ASEAN Market Watch: Malaysia Export Growth, Indonesia-Saudi Arabia Relations, and Philippines AML Compliance

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Malaysia: Exports in January register strong growth

Malaysia’s exports in January accelerated from the previous month due to high shipments and strong demand from China. Exports rose 13.6 percent with a value of US$15.76 million from a year earlier, according to the Department of Statistics. Analysts say that global trade is also strengthening, with demand for manufactured products from China, Singapore, Indonesia, Thailand, and South Korea. Electrical and electronic goods, which account for more than one third of Malaysia’s exports, increased 11.4 percent from a year earlier, while palm oil and palm based products climbed 23 percent.

Exports to China, Malaysia’s largest trading partner, increased to 31.6 percent year-on-year in January, followed by 18.8 percent to Singapore. Analysts believe that demand for electronics will lessen in the second half of the year, slowing the country’s growth. However, the country’s central, Bank Negara Malaysia, stated that it expects stronger exports and steady domestic demand to keep up with economic growth.

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Indonesia and Saudi Arabia sign cooperation agreements

The governments of Indonesia and Saudi Arabia signed 11 cooperation agreements, ranging from trade to aviation. Officials have said that Indonesia wants to step up trade cooperation with Saudi Arabia through either a preferential trading area (PTA) or a comprehensive economic partnership agreement (CEPA). Indonesia also wants Saudi Arabia’s backing to do a joint feasibility study in the framework of Indonesia-GCC cooperation.

Indonesia’s trade with Saudi Arabia totaled US$4.06 billion in 2016. The latter is Indonesia’s largest export destination in the Middle East, equaling US$1.33 billion; Indonesia’s imports from Saudi Arabia stood at US$2.73 billion. The agreements come during Saudi King Salman bin Abdulaziz al Saud’s visit to Indonesia, the first visit to Indonesia by a Saudi monarch in 47 years.

Philippines: No blacklisting despite perceived deficiency in AML/CFT compliance

The Philippines was saved from a possible blacklisting by the Financial Action Task Force (FATF), a global body that monitors compliance with anti-money laundering (AML) and countering financing of terrorism (CFT) measures, despite being the site for a cyber-heist a year ago. The Philippines was not included in a list of “jurisdictions with strategic deficiencies but have developed action plans” during an ongoing review of compliance with AML/CFT. The list was released on February 24.

Previously, he Philippines was included in a grey list in 2010 after the government failed to address deficiencies in its action plan. It was subsequently upgraded from the grey list in June 2012 after positive initiatives by the government to be more transparent. In June 2013, the country was removed from the FATF’s ongoing AML/CFT process.

The government passed the Republic Act 10167 and 10168, which criminalizes terrorist financing and added new crimes to the Anti-Money Laundering Act (AMLA); however the ruling left out casinos among those organizations required to report to the Anti-Money Laundering Council (AMLC). Philippines’ central Bangko Sentral ng Pilipinas (BSP) has been attempting to amend the AMLA to include casinos, money services business, precious stones dealers, jewels and metals, and real estate developers, among others, in the list of monitored institutions.

 


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