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COVID Fallout: Provincial government moves to mediate debt-relief for Phuket businesses

COVID Fallout: Provincial government moves to mediate debt-relief for Phuket businesses

PHUKET: The Phuket Provincial Government is calling for financial institutions to discuss terms for repayment of outstanding debts among local businesses as many are suffering heavily from the fallout of the COVID-19 lockdown provisions.

economicstourismCOVID-19
By The Phuket News

Wednesday 17 June 2020, 06:58PM


Financial institutions, including banks and non-banks, were invited to discuss terms of repayments at a special multi-mediation session held at Phuket Community Hall in Phuket Town yesterday (June 16).

The event was attended by Phuket Governor Phakaphong Tavipatana together with Vice Governor Phichet Panaphong and Phuket Provincial Office Chief Thalerngsak Nuchprahan.

Governor Phakaphong explained that Phuket has been “massively affected” by the COVID-19 situation by the simple fact that no tourists have been coming to Phuket.

“Tourism businesses – hotels, restaurants and tour agencies – generally generate around