COVID-19

Singapore: Additional Stimulus and Movement Restrictions (26, 28 Mar)

Singapore Deputy Prime Minister and Finance Minister Heng Swee Keat announced a S$48 billion Supplementary Budget in Parliament on 26 March, Thursday. In conjunction with the earlier stimulus, the Singapore government was poised to inject S$55 billion into the economy, making the stimulus the largest in the country’s history and the equivalent of 11% of the country’s gross domestic product (GDP). The package’s measures include S$20 billion to be set aside as loan capital and enhancements to financing schemes, along with targeted relief packages for industries such as aviation (S$350 million), tourism (S$90 million) and taxi and private hire car drivers (S$95 million). It would also be the second time in history when Singapore’s reserves would be used (up to S$17 billion), though Minister Heng said that he is prepared to propose further withdrawals should the situation worsen and warrant it.

 Sources: Channel NewsAsia, The Straits Times, The Straits Times

The Singapore government sent out a health advisory on 28 March, Saturday, advising the public to avoid non-essential trips to malls and to stay at home. The advisory said that the public should only visit malls for essential goods such as food, and to maintain social distancing of at least one metre from other shoppers. This was the latest in a series of advisories and measures to curb the spread of COVID-19. On 27 March, Friday, the Ministry of Education announced that students in primary, secondary and pre-tertiary institutions would have one day of home-based learning per week, though they emphasised that they would not be closing schools.

Sources: The Straits Times, Channel NewsAsia

Indonesia: Drafting “Lockdown Regulations” and a Third Stimulus (28 Mar)

Indonesian Coordinating Minister for Political, Legal and Security Affairs Mahfud M.D. said on 27 March, Friday, that the government is drafting regulations for a partial lockdown of the country (i.e. Movement restrictions and social distancing). This is a significant departure from the Indonesian government’s previous stance, as they had maintained that a lockdown was not an option as recently as 23 March, Monday. However, the phrasing of this policy has been sensitive. Indonesian President Joko Widodo “Jokowi” maintained that a full “national lockdown” would be “unsuitable for Indonesian society”, and also dismissed the notion of imposing a “lockdown” on Jakarta (Note: Jakarta has closed schools, workplaces, places of worship and other public centres for the past two weeks). Instead, Jokowi said that the government would impose stricter regulations on social distancing and “civil emergency policies”. He also said that regional government heads that they cannot enforce a regional quarantine (i.e. restrictions on inter-regional travel) without the consent of Jakarta.

 Sources: Jakarta Globe, Reuters, Bloomberg, The Jakarta Post

Businesses across different sectors in Indonesia have been hit hard by the COVID-19 outbreak, which has disrupted their cashflow and business operations. Tour agents, for example, reported 90% drops in sales as of 12 March, with potential losses reaching US$245 million in February. Hotel occupancy rates reportedly fell from a low season average of 50-60% to 30-40% or less, though data from PT Moka Teknologi Indonesia suggested that the food and beverage industry was hit the hardest by the pandemic. Exports have been affected as well, with palm oil exports to China, the EU, India and the United States falling in January.

Amid this economic distress, the government announced that it would issue a regulation in lieu of law (perppu) to boost state spending by US$24.6 billion. Of this sum, US$4.6 billion was reportedly allocated to healthcare spending, US$6.7 billion for social protection, US$4.3 billion for tax incentives and credit and US$9.1 billion for miscellaneous economy recovery programmes. This is the fourth stimulus package announced by the Indonesian government, with previous measures costing US$3.7 billion in total, and the perppu will also raise the legal limit for the budget deficit from 3% of GDP to over 5%. Separately, observers are expecting Bank Indonesia to implement another rate cut at their next meeting. The central bank already cut its rate twice this year to 4.5%.

Sources: The Jakarta Post, The Jakarta Post, The Jakarta Post, East Asia Forum, The Jakarta Post, The Jakarta Post

Malaysia: New Stimulus and Extension to the MCO (25, 27 Mar)

Malaysian Prime Minister Muhyiddin Yassin announced the revamped stimulus package for Malaysia on 27 March, Friday. At US$57.7 billion with the inclusion of the earlier US$4.8 billion stimulus package, it is the largest stimulus in Malaysia’s history, and amounts to about 17% of its GDP. Over half the total package is to be allocated to public welfare measures, while US$23.0 billion was to be used to offer a six-month moratorium on loan repayments for individuals and small businesses.

