Building Cutting Edge Wealth Management Solutions

Amid ongoing geopolitical tensions and market volatility, Asia’s wealth management sector continues to leverage on the region’s growing ranks of ultra-rich. Despite the headwinds brought on by the Covid-19 pandemic in the past two years, the Asia-Pacific will see the biggest growth in the number of ultra-high net worth (UHNW) and high net worth individuals between 2021 and 2026, according to the 2022 edition of Knight Frank’s The Wealth Report.

Over the next five years, Knight Frank forecasts that the global UHNW population will grow by a further 28%, led by Asia and Australasia (+33%), followed by North America (+28%) and Latin America (+26%).

The new generation of wealthy individuals will have different demands compared to their parents when it comes to managing money. For instance, many will likely communicate with their wealth managers through digital platforms, which will facilitate remote transactions seamlessly at their own convenience. At the same time, environmental, social and governance (ESG) concerns will also be a key priority in the portfolios of the younger generation seeking to make the world a better place.

To this end, financial institutions such as HSBC and Citigroup are showing their ultra-rich clients unambiguous commitments to achieve their sustainability ambitions. Both banks are targeting to achieve net zero emissions by 2030 for their operations, while helping corporate clients across various industries to transition to a low carbon economy.

As part of a global group with corporate, investment and retail banking capabilities across an international network, HSBC’s Global Private Bank has a wealth of knowledge and expertise at its disposal to support its clients’ sustainability journey.

For Citi Private Bank (CPB) and its clients, committing to sustainable investments is a perpetual priority. In the coming years, CPB will bring their best thinking, research, analytics and fresh actionable investment ideas to help clients meet both their financial and sustainability objectives.

Besides sustainability, wealth and family governance planning has become more important due to the unprecedented intergenerational transfer of wealth expected to happen across Asia in the next few years. Institutions such as Liechtenstein-based LGT could help many of the region’s successful businesses prepare to pass on the reins to their second and third generation members amid an uncertain economic environment.

Founded over 100 years ago, LGT has established an enviable track record for helping clients with their family governance planning by putting in place governance frameworks built around common values, business goals and investment principles. The bank was founded by the Princely House of Liechtenstein, a 900-year-old business-owning family that has passed on their values and wealth across 26 generations.

As the wealth landscape evolves at a rapid pace, private banks that embrace innovation, sustainability and the evolving needs of their clients will continue to be at the leading edge of wealth management for decades to come.

Asia-Pacific’s Luxury Property Sector Set To Soar

Pent-up demand is expected to convert into supercharged activity throughout the Asia-Pacific real estate market this year, with the luxury end of the sector set to do especially well. While a general uptick is anticipated, industry sources have identified a number of individual country markets that are likely to particularly benefit from this improved sentiment.

In the case of Singapore, according to the latest Asia-Pacific Market Snapshot by global real estate brokerage Colliers, demand for bigger and better-quality spaces is expected to be particularly robust, with homeowners willing to pay a premium to secure such properties. The market is expected to be further bolstered by a growing influx of high-liquidity overseas buyers. Throughout the region, it is also expected that greener, more environmentally friendly spaces will be at a premium.

One development that is keen to burnish its green credentials is the Marina One Residences, one of Singapore’s most sought-after upscale living complexes. With its award-winning blend of luxury, spectacle, convenience and unmatched natural harmony, the Residences continue to be the preferred choice for both high-end family living and as a high-return real estate investment opportunity.

Of late, working from home and changed consumer preferences have seen the development’s three- and four-bedroom apartments emerge as its most in-demand spaces, while its penthouses also continue to attract particular attention. Its status as one of the city’s most award-winning green buildings has also proven a huge draw.

Over in the Philippines, according to Colliers, the completion of a number of major infrastructure projects is likely to spur demand. Inevitably, this will hugely reassure investors throughout the sector, while also acting to buoy rental values and reduce vacancy rates.

