Author: Nurafida Ibrahim

As one of the most competitive economies in the world, Singapore continues to build on its strong financial system, market efficiency and macroeconomic stability. The city-state has been ranked fourth out of 64 economies in the 2023 World Competitiveness Ranking by the International Institute for Management Development (IMD), based on economic performance, government and business efficiency, as well as infrastructure. Although it slipped a rank from the previous year, Singapore remains the most competitive economy in Asia, ahead of Taiwan and Hong Kong.

In the wake of a rapid economic rebound from the pandemic in 2022, Singapore’s economy registered a 0.4% year-on-year growth in the first quarter of 2023. This growth, albeit moderating from the previous quarter’s 2.1% expansion, signifies the nation’s resilience. In the second quarter of 2023, the economy expanded by 0.5% year-on-year, mainly supported by the transportation and storage, other services, and information and communications sectors, according to the Ministry of Trade and Industry (MTI).

Like many economies, Singapore is not immune to the challenges posed by the slowing global economy and geopolitical tensions, coupled with tightening financial conditions. The MTI anticipates the nation’s GDP for 2023 to fall within the range of 0.5% to 1.5% as external demand remains subdued.

Despite this muted growth forecast, bright spots remain as some sectors are showing signs of recovery. The growth outlook for aviation- and tourism-related sectors such as air transport and accommodation remains positive, given the ongoing recovery in international air travel and inbound tourism. Consumer-facing sectors such as retail trade and food and beverage services are also expected to continue to expand, bolstered by resilient labor market conditions and the resurgence of inbound tourism.

Global Expansion Through Singapore

As a leading trade center, Singapore consistently attracts foreign investment due to its global connectivity, pro-business environment, exceptional infrastructure and a highly skilled workforce. Singapore stands out as the preferred destination for multinational corporations seeking to put down roots in the region.

Among them is SHEIN, the global fashion and lifestyle juggernaut with 11,000 employees based in key centers around the world including Singapore, the U.S. and Ireland. SHEIN’s global expansion is being led out of Singapore due to its strong governance and access to key markets in the region, among others. “SHEIN’s decision to be headquartered in Singapore is a testament to our belief in its vibrant ecosystem and alignment with our global vision,” says Leonard Lin, SHEIN’s Global Head of Public Affairs and Singapore General Manager. “Our commitment to Singapore goes beyond our business operations, and is also reflected in our continuous efforts toward engaging with the community, nurturing local talent, and fostering a sustainable fashion ecosystem right here in the heart of Asia.”

A Vibrant Fintech Landscape  

Meanwhile, Singapore’s fintech sector has expanded significantly, backed by a strong regulatory environment and digital infrastructure. The Monetary Authority of Singapore has recently announced a fresh round of funding over the next three years to boost the sector. The S$150-million (US$111 million) funding program aims to accelerate fintech innovation, particularly in areas such as artificial intelligence, data analytics and regulatory technology (regtech). 

The thriving fintech sector, showcased through events such as the annual Singapore Fintech Festival, cements the city’s role as a prime hub for fintech innovation. The diverse range of fintech entities, coupled with abundant venture capital investment opportunities spanning various funding stages, further solidifies Singapore’s position as the preferred destination for foreign fintechs seeking ASEAN market expansion and global recognition.

Take for instance, Surfin Meta, a Singapore-based fintech founded in 2017 with a mission to drive financial inclusion in emerging markets. The company selected Singapore as its base to better serve the markets in the region. It made a notable entry into Indonesia in 2018 with an online personal loan platform, and rapidly expanded its operations to Vietnam, Mexico and the Philippines in the same year. Today, Surfin Meta operates in 10 markets, serving 35 million unbanked and underserved users.

Wealth Management Excellence

The growth in global wealth in recent decades has contributed to the rise of family offices around the world. Many wealthy families are turning to professionally run family offices to help them manage their wealth and secure their legacies. As a global financial hub, Singapore has benefited from this trend, with some 1,100 single-family offices established in the country at the end of 2022.

