Biweekly News Collection No.31

No.31 (Apr 19, 2021)

Market Industry Trend

ABC, CMA set out six debt relief measures. The Association of Banks in Cambodia (ABC) and Cambodia Microfinance Association (CMA) requested their members to adopt six measures of financial relief in light of the economic fallout and depressed incomes caused by the recent community outbreak. The first policy is to exempt clients infected with the coronavirus from interest payments and penalties for one month, automatically restructure credit (with the client’s consent), and deferring principal payments for three months. Clients purporting to be infected with the virus must present a positive test result confirmed by the relevant authority. Second, automatically restructure credit for clients under quarantine (with their consent), deferring principal and interest payments for one month, and waiving all penalties. Third, provide convenient and prompt credit restructuring to help clients affected by the pandemic. Fourth, provide emergency and supplementary loans with easing terms and conditions as well as reduce interest rates to sustain and rehabilitate family economies during and after the health crisis. Fifth, restructure loans and waive all penalties for the first homeowner. Lastly, the sixth policy is to offer as many exemption benefits as possible to clients who have died of Covid-19. (Phnom Penh Post)

DBD Engineering: First listing on growth board. The Cambodia Securities Exchange (CSX) has approved DBD Engineering Plc (DBD) as its first listing on the new CSX Growth Board for small and medium-sized enterprises (SMEs). The growth board is a listing option for potential SMEs with a minimum capital of $500,000. DBD is one of the top mechanical, electrical, and plumbing engineering firms in Cambodia and has been involved with some of the most prestigious and high-profile projects including major plumbing work for both Aeon malls in Phnom Penh, the North Park and Dodajiu condominiums. Total revenue reported in 2020 was $12.53 million and is forecasted to generate $12.71 million in 2021 The company operates in construction and real estate development which is one of the highest growth sectors in the local economy. Listing on the growth board will allow SMEs access to capital financing and improve public images for the future growth of the business. (Khmer Times)

Cambodia registered about 8,000 trademarks in 2020. Local and international companies registered 7,997 trademarks with the Ministry of Commerce 2020, marked as a rise of 30% over the previous year. The trademark registration offers protection for appellations of origin linked to specific geographical locations and associated qualities, reputations, and characteristics, especially those designated as Geographical Indications (GI). Current GI products include pepper, palm sugar, rice flake, milled rice, locally produced fruits, and cuisine from the different regions within the country. GI trademark registration is an important tool to encourage the community to produce high-quality GI products by strengthening and expanding production chains, improving systematic quality control, and leading to more exports abroad. (Phnom Penh Post)


Sub-decree defines VAT provisions. The government has issued a sub-decree on the implementation of value-added tax (VAT) on e-commerce activities in Cambodia. The sub-decree defines special conditions and mechanisms for levying VAT on digital goods and services provided by non-resident taxpayers who don’t have a permanent office in Cambodia to ensure the effectiveness of tax collection. The sub-decree states that tax registration for non-resident taxpayers shall be made according to the classification of taxpayers under the self-declared regime and only apply for VAT purpose. After the registration, non-resident e-commerce providers are obliged to file monthly VAT returns and pay 10% VAT on the value of the transaction to the Cambodian tax authority no later than the 20th of the following month after those transactions are incurred. Resident and non-resident taxpayers who do not fulfill their tax obligations in contravene of this sub-decree shall be punished following the taxation law. (Phnom Penh Post)


Cambodia maintains export growth to South Korea. Cambodia exported $99.07 million worth of merchandise to South Korea in the first quarter of 2021, marking an increase of more than 5% compared to the reported figure in the same period last year, according to data from the Korea International Trade Association (Kita). The surge in the value of exports is partly due to the effect of the establishment of a bilateral free trade agreement (FTA) between the two countries. Cambodia and South Korea concluded negotiations on a bilateral FTA in early February and are scheduled to sign the deal in June. The enhancement of international relations and market diversification help to boost the country’s productivity which leads to an increase in export figures. (Phnom Penh Post)

Milled rice exports decline year on year. Cambodia’s exports of milled rice in the first two months of the year were valued at $64.53 million, and amounted to 76,222 tons, according to a report from Cambodia Rice Federation (CRF). This was a decline of around 44.16% compared with the same period last year. The decrease was mainly due to a shortage of shipping containers and high freight costs. Milled rice exports in January amounted to 34,273 tons were sent to 28 destinations. Meanwhile, in February, the export figures increased by 22% to 41,949 tons were delivered to 35 countries. China is the largest market for Cambodia’s rice export which accounted for 49.37% of total rice exports. The next largest market of Cambodia’s rice consumption is the European Union and ASEAN with a share of 24.91% and 8% respectively. (Khmer Times)

IMF, World Bank to offer ‘green debt swaps’. The International Monetary Fund (IMF) and the World Bank will introduce the option of green debt swaps to developing counties. Green debt swaps would partially forgive national debt for countries under the condition that the forgiven amount of funds is used to fund climate-friendly initiatives in the future. Developing countries face a double crisis in which they are under pressure to pay down their debt while also confronting environmental problems. According to IMF’s managing director Kristaline Georgieva, climate change was a high priority for the IMF. The climate risks are growing and they are substantial for macroeconomic and financial stability. IMF had offered programs in the past to assist countries at high risk of climate change effects especially for countries that rely heavily on agriculture, where floods and droughts can severely affect livelihoods. The two institutions (IMF and World Bank) are currently working together to develop an “organizing framework” for connecting debt relief to countries’ plans for investing in green, resilient, and inclusive development. (Khmer Times)