Benefitting from this renewed market confidence is the portfolio of new properties on offer from Ayala Land, one of the Philippines’ largest developers. Having built its reputation through the provision of superior sustainable developments, this year the company is focusing on a raft of new projects set far from the Metro Manila area.

Among its current flagship projects is Solinea, which offers city resort-style living at the heart of Cebu Business Park. Those in the know are also eyeing The Residences at Azuela Cove, a luxurious planned space enjoying panoramic views out over the Davao Gulf.

With its GDP expected to surge over the coming years, the Philippines is also set for a boom on the luxury residential front. Spearheading this is a canny example of brand extension on the part of Grand Hyatt, which has seen the 50-story Grand Hyatt Manila Residences (GHMR) South Residences acclaimed for its eclectic mix of upscale lifestyle, dining and shopping options, not to mention its 188 designer residential suites.

Set adjacent to the landmark Grand Hyatt Manila and developed by Federal Land, GHMR maintains the level of premium living the five-star hotel is renowned for, while allowing its affluent residents to enjoy it in an ongoing, uninterrupted fashion.

These and other landmark projects signal an exciting year ahead for the Asia-Pacific real estate sector.

Japan’s Economy To Gain Traction In 2022

Like most countries, Japan struggled to find its economic footing in 2021, as it continued to deal with pandemic-related restrictions and prevailing supply chain disruptions around the world.

Despite the challenges brought on by the Covid-19 pandemic, the world’s third-biggest economy is poised to recover, supported by the 56 trillion yen (US$493 billion) economic stimulus unveiled by newly-elected Japa­nese Prime Minister Fumio Kishida in Novem­ber. The package will offer cash handouts to families with children under 18, support small businesses and implement measures to off­set rising fuel prices. The country’s largest spending reflects the government’s resolve to boost growth and redistribute wealth to households.

“Growth is on course to regain momen­tum, supported by macroeconomic policies and progress in vaccination,” the Organisa­tion of Economic Cooperation and Develop­ment said in a report in December. “Signifi­cant progress in vaccination and falling rates of infection are now supporting the resump­tion of stronger consumption growth and lifting investment, as supply chain disrup­tions are resolved. A new economic policy package will boost activity.”

While the Japanese economy is expected to accelerate its expansion in fiscal 2022 to 3.4%, corporate leaders must remain vigi­lant amid the lingering impact of Covid-19. The nation’s corporate CEOs will have to remain steadfast and be prepared for the unexpected, Yuzaburo Mogi, Chairman and Honorary CEO of Kikkoman Corporation, says. CEOs need to be forward-looking and be able to anticipate what lies ahead and act decisively, he adds.

Guided by this philosophy, Mogi has spearheaded Kikkoman’s overseas expan­sion since the 1970s. Today, the company’s main soy sauce product is enjoyed in over 100 countries, with around 75% of the group’s profits coming from its international business.

As supply chains normalize, Japanese firms are also looking to tap the growing demand for electronics devices and components. One company that’s emerging stronger from the pandemic-induced slump is THK Co., Ltd.—a supplier of industrial machinery, robotics and automation solutions.

THK is benefitting from robust electronics demand driven by advances in automation and robotics, and a boom in the automo­tive industry as the switch towards electric vehicles gains pace. The firm aims to leverage digital technologies, such as artificial intelligence, Internet of Things and robotics, to boost the efficiency of its manufacturing processes over the next three years.

The strong rebound in the electronics and automotive sectors also bodes well for Alps Alpine Co., a Japanese manufacturer of sen­sors, touchpads and switches. With a mission to “perfect the art of electronics,” the group’s global network of 100 companies supply components and devices to the automotive, infotainment, and related logistics services industries.

Japan’s economic resurgence in the com­ing years will be underpinned by its inherent strengths and the resilience and innovation of its dynamic companies. The long-term outlook for the Land of the Rising Sun is look­ing brighter than ever.

Indonesia: Emerging Stronger

Investors are keen to ride on Indonesia’s rebound.