Bank of Singapore, the private banking subsidiary of OCBC, has emerged as a major player in the family office segment in Singapore, managing more than a quarter of the 700 single-family offices established in Singapore at the end of 2021.

“Singapore’s status as an international financial center is key to its allure. With excellent global connectivity, a deep pool of skilled professionals in wealth management and a supportive tax environment, it serves as the ideal gateway to regional investment opportunities,” says Robin Heng, Bank of Singapore’s Global Market Head for Philippines, Australia, Indonesia, Thailand and Indochina.

The bank has a dedicated Family Office Advisory team that focuses on understanding clients’ needs and tailoring plans accordingly. As demand continues to grow for family offices in Asia, Bank of Singapore aims to enhance its offerings and expand its footprint in the wealth management space.

Prospects in Real Estate

Singapore’s growing number of high net worth individuals (HNWIs) has spurred activity in the real estate sector. Strata-titled offices and conservation shophouses stand out as attractive investments for HNWIs and family offices.

Homegrown boutique agency Brilliance Capital has emerged as a strong player in this segment, offering tailored real estate investment services for wealthy families, institutional investors and publicly listed companies from around the region. The firm, led by Executive Director Sammi Lim, has chalked up an impressive list of transactions since its inception three years ago, including the sale of a suburban mall for S$220 million (US$162.3 million), among others. 

Despite the prevailing market uncertainties, Lim believes that Singapore’s strong fundamentals and resilience will position it favorably against its regional peers. She anticipates that well-funded institutions, family offices and HNWIs with longer-term investment horizons will remain active in the market.

Looking ahead, Singapore’s journey as a competitive economic powerhouse continues to unfold. Despite global challenges, the nation’s commitment to innovation, diversification and adaptability fuels optimism for sustained growth.

Japan is ushering in a “new form of capitalism” to reinvigorate its economy after more than two years of closed borders due to the pandemic. Japanese Prime Minister Fumio Kishida’s new economic policy, unveiled last June, aims to achieve a “virtuous cycle of growth and distribution” through public-private partnership. As part of the policy guidelines, the government aims to pave the way for wage growth to offset the impact of inflation and boost investment in technology, startups, human capital and decarbonization.

On the back of these ambitious plans, the government revised its economic growth forecast for fiscal 2023 to 1.5%, up from the previous forecast of 1.1%. The overall GDP is projected to reach 558 trillion yen (US$4.31 trillion) this year, exceeding the pre-pandemic record of 554 trillion yen (US$4.28 trillion) in 2018. Companies are projected to increase investments by 5.0%, with exports and imports set to rise by 2.4% and 2.5% respectively, despite concerns of a global recession. 

Focus on Long-Term Growth and Innovation

Central to Kishida’s economic strategy is incentivizing long-term growth and strengthening Japan’s capacity for innovation, particularly in industries such as biotech, smart cities, artificial intelligence (AI) and space technology. As part of this push to champion innovation, the government is also taking steps to cultivate a world-class startup ecosystem and help local startups succeed on the international stage.

Indeed, Japan has always been a leader in innovation and technology. Japanese companies continue to create maximum value at home while making their mark on the global stage.

Take THK, for example. The global automation giant has set the standard for innovation in factory automation technologies and processes since 1971. Today, the company is leading the way with solutions bolstered by AI and IoT applications, and more than 60% of its sales come from overseas markets.

THK’s latest digital offerings include a customer communication platform that adds value to the purchasing process and an IoT platform that can predict faults in components and automatically minimize malfunctions without human intervention.

Meanwhile, soy sauce manufacturer Kikkoman has penetrated more than 100 countries since its establishment in 1917. Kikkoman Corporation Chairman and Honorary CEO Yuzaburo Mogi attributed the company’s long-term growth and success to the foresight of its top management. He says, “Now, more than ever, it is critical for top management to have a clear grasp of the global business environment and an ability to see ahead.”

Kikkoman aims to keep expanding in Asia, South America and eventually Africa in the next decade. 