Sources: New Straits Times, SCMP, The Straits Times, Malay Mail

Muhyiddin had previously estimated that the country’s gross domestic product (GDP) would contract between 0.8-1.2% from January to February due to the outbreak, with tourism being the worst-hit sector. Finance Minister Tengku Zafrul Abdul Aziz, however, said that the stimulus could add 1.5 percentage points to Malaysia’s GDP growth in 2020.

Observers have been more circumspect. Certain sectors, such as hoteliers, have said that the stimulus is below expectations. A recent survey of SMEs found that only 33% had just enough cashflow for them to pull through in March under current conditions, while 37.8% could last through April. Furthermore, some economists have voiced concerns about Malaysia’s fiscal deficit, noting that the expanded stimulus could cause it to rise to as much as 6% of GDP.

Sources: New Straits Times, Free Malaysia Today, The Edge Markets MY, Malay Mail, Free Malaysia Today, New Straits Times

Malaysia announced on 25 March that it would extend its movement control order (MCO) by two weeks until 14 April to contain the spread of COVID-19. The country, which had been under the current MCO for a week at the point of the announcement, saw the closure of educational institutions and most workplaces, as well as limits on domestic travel. Initial reports suggested that only 60% of Malaysians complied with the order. However, subsequent warnings of fines and jail terms for offenders, as well as the dispatching of the army to help enforce the MCO, led the police to report that the proportion of compliance had increased to 90%.

Sources: The Star, Malay Mail, New Straits Times, The Straits Times

Myanmar: Bracing for New Cases and an Initial Stimulus (23 March – Ongoing)

The Myanmar government has urged the public to brace for a “big outbreak” of COVID-19, as the total number of cases climbed to 14 as of 30 March. This warning was largely spurred by the return of over 23,000 migrant workers from Thailand over the past fortnight, as they sought to evade the travel restrictions imposed by the Thai government. The Myanmar government announced on 29 March, Sunday that it would suspend entry visa issuance to all foreigners except for diplomats and other officials, though it has yet to impose nationwide movement restrictions. Township-level authorities in many parts of the country have reportedly issued administrative orders telling restaurants to only offer food-to-go, and urging people to stay at home.

Sources: The Star, The Irrawaddy, SCMP, The Straits Times

Separately, the Myanmar government announced an initial stimulus package worth that includes a US$70 million fund. With a focus on the garment and manufacturing, hotel and tourism sectors as well as small and medium enterprises (SMEs), the fund will provide low-interest loans for them. Relaxed deadlines for tax payments and tax exemptions will also be offered to Myanmar-owned businesses that have been hit by the global pandemic. Meanwhile, the Central Bank of Myanmar cut its key interest rate twice in the past fortnight to 8.5%.

Sources: The Irrawaddy, The Irrawaddy, Frontier Myanmar

Thailand: State of Emergency and New Stimulus Plans Announced (26, 30 Mar)

Thai Prime Minister Prayuth Chan-ocha declared a state of emergency in his country on 26 March, Thursday. Effective until 30 April, the decree gives the government powers to order curfews and travel bans, which now include a nationwide extension of Bangkok’s shutdown of entertainment facilities and shopping malls. The government also banned most foreign nationals from travelling to Thailand, including foreign workers from neighbouring nations. The government has said that it has no plans to impose a curfew at the moment, though it may choose to do so if current measures prove ineffective.

Sources: The Straits Times, Nikkei Asian Review, Khaosod English

The Bank of Thailand slashed its 2020 growth outlook for Thailand from 2.8% to negative 5.3% during a monetary policy committee meeting on 25 March, Wednesday. This would mark the first contraction of the Thai economy since the global financial crisis in 2009. The Bank chose to maintain its benchmark policy rate at 0.75% during the meeting, but more cuts are expected in the future. A few days later, Finance Minister Uttama Savanayana announced on 30 March, Monday, that a third stimulus package worth more than USS$15.3 billion is in the works. This would add on to the US$15.8 billion from the two previous packages, and collectively amount to more than 6.1% of the Thai economy.

Sources: The Jakarta Post, The Business Times, Bangkok Post

Vietnam: Nationwide Isolation Period Ordered (31 Mar)

Vietnam announced a period of nationwide isolation measures on Tuesday, 31 March, limiting the movement of its 100 million residents beyond food and medical needs. The directive from Prime Minister Nguyen Xuan Phuc, which lasts for 15 days from Wednesday, 1 April, also mandated that non-essential businesses be shut down and that residents maintain social distancing of at least two metres between each other. It includes a ban on public gatherings of more than two people. It was seen as a response to an emerging cluster of cases from the Bach Mai Hospital in Hanoi, one of the country’s biggest hospitals which tended to more than 10,000 patients over the past three weeks.

Sources: Reuters, Voice of America, The Straits Times