As Indonesia emerges from the pandemic, businesses and investors are looking to ride on the country’s rebound from an unprecedented crisis. According to the Asian Development Bank (ADB) in a report released late September, the Indonesian economy is expected to grow by 3.5% in 2021, and by 4.8% in 2022, underpinned by robust exports and government spending. Supportive fiscal policy and accommodative monetary policy will also help boost growth.

Meanwhile, private consumption is projected to recover modestly before rising by 5% next year, ADB said. Investment should also strengthen in 2022 as conditions stabilize and the business climate improves.

Indonesia’s economy had a relatively mild downturn in 2020, thanks to the government’s bold, timely policies to provide fiscal stimulus and social assistance to the vulnerable to prevent long-term economic scarring. It continued to recover in the first half of 2021 due to those same policies and strong exports,” said Jiro Tominaga, ADB Country Director for Indonesia.

Keen Investor Interest

The confidence in Southeast Asia’s largest economy is reflected in rising investment in the country’s dynamic tech sector. Indonesia’s digital economy is projected to grow by almost 50% this year on the back of rapid development in the e-commerce segment, a trend that is expected to continue until at least 2025 according to the “e-Conomy SEA 2021” report by Google, Temasek and Bain & Company. The report estimates that Indonesia’s internet economy—measured in gross merchandise value—will grow to US$70 billion this year, up 49% from US$47 billion last year.

Venture capital (VC) firm Alpha JWC Ventures has capitalized on keen investor interest in tech start-ups to continue its winning streak in Indonesia over the past year. With three Indonesia-based unicorns already in its portfolio, the firm’s portfolio of companies managed to raise over a billion dollars so far in 2021 amid the pandemic.

Going forward, Alpha JWC Ventures plans to double down on Indonesia’s tech sector. With the recent close of its latest, and largest fund, the firm will be able to increase its investment ticket size significantly, and partner with its portfolio companies for longer periods. The VC’s Indonesia-focused investment approach has been validated by global organizations such as the World Bank’s International Finance Corporation and Morgan Stanley Alternative Investment Partners, who have invested in the latest fund.

Domestic Leaders Continue to Dominate

Meanwhile, Indonesian companies in more traditional sectors have also prospered during this challenging time. As the largest and most successful bread company in Indonesia, PT Nippon Indosari Corpindo Tbk continued its domestic dominance, commanding a 90% share of the country’s mass-produced bread market.

Indonesian SMEs are leveraging digitalization to find new avenues of growth.

The company’s strategy to focus on developing Indonesia’s bread market has yielded positive results, and the company’s quarterly sales are already returning to pre-pandemic levels, boosted by wider distribution coverage and higher penetration. Profitability margins are also set to expand, underpinned by improved productivity and efficient cost management.

PT Arwana Citramulia Tbk, Indonesia’s ceramic tile industry leader, is another case in point. The company’s early decision to spread out its manufacturing to five locations around the country has kept costs low and its operations efficient, helping it to navigate the turbulence and maintain its leadership position. The company is also expanding into new market segments. Its latest plant, for instance, was set up to produce a new product, glazed porcelain tiles, called ARNA.

Transforming to Fuel Growth

Other companies have also pivoted their businesses to adjust to changing customer and market needs. Indonesian conglomerate Emtek Group, for instance, has managed to stay ahead of the competition by transforming from a conventional free-to-air television broadcaster into a multi-channel, multi-platform digital media company.

Today, the group owns three free-to-air television stations, one direct-to-home satellite television operator, a leading over-the-top streaming platform, an ecosystem of digital publishers, and a series of content and production companies, among other assets.

While Emtek has helped Indonesian businesses by providing them multiple platforms to showcase their products, its associate company Bukalapak is helping small businesses in the country grow. Enterprises that sign up to the Bukalapak app have access to buying millions of different products at the best wholesale prices for resale into their local community, as well as the ability to offer digital services to their customers; including paying utility bills, moving remittance money, buying travel tickets and even investing in digital gold.