Global expansion is also on the agenda of Japanese advertising firm ADREX, founded in 2018. The company’s client-first philosophy, coupled with its business transparency, has contributed to its success. While many young enterprises are focused on immediate profits, ADREX believes in investing in long-term growth. The company celebrated a couple of milestones last year: the launch of its first in-house data analytics tool and the setup of its first overseas base in New York City.

With the domestic economy finally reopening—alongside government support—Japanese businesses are poised for further growth in the year ahead. 

Malls, hotels, restaurants, and construction sites light up with renewed activity in the Makati Central Business District.

Prior to the emergence of Covid-19, the Philippines was already one of Asia’s fastest-growing economies. Now, with post-pandemic recovery well underway, and the tempering of global concerns ranging from fuel to supply chain issues, the outlook for the country’s economy is bright as it looks to regain its momentum and rise to even greater heights.

Positive developments have followed the relaxation of Covid-19 restrictions, thanks to an expanded vaccination program and adherence to health precautions. This has led to a rebound in investments and household consumption.

“Strong retail growth is a bright spot in the Philippines and in the region,” says Frederic C. DyBuncio, President and CEO of SM Investments Corporation. “Despite rising inflation, SM Retail reported its revenues rising by 18% in the first half of 2022.” 

The pandemic has also spurred the adoption of digital and online transactions in the country, leading to a fintech boom. “Digital innovations have made doing business in the Philippines easier, creating a springboard for economic recovery,” explains Nestor V. Tan, President and CEO of BDO Unibank, the Philippines’ largest bank.

Speaking on the property sector, Vista Land & Lifescapes President and CEO Manuel Paolo A. Villar Jr. shared in their H1 2022 earnings report about how the company saw their income grow by 11% from last year, and will continue to upgrade and develop digital initiatives. Having recently launched VistaREIT, their company’s commercial real estate investment trust, Villar remains optimistic about the prospects of a reinvigorated economy.

Official figures show the Philippines’ GDP posted 8.3% growth in the first quarter of 2022, slowing to 7.4% in Q2 due to inflationary pressures. The government expects full-year growth to be between 6.5-7.5%, still among the highest in the region.

With growth accelerating and financial burdens easing, the new administration is confident about the country achieving upper-middle-income status within the next six years.

In its first few months, the Marcos government has highlighted its continued focus on fiscal management and reviving the underutilized agricultural sector. The current team has stated its commitment to not just sustain, but to also expand the previous administration’s ambitious Build Build Build program, keeping infrastructure spending at 5-6% of GDP. By targeting other promising sectors, such as technology, healthcare and education, the goal is to raise the country’s attractiveness as an investment destination.

The latest official statistics show all economic sectors expanding, with growth mostly driven by the services and industry sectors at 9.1% and 6.3%, respectively. Business process outsourcing remained buoyant even during the pandemic and is expected to continue to play a significant role. However, tourism is the sector predicted to rebound most dramatically over the next two years.

Having weathered great storms, both literal and figurative, the Philippines is showing that, with a bit of wind at its back, its economy is ready to again fly forward and upward.

After navigating the turbulence of the past two years, Singapore has set its sights firmly on the future as it seeks to capitalize on the post-pandemic rebound. The government has removed almost all Covid-related restrictions and has since embarked on a strategy to sustain Singapore’s longer-term relevance while supporting businesses as they return to a growth trajectory.

Like other countries around the world, however, Singapore faces challenges on multiple fronts, including heightened inflation that threatens to push economies into recession. Rising food and energy prices worldwide are a result of persistent supply chain issues that have been exacerbated partly by China’s zero-Covid approach and the supply shock from the war in Ukraine.

However, economists are cautiously optimistic that Singapore will avoid a technical recession, which is defined by two consecutive quarters of economic contraction. After the GDP dipped slightly by 0.2% for Q2, 2022, the Ministry of Trade and Industry said that the economy appears set to return to quarter-on-quarter growth for the rest of the year.

