20-ph-agencies-interface-asean-single-window-2018/

Intra-ASEAN Investments Reaches Record High In 2016

Sun, 19 Nov 2017 00:00:00 -0600

The record-high investment is thanks to increased financial strength and cash holdings, as well as a growing drive to internationalize operations by ASEAN companies, according to the ASEAN Investment Report 2017.

The paper added that intraregional investment in 2016 accounted for the first time for a quarter of all foreign direct investment (FDI) flows in the regional grouping, which includes Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

“The rise in intra-ASEAN investment in 2016 was driven by a two-thirds increase in investment in manufacturing, to US$8.3 billion, and a doubling of investment in finance, to US$5 billion,” the report said.

ASEAN countries also saw a surge in inflows in 2016 from a number of several major source countries, despite a general downward trend of FDI in developing economies.

FDI flows from the European Union, for example, rose by 46% to $30.5 billion, while those from China increased by 44% to $9.2 billion.

But these bright spots were overshadowed by a significant fall in FDI in two ASEAN countries, dragging down overall inflows in the region by 20% to $97.6 billion.

“Inflows to Indonesia and Singapore together declined by about $22 billion, which significantly depressed FDI in the region,” the report said.

“In particular, the intracompany loan component of FDI in Singapore fell to -$12.4 billion in 2016, which suggests significant repayments of intracompany loans by affiliates based in that Member State,” the report said, adding that the figure should be interpreted in the context of affiliates being able to generate profits and revenues to repay intragroup loan obligations.

In Indonesia, the report said, “FDI declined significantly, from $16.6 billion in 2015 to $3.6 billion in 2016, a change linked with divestment of assets in finance, a reduction of round-tripping investment by Indonesian companies and the tax amnesty programme introduced between July 2016 and March 2017.”

According to the report, another major blow to FDI flows in the region came in the form of a 25% drop in cross-border merger and acquisition sales in the region, which fell from $10.3 billion in 2015 to $7.7 billion in 2016.

The year’s ASEAN investment report continues the tradition of examining in detail investment trends from two selected ASEAN dialogue partners. The focus this time around is on the EU and India. The U.S., Russia, China, Japan, South Korea, New Zealand, Canada, and Australia are also dialogue partners, meaning they have a special status with the intergovernmental organization.

Accounting for more than 22% of all FDI flows in the region since 2000, the EU is the largest investor group in ASEAN, where two-thirds of the 100 largest European multinationals have subsidiaries.

Some 2,000 Indian companies have business operations in ASEAN, and in 2015 the region attracted about 22% of India’s global outward FDI stock, a proportion much larger than that of Japan, the U.S. and China.

“Indian FDI in ASEAN is dominated by services activities,” the report said, “primarily in finance and insurance, repair of motor vehicles and motorcycles, and real estate activities.”

The ASEAN Investment Report 2017 also includes a section on the more than 1,600 economic zones in the region—which range from free trade zones to IT parks to mega special economic zones—and their role in attracting FDI.</p

source: https://www.portcalls.com/intraasean-investment-reaches-record-high-2016/