Access to innovative financial solutions will play a key role in driving Indonesia’s long term economic expansion. In this regard, Bank Mandiri, the largest financial institution in Indonesia, is committed to delivering relevant financial products and services to its customers around the country. This is part of the bank’s broader mission to seamlessly integrate its financial solutions into its customers’ lives by delivering fast and simple digital banking solutions.

Pertamina is utilising solar panels at its refinery in Central Java.

In the energy sector, Indonesia’s Pertamina is also committed to transforming its operations to contribute to a low-carbon economy as it works towards building a sustainable business by transitioning to greater use of clean energy. In particular, the country’s national energy provider has set its sights on the development of geothermal, hydro- and solar-based power generation. As part of this transition, it has announced plans to support the nation’s effort to decarbonize, starting with reducing its greenhouse gas emissions, mainly carbon dioxide, by 30% before 2030.

These progressive companies have leveraged technology and innovation to grow sustainable businesses, and will lead Indonesia’s recovery as it shakes off the effects of the pandemic in the coming years.

Singapore Scales New Heights

Despite the lingering impact of the Covid-19 pandemic, Singapore is taking center stage amid a resurgence in businesses, a calibrated resumption of travel, and upbeat consumer sentiment. The city-state has clearly regained its confidence as a global financial hub, with the growing number of wealthy entrepreneurs snapping up posh homes in prime residential districts, sending prices to record highs.

Adding to signs that the Singapore economy is returning to normalcy, the nation’s economic growth climbed a reassuring 7.1% in the third quarter compared to the previous year. This nascent recovery has boosted the country’s burgeoning fintech industry and the ever-resilient luxury real estate market. No doubt, the substantial economic stimulus measures announced by the government in the most recent budget has helped to further bolster economic activity across the board.

Peak of Luxury

While the restoration of international links has empowered certain sectors, it’s the legacy of the sundry local lockdowns that has brought added vitality to some businesses. With staying at home required for some people and the preferred choice for others over the past two years, the primacy of having access to truly resplendent residential spaces has never been greater.

Residential spaces don’t come more resplendent than the Wallich Residence, a skyscraper at the heart of Singapore’s central business district. The occupants of one of Singapore’s loftiest living spaces can endure pandemic-enforced confinement in the utmost comfort.

Inevitably, demand has soared for the remaining units in this deluxe abode, which extends from the 39th to 64th floor of the Guoco Tower, the city’s tallest and most exclusive mixed use residential, office and hotel structure. Now that fine dining and cultural exploration are very much back on the menu, the ultra-connectivity of the residence’s city center location has only further enhanced its allure.

Transborder Transactions

With trade rebounding, restrictions on travel being scaled down and supply chains surging back into life, the need for efficient and unfettered digital payments into China has become a priority for many international businesses. This bodes well for Aleta Planet, a Singapore fintech firm that processes cross-border digital payments.

Founded seven years ago, the successful rollout of its flagship AP-1 digital card has positioned Aleta Planet among the major players facilitating rapid and secure payments to China-based business partners and suppliers. AP-1 allows international users to make payments in China without the need for a local bank account.

This app-based system allows payments to be cleared into UnionPay personal accounts worldwide or to qualified WeChat users in China in an instant, much faster than the 2 to 4 business days it takes via telegraphic transfer. With its mainland system in place, the company is looking to replicate its services in other jurisdictions, making it ideally equipped to meet the needs of Singapore’s increasingly global businesses.

Recovery On The Horizon

Malaysia is on track for a resilient recovery after the disruption caused by the pandemic.

Buoyed by a high vaccination rate that has surpassed 90% among the country’s adult population, and the pledge by the government to boost the economy, Malaysia is on track to recover strongly from the disruption brought about by the Covid-19 pandemic.

In its latest report on Malaysia’s economy, Bank Negara Malaysia noted that the economy grew by 16.1% in the second quarter compared to a contraction of 0.5% in the first quarter of 2021. It also said that the economic performance was supported mainly by the improvement in domestic demand and continued robust exports performance.

