Asean+3 Fiscal Fiscal Developments Remain Resilientamid Continued Energy-Shock Uncertainty

 Fiscal revenues strengthened across most ASEAN+3 economies, supported by resilient economic activity, while government spending continued to reflect policy responses to the energy shock arising from the Middle East conflict, according to the September 2026 edition of the ASEAN+3 Quarterly Fiscal Bulletin (QFB), released today by AMRO.

Revenue collection recorded positive year-on-year growth in most economies, driven by stronger income and consumption taxes. Corporate income tax collections benefited from improved corporate earnings—particularly in economies benefitting from the AI-driven semiconductor upcycle. Stronger labor income and asset-market activity also supported personal income tax revenue, while resilient domestic demand helped sustain consumption tax collections. Expenditure continued to increase, driven mainly by energy-related support and social programs, while capital spending remained constrained in several economies by implementation bottlenecks.

“Fiscal positions across the region continue to demonstrate resilience despite heightened external uncertainty,” said AMRO Deputy Director Abdurohman, who overseas Functional Surveillance and Research. “Stronger revenue collection is supporting fiscal positions, but elevated energy prices and higher financing costs continue to pose challenges for policymakers.”

Fiscal policy continued to respond to the impact of the Middle East conflict. Measures introduced following the onset of the conflict in March remained in place through August, although some temporary emergency measures were gradually phased out. Governments continued or expanded support to cushion the impact of higher energy prices and cost-of-living pressures, while measures to strengthen longer-term energy and supply-chain resilience were broadly maintained.

Beyond near-term support, ASEAN+3 economies continued to pursue broader fiscal reforms aimed at strengthening fiscal resilience. Recent tax policy measures sought to balance targeted relief and support for growth while broadening tax bases, rationalizing tax expenditures, and strengthening tax administration. Governments also took steps to diversify financing sources and investor bases, strengthen medium- and long-term fiscal planning, improve spending efficiency and public financial management, and support the green transition.

The QFB also reviews the FY2027 budget proposals of Indonesia, the Philippines, and Thailand. The three budgets broadly seek to balance support for economic growth and development priorities with fiscal discipline, emphasizing on growth-enhancing spending, greater expenditure efficiency, and stronger revenue mobilization.

“Looking ahead, fiscal policy will need to balance support for growth and vulnerable groups with efforts to rebuild fiscal space, said Seung Hyun (Luke) Hong, AMRO Group Head for Fiscal Surveillance. “Continued efforts to strengthen revenue mobilization, improve spending efficiency, and reinforce public financial management frameworks will be important for maintaining fiscal sustainability and resilience.”