Vietnam and the Philippines Compete to Become ASEAN Champions, Why Is Indonesia Falling Behind?

The increase in public investment in the Philippines is also considered an important factor in supporting economic growth. The government’s investment allocation increased from 2.9% to 4.1% of GDP, supported by macroeconomic stability and an improved business climate. Despite recording rapid progress, both countries still face structural challenges. World Bank East Asia Practice Manager Sebastian Eckardt said Vietnam needs to strengthen renewable energy resilience and overcome electricity supply constraints to support the production target of 1.5 million electric vehicles by 2030. On the other hand, Indonesia is still considered to have great strength from its domestic market, natural resources, and demographic bonus. However, without accelerating regulatory reform, simplifying bureaucracy, improving the quality of education, and strengthening industrial downstreaming, Indonesia is considered at risk of losing momentum as the main economic growth centre in ASEAN. The ASEAN Investment Report 2024 recorded that foreign direct investment flows to six major Southeast Asian countries, including Vietnam and the Philippines, averaged USD236 billion per year throughout 2021-2023. The increasingly tight economic competition in the region is considered a warning for Indonesia to immediately improve its competitiveness so as not to fall further behind its neighbouring countries.