Bank Negara Malaysia says the Malaysian economy is projected to expand by between 3% and 4% in 2021. It believes that the expected reopening of the economy will support a gradual recovery in the fourth quarter this year, with higher global growth and sustained policy support providing a further lift to economic growth.

“Malaysia’s growth recovery is expected to broadly resume in the latter part of the second half of 2021 and improve going into 2022,” says Nor Shamsiah Mohd Yunus, Governor of Bank Negara Malaysia.

Meanwhile, the Organization for Economic Co-operation and Development says that Malaysia remains a business-friendly country that attracts large flows of foreign direct investment and is well-integrated in global value chains.

According to its Ministry of Finance, Malaysia is registering net foreign capital inflows thanks to the positive progress on the National Recovery Plan. “For the month of August, a total of US$1.8 billion was registered in terms of foreign portfolio flows, marking the highest monthly net inflow since June 2020, and offsetting the declines in the two preceding months,” it said.

Seizing Opportunities

Many businesses had to adapt to changes as a result of the pandemic, and one company that did well was MedTech startup BookDoc. The six-year-old startup pivoted to help Malaysia cope with Covid-19 and at the same time diversified its business.

The company adapted its BookDoc app to become a booking platform that supported 500 government clinics and helped them manage queues and practice social distancing when Malaysia was going through its lockdowns.

Malaysia has gained an international reputation as a safe and trusted healthcare destination.

It also introduced innovative services such as “lab uberization”—conducting real-time PCR tests by going to people’s homes and offices instead of waiting for them to come into test centers. This helped BookDoc to diversify and weather the storm during the tough months.

As the economy continues to open up in 2021 and 2022, Malaysia Healthcare Travel Council (MHTC), an agency under the Ministry of Health, will continue to move forward with greater industry resilience to enhance the health tourism sector.

There is great potential for Malaysia’s medical tourism market as it has grown from around US$130 million to nearly US$400 million, an average of 16% in annual growth, between 2011 and 2019.

MHTC continues to actively promote medical tourism as it believes Malaysia is not only a safe and trusted healthcare destination but also offers strong value propositions. These include hospital fees being regulated by the government, world-class medical facilities that are easily accessible with a short waiting time, and specialty fields ranging from fertility, cardiology and oncology to orthopedics, neurology and health screenings.

Capitalizing on Technology

Malaysia has always been quick to capitalize on the power of technology, and one company at the forefront of developing smart cities is Cyberview, which is currently building three technology clusters centered on Smart Mobility, Smart Healthcare and Digital Creative spread across four zones in Cyberjaya. The project is estimated to contribute US$60 billion to Malaysia’s GDP and potentially create 87,000 job opportunities by 2045.

An aerial view of Cyberjaya, Malaysia’s premier smart city, where plans are in place to transform it into a global technology hub.

Cyberview believes that it has all the ingredients, from infrastructure to talent and policies, to strengthen Cyberjaya’s position as a global technology hub. After all, the likes of China Mobile International, Dell, Ericsson, HTC Global, Huawei and Modality Systems have made Cyberjaya Malaysia’s premier technology investment destination for decades.

Another company capitalizing on technology is Silverlake Axis, which is taking on newer, nimbler, fast-growing financial technology (fintech) companies at their own game. The company has just won a major digitalization project from a bank in Thailand that involves transforming a traditional operating model for banks into a digital one without affecting its legacy infrastructure.

This will help the Thai bank embark on their digital transformation with peace of mind as Silverlake Axis has the expertise to understand how banks work and is suited to helping them to transform through their digital journey.

Recognized Globally

Internationalizing Malaysia as a brand is one of the key strategies in reviving Malaysia’s economic fortunes for 2022. This is why the Halal Development Corporation (HDC) and the Malaysia External Trade Development Corporation are co-hosting the Halal Cluster Week at Dubai’s World Expo in November in a quest to attract US$80 million in potential trade and investment.