Biweekly News Collection No.30

No.30 (Apr 02, 2021)

Market Industry Trend

$200M credit guarantee scheme launched. The Ministry of Economy and Finance has recently launched a $200 million credit guarantee scheme to provide small and medium-sized enterprises (SME) to help businesses sustain the ongoing Covid-19 crisis. The Business Recovery Guarantee Scheme (BRGS), under the ministry’s Credit Guarantee Corporation of Cambodia Plc (CGCC), will widen access to formal loans from participating financial institutions (PFI) for working capital, investment, and business expansions. The primary mission of the scheme is to provide credit guarantees to PFIs to support and assist financially viable businesses that lack collateral to secure loans. Eligible applicants under BRGS must be businesses whose majority shares are owned by Cambodians. CGCC’s guarantee will act as collateral or security for 70% to 80% of the loan amount to be borrowed. The PFIs in this scheme include ACLEDA Bank, Cambodia Post Bank, Asia Pacific Development Bank, AMK MFI, Canadia Bank, Phillip Bank, and Prince Bank. (Khmer Times)

Thai bourse ‘the highest’ fundraiser for ASEAN firms. The Thai stock market has the highest fundraising value among ASEAN countries in the first quarter of this year. According to data from the Stock Exchange of Thailand (SET), Thailand’s fundraising as of February 2021 was 46.1 billion baht ($1.48 billion). In the first quarter of 2021, five companies launched initial public offerings (IPOs) with a market capitalization of 217.41 billion baht at IPO price. Of those companies, PTT Oil and Retail Business (OR) and Rojukiss International (KISS) were listed on the SET, while Jakpaisan Estate (JAK), TQR, and President Automobile Industries (PACO) were listed in the Market for Alternative Investment. It is also notable that up to 30 companies in properties funds, real estate investment trusts, and infrastructure funds are expected to be listed in the Thai stock market this year. (Phnom Penh Post)

Cambodian rice price upon the international market. The price of Cambodian milled rice on the international market has seen a slight uptick in the first quarter of 2021. According to a price list compiled by Cambodia Rice Federation (CRF), the premium “Malys Angkor” brand of fragrant rice is currently worth $825 per ton, an increase of 1.10% from 2020. The premium soft-cooking white rice costs $585 per ton, a rise of 2.99%, and premium-quality organic parboiled rice is $585 per ton, a surge of 1.74%. The new standard-fragrant rice (SKO) fetch $765 per ton. Last year, Cambodia exported 690,829 tons of milled rice. Shipments of milled rice to China weighed 289,439 tons, accounting for almost 42% of total export. (Phnom Penh Post)


Duty-free access to VN for 31 tariff lines. The Ministry of Commerce has recently announced that 31 Cambodian tariff lines (mostly in agricultural products) will carry zero rates to neighboring Vietnam for 2021-2022. This comes as the Bilateral Trade Facilitation Agreement for 2021-2022 was formally ratified after the completion of internal procedures, with retroactive benefits for exports. The agreement is made to drop import tariffs on dozens of products which are to be renewed every two years. However, the goods covered in the deal are determined every year. As part of the agreement, Vietnam will provide duty-free quotas on 3,000 tons of dried tobacco leaves and 300,000 tons of milled rice this year. This agreement will strengthen trade relations between the two countries and boost economic growth. (Phnom Penh Post)

ADB GREEN PROJECTS GAIN $300 MN. The Green Climate Fund (GCF) has granted $300 million to the Asian Development Bank (ADB) to assist in creating environmentally-friendly infrastructure projects that aim to help economies in the region recover sustainably and create jobs. The ADB said the funds will be utilized by the ASEAN Catalytic Green Finance Facility’s (ACGF) Green Recovery Program to support green infrastructure projects in ASEAN member nations, specifically in Cambodia, Indonesia, Lao, and the Philippines. The ACGF provides ASEAN member governments with technical assistance and access to more than $1.4 billion in loans from the   ASEAN Infrastructure Fund and co-financing partners: ADB, Agence Francaise de Development, the ASEAN Infrastructure Fund, the European Investment Bank, the European Union, KfW and the Republic of Korea. This program is designed to support green infrastructure investment which will create climate-friendly jobs and reduce greenhouse emissions. In Cambodia, the ADB has been involved in the investment in a number of solar farms, hydropower, and biomass projects. These funds will help to stimulate green investment within the country and help to create a clean and environmentally friendly economy. (Khmer Times)

UNEMPLOYMENT RATE IN CAMBODIA, THE LOWEST IN ASEAN. All 10 ASEAN member states have faced a sudden increase in unemployment in 2020 as a consequence of the global pandemic. However, Cambodia has the lowest unemployment rate among the bloc. According to World Bank’s Unemployment Rate 2020, the unemployment rate in Cambodia was only 0.31%, while Lao PDR 0.95%, Thailand 1.02%, Myanmar 1.79%, Singapore 5.19%, Malaysia 4.55%, Indonesia 4.11%, Philippines 3.36%, and Vietnam 2.27%. Brunei has the highest unemployment in ASEAN at 8.37%. The ongoing global pandemic has left severe damage on the economic and labor market which led to an increase in the unemployment rate.