Reaping the Benefits of Transformation

Despite the uncertain global landscape, companies based in Singapore will continue to reap the benefits of digital and business model transformation efforts undertaken in recent years. Initiatives aimed at streamlining processes, embracing digitalization and finding new avenues for growth have resulted in more sustainable businesses that are better equipped to navigate volatility and capture new opportunities.

For instance, Singapore-based pharmaceuticals group Zuellig Pharma consistently taps into innovation and technology to more effectively serve its stakeholders as part of its broader mission to make healthcare more accessible to the communities it serves.

In the education sector, Singapore Institute of Management (SIM) has also embraced innovation to help its learners acquire skills and knowledge that are relevant for the rapidly evolving future of work. In July this year, SIM rolled out a rebranded identity to reflect this commitment to an industry-focused and skills-based approach to lifelong learning.

Meanwhile, one of Singapore’s leading entrepreneurs, Sam Goi of Tee Yih Jia Food Manufacturing is leveraging a new, state-of-the-art manufacturing facility to emerge stronger from the pandemic, as he seeks to play a key role in Singapore’s bid for nutritional self-sufficiency. 

Riding the Post-pandemic Rebound

The global hospitality industry is also witnessing a welcome recovery as global travel bounces back strongly, with some Singapore-based players having returned to pre-pandemic levels of activity. 

A case in point is Radisson Hotel Group (RHG), which recently unveiled an Asia Pacific (APAC) Expansion Plan that aims to grow its portfolio from around 400 properties in the region to more than 2,000 hotels and resorts by 2025. The expansion plan focuses on five strategic growth markets—India, Thailand, Vietnam, Australia and New Zealand—and RHG’s strategy will be powered by building local development and operations teams with local language capabilities in these markets.

The healthcare sector is another beneficiary of the post-pandemic rebound. IHH Healthcare—which operates 80 hospitals in ten countries under leading brands such as Fortis, Parkway and Pantai—saw its business plummet by almost 80% during the crisis, pushing the company into a loss for the first time in many years.

Through the uncertainty, IHH, which is listed in Malaysia and Singapore, stayed true to its mission to become the world’s most trusted healthcare services provider. The group’s decision to follow its moral compass has since paid dividends, and it has come out of the pandemic stronger than ever.

Committed to Sustainability

Many of these companies are focused on incorporating sustainability into their operations, even as they chase business expansion. IHH recently introduced its “Care. For Good.” vision, which aims to create sustainable value for all its stakeholders. This involves not only taking care of patients, but also its people, the public and the planet.

Meanwhile, Zuellig Pharma has put in place a sustainability framework that outlines 22 material issues grouped under four themes: Setting the Highest Standards of Integrity, Nurturing Talent, Improving Health Outcomes, and Respecting the Environment. RHG has also developed an APAC Expansion Plan in line with the group’s sustainability targets, reinforcing its commitment to become net zero by 2050.

Other organizations are more directly engaged in promoting sustainability in an effort to address climate change. One such enterprise is Plastic Credit Exchange (PCX), a commercial operation based in Singapore that launched the world’s first non-profit, fully integrated and blockchain-protected plastic offset program. PCX offers brands a way to achieve their sustainability goals by showing them that there is an effective, achievable way to clean up their plastic waste.  

The Singapore Edge

Looking ahead, companies and entrepreneurs from around the world will undoubtedly continue to set up shop in Singapore, attracted by the city-state’s well-known strengths of global connectivity, ease of doing business and good governance. Drawn by these strengths, Sudhir Agarwal came to Singapore in 2016 to build a global business process outsourcing enterprise from scratch. In just six years, his company, Everise, has grown into an industry powerhouse that is expected to register around half a billion U.S. dollars in revenue this year.

Agarwal credits operating out of Singapore as one factor that has given him a competitive edge in the industry. “I chose Singapore because of the ease of setting up the company and doing business here. I was clear that Everise would be built on the important pillar of governance, which we all know is very strong in Singapore.”