HDC plans to take its initiatives global through the introduction of its new Muslim Friendly Guidelines, a set of standards and regulations for the halal industry covering the retail, tourism and medical sectors. It also plans to undertake a halal ecosystem assessment in 22 countries in collaboration with the Islamic Development Bank. The study will help to identify key components of the halal industry in the countries involved, including best practices and gap analysis.

Meanwhile, the world’s largest glove maker, Top Glove, is setting its sights on going further by focusing on Environmental, Social and Corporate Governance (ESG) goals.

Top Glove realizes that it cannot just be good at producing gloves but also needs to be the best at producing these products in a sustainable way. With its emphasis on ESG, the company plans to reduce its carbon emissions and water consumption by 25% and 34%, respectively, by 2025, and reduce waste being sent to landfills by 10%. It has also committed to consulting experts on labor issues such as the worker recruitment process, employment terms, training and workplace safety, among others.

Looking Ahead

As Malaysia continues to look to the future, RHB Bank’s quarterly economic outlook report notes that a few key events are likely to support increase in consumption by the end of 2021 into early next year.

With working capacity increasing to 100% and business operating hours normalized as states recover, broader industries that were deemed non-essential and high-risk should gradually be reopened.

Coupled with the opening of international travel, which will support tourism-related segments, mobility should improve, which lends support to the labor market and private consumption recovery.

“Consumer spending is already well positioned to capitalize on the reopening of the economy. Household savings have significantly built up during the pandemic due to mobility restrictions, moratoriums and cash support. The increased savings are arguably involuntary, and mostly in liquid assets, which may likely be drawn upon when consumer confidence improves,” the report noted.

Timeless Luxury That Looks And Sounds Great

The occasional luxury item is often very comforting and enjoyable, but everyone has a different idea of what luxury means. Some people enjoy drinking vintage champagne or whisky while listening to exquisite music. Others may choose to splurge on a lavish vacation or an exceptional timepiece.

Though the luxury market has been around for centuries, the relationship between luxury and investment did not emerge until the 18th century. That’s when households began to purchase high-value goods, such as art and timepieces, according to Dr Seán Williams, a senior lecturer at the University of Sheffield’s School of Languages and Cultures. People began to consider luxury an economic and social asset during the period of European Enlightenment (with a particular emphasis on France) from the 17th to 18th centuries.

Nowadays, luxury is associated with authenticity, substance, and sustainability, principles embraced by haute couture brands like Bang & Olufsen and Richard Mille to a significant degree. These marques have created a powerful digital presence while attracting consumers through their aesthetic, luxurious, and environment-friendly products.

Bang & Olufsen, for instance, understands how music can bring people together, not only as entertainment but also as a source of passion and happiness. Its latest wirelessly connected speakers, such as the Beoplay A9 Fourth Generation and Beolab 28, combine noble finishes of oak or walnut, and sleek materials, such as aluminum and Kvadrat fabric, representing the future of home audio.

Looking like minimalist pieces of art, these speakers are easily upgradeable, repairable, and exchangeable. A touchscreen or smartphone allows audiophiles to stream their favorite music, and seamlessly connect to other speakers, televisions and digital apps.

Luxury transcends from high-performance music to high-performance timepieces. Richard Mille’s unapologetically bold watches are hailed as the ultimate expression of excellence, thanks to complex horological innovations, exceptional engineering, and hi-tech applications. Since its launch 20 years ago, the demand for the Swiss watchmaker’s timepieces consistently outstrips production.

As investment-worthy as its other premium timepieces, the new RM 72-01 Automatic Winding Lifestyle Flyback Chronograph and RM 65-01 Automatic Split-Seconds Chronograph herald new heights in haute horology. The former displays the company’s first proprietary flyback chronograph that took 30 months to complete, while the latter is the most complex timepiece ever created in its fabled Les Breuleux, Switzerland workshops.

It is easy to acknowledge such extraordinary achievements when you know you can count on being presented with the best-ever creations of sound and time that are as amazing and inspiring as they are exciting.

Redefining Purpose Beyond Profit

Corporates in Asia and the rest of the world are devoting more and more resources toward achieving socially responsible and sustainable outcomes as they seek to make a positive impact globally.

This trend has been accelerated by the pandemic, as remote work, changing consumer behavior and rising inequality have forced companies to rethink their priorities and adjust their strategies to adapt and thrive. Meanwhile, the challenges posed by the climate emergency continue to loom large on boardroom agendas.

According to a report by Deloitte, there is also growing evidence to suggest that companies with superior Environmental, Social and Corporate Governance (ESG) performance will also do well financially over the long term.

This drive to demonstrate ESG performance has led to an upsurge in companies looking to establish sustainability targets, from measurably reducing carbon emissions and single-use plastics, to ensuring that new building projects meet globally recognized certification standards.

Leading the Way

In the wealth management space, more of Asia’s leading business families are seeking out advisors who can help them invest with purpose and social impact. This comes as they are poised to pass an unprecedented amount of wealth on to a new generation of more socially aware family members.

To address their needs, financial institutions such as HSBC Global Private Banking are incorporating sustainability considerations into their investment and advisory processes. With an extensive network of non-governmental organizations (NGOs), the bank has also been supporting progressive clients in realizing their philanthropic ambitions, preserving their legacy and making long-lasting impact in the wider community.

Sustainability has also come to the fore in the real estate sector. For instance, Hong Kong-based Sino Group has been committed to making a positive impact through its vision of Creating Better Lifescapes, which aims to help communities thrive by embracing green living and wellness, pursuing meaningful designs, and seeking innovation while respecting heritage and culture.

Reflecting its commitment to this journey, Sino Group last year introduced its Sustainability Vision 2030, a blueprint charting the company’s path toward 2030 and beyond. This ambitious plan establishes goals that are in line with Sino Group’s three pillars of Green Living, Innovative Design and Community Spirit, and also aims to support the United Nations’ Sustainable Development Goals.

Thanks to forward-thinking companies such as these, Asia is moving purposefully toward a more sustainable and socially responsible future.

Philippine Economy Comes Back Stronger

The Philippines has always prevailed through major challenges, from natural disasters to political uncertainties. However, the lingering socio-economic impact of the Covid-19 pandemic could strain the country’s much vaunted resilience now more than ever. Though still rocky, a path to recovery does lie ahead.

GDP growth significantly rebounded in the second quarter of 2021, surging 11.8% compared to the previous year, the highest growth in more than three decades. Among major sectors, manufacturing expanded by 22.3%, construction by 25.7%, and services by 9.6%. These figures have already brightened the economy’s full-year growth outlook despite some expected bumps due to the continuing spread of coronavirus variants. The government’s goal of vaccinating all adults—70% of the population—by the end of the year is crucial for the economy to sustain its growth trajectory. More than 42 million total vaccine doses have been administered so far.

Vaccine distribution may be uneven across the country, but in Metro Manila at least, the rollout seems to be proceeding briskly. The National Capital Region—which accounts for around 36% of the national economy—seems to be moving towards herd immunity. As of late September, almost 70% of the region’s target residents have been fully vaccinated, while almost 90% have already received their first dose.

The efforts of the private sector, such as global port management company International Container Terminal Services, Inc., have been instrumental in procuring and distributing the vaccines. SM Investments, the country’s largest conglomerate, provided free vaccines not only to its workforce, but also stakeholders and business partners, offering its properties as vaccination and testing hubs.

Prudent financial policies and vital reforms are expected to clear the way for further recovery, with growth expected to pick up by the last quarter of 2021 and into next year. With several high-impact infrastructure projects slated for completion in 2022, job opportunities are bound to expand and the country’s competitiveness will improve. These are also supporting the appreciation of real estate values in major cities, providing investors with unprecedented opportunities. Rebounding exports and remittances, and increased spending ahead of next year’s general elections, are also expected to boost domestic consumer demand.

The increasing adoption of digital technology and online transactions has greatly accelerated over the past year, boosting efficiency and the ease of doing business. Growth has now been more decentralized, with the government focusing on decongesting the capital and stepping up digitalization initiatives to sustain economic activity. Indicators point to a Philippines that will bounce back better, with more inclusive and sustainable growth, supported by robust infrastructure, and a resilient population that’s more digitally savvy.

Asia Accelerates Digitalization Amid Pandemic

With the Covid-19 outbreak wreaking havoc across industries and the global supply chain, governments and businesses around the world accelerated their digital transformation. Such initiatives have taken front seat in Asia—home to the world’s factories—with the region stepping up investments on technological innovations needed to power the new normal post the pandemic.

China—a regional leader in adopting cutting-edge artificial intelligence, blockchain and cloud computing technologies—seeks to speed up the roll out of laws on protecting personal information as data analytics becomes prevalent in the country’s pursuit of smart nation status. The new regulations are embodied in its 14th five-year plan, which runs from 2021 to 2025.

South Korea has pledged to invest US$94 million in 2021 to support the tech industry in AI and 5G networks as part of its “Digital New Deal” initiative. Japan’s Growth Strategy Council has drafted a plan calling for the stimulation of innovation that involves digital transformation and grooming a greener society.

Countries across southeast Asia have launched their respective digitalization initiatives after the Association of Southeast Asian Nations (ASEAN) adopted the “Asean Digital Masterplan 2025”—a roadmap for the group’s digital cooperation from 2021 to 2025—in January.

In Indonesia, the “Making Indonesia 4.0” roadmap is helping the country’s industrial sector create new business models using digital technologies. Singapore’s plan is embodied in its Digital Government Blueprint, which aims to better leverage data and harness new technologies. In Thailand, the government has introduced the “Thailand 4.0” economic model, which utilizes digitalization to enhance the quality of life in the country.

Malaysia’s MyDIGITAL, which was launched in February, aims to transform the country into a regional leader in the digital economy. Under the blueprint, the government aims to attract US$16.5 billion worth of digital investments to boost the contribution of digital products and services to the country’s GDP to 22.6% by 2025 from 19.1% currently.

Focus On Cyber Security

To coordinate and manage new digital investments, the Malaysian Digital Economy Corp. (MDEC) has teamed up with the Malaysian Investment Development Authority to set up the Digital Investment Office (DIO). Initiatives run by the DIO will be guided by MDEC’s “Digital Investments Future5” strategy.

A key initiative in Malaysia’s digital transformation strategy calls for the fortification of the country’s cyber security defences. This is important given the growing threat of ransomware attacks—where cyber criminals steal data, encrypt and hold the digital infrastructure hostage until organizations pay the ransom, according to U.S.-based FireEye Mandiant.

The security specialist warns that governments and businesses urgently need to take prompt and preventive action to safe-guard their critical infrastructure against cyberattacks. Organizations can no longer treat cyber security as an inconvenient byproduct of doing business but must be engineered from the ground up.

To do so effectively, organizations must conduct a comprehensive audit, identify the weak spots and work with experts who can implement automated solutions to deal with cyber security threats and breaches.

ASEAN Cooperation

Throughout its history, the ASEAN has been resilient against economic and geopolitical crisis that has affected member countries in the past and more so now that the group is battling the challenges of the lingering Covid-19 pandemic. To recover and thrive again, the region would need to strengthen their cooperation.

“The digital economy is critical,” Lim Jock Hoi, ASEAN secretary general, said at a webinar organized by the CIMB Asean Research Institute in July 2020. “As you know, the pandemic has forced a lot of people to use digital technology and it is very refreshing to see that every one of us has adapted. In future, the economic driver will very much be in this area. We are looking at how best to use this as part of our post-pandemic recovery plan.”