PH needs to boost Asean ties to sustain growth

Singapore—Amid concerns on rising protectionism, it is imperative for the Association of Southeast Asian Nations (Asean) to focus on “building bridges” and deepening trade integration in order to boost the resilience of the 10-member economic bloc, the chief of regional investment powerhouse Maybank Kim Eng Group said.

In a press briefing yesterday during the group’s “Invest Asean” forum, Maybank Kim Eng chief executive Dato John Chong said the Southeast Asian region was being supported by an underlying narrative of strong infrastructure spending—estimated to total $600 billion from 2016 to 2020—alongside a 630 million population mostly comprising of young people.

This year, Maybank Kim Eng expected the six core Asean markets (Asean-6)—Malaysia, Singapore, Indonesia, Thailand, Philippines and Vietnam—to grow by 4.8 percent, picking up from 4.6 percent last year. Chong said the momentum would be driven by trade recovery, rebound in commodity prices and improving global electronics demand. Next year, Asean-6 is seen to sustain a growth of 5.3 percent.

In the case of the Philippines, Maybank Kim Eng expects gross domestic product (GDP) growth to remain strong at 6.4 percent this year and 6.5 percent in 2018 after expanding by 6.8 percent last year, which included an extraordinary boost from the presidential elections.

Within Asean-6, the Philippines is seen to post the fastest pace of growth this year and next, followed by Vietnam, which Maybank Kim Eng expects to grow by 6.3 percent this year and 6.2 percent in 2018.

Chong noted that Asean had a strong balance sheet and less dependent on the US, with exports to China having surpassed exports to the US since 2009. “Unfortunately, where we can do better is intraregional trade. It’s still at 24 percent (of the region’s total trade). That means we trade more with non-Asean partners than we do with ourselves,” Chong said, noting that this number had remained relatively unchanged since 2007.

Chong said building bridges and deepening integration won’t just be the burden of the governments.

“It also has to be about the private sector and corporates as well. We need to step up to be Asean multinationals. In effect, we need to be doing business not just in our own country but also in other countries within Asean,” he said.

Over the years, Chong said more and more corporations from Malaysia, Singapore, Thailand and the Philippines were now expanding their regional footprint.