At the beginning of the year, Vietnam installed a new Prime Minister, replacing a candidate widely viewed as having spearheaded reforms over the past decade. The Philippines also elected a new President in May, but he is widely viewed as taking a hard-line stance on issues such as crime and domestic and foreign policy (Washington Post, 10 May 2016).

By contrast, and perhaps more reassuringly, over in Indonesia the pro-reform ruling coalition has been benefiting from shifting political allegiances, and its initial minority presence in parliament has now turned into a majority. Then there’s Malaysia. Despite the troubles with sovereign wealth fund 1MDB, the results of a state election and two federal by-elections suggest that the ruling coalition remains in a strong position ahead of general elections in 2018. Last but not least, there’s Thailand, which will vote in a referendum on the draft constitution in August. If approved, this could lead to an election in 2H 2017, potentially paving the way for the country to emerge from over two years of military rule.

What will the above political shifts mean for structural reforms and the longer term economic outlook? In the following sections, we look at the reform agenda of each country in detail, and how the recent or upcoming political changes might impact these. Some of the desired reforms, such as the need for greater investment and in particular, infrastructure, recur across the region. Government balance sheets in some places will also need to be kept in check, and trade liberalization pursued. But policymakers are approaching all of these issues in their own unique ways, and change is afoot.

Eoin Treacy's view

Here is a link to the full report.

The ASEAN region is unlikely to escape unscathed if European and UK demand for its exports deteriorates. However the majority of ASEAN companies do not have large investments in Europe and are more leveraged to the demand growth stories that continue to benefit from improving standards of governance at home. 

The fact the Rodrigo Duterte is committed to economic policy continuity is a positive for the Philippines. If he can reduce corruption and pacify restive states confidence in the ability of the market to weather the challenges it faces will improve. The Philippines Composite rallied this week to test its all-time high near 8000 and some consolidation is looking more likely than not. However a sustained move below the trend mean would be required to question medium-term scope for additional upside. 

Here is a link to a Morgan Stanley report which takes a more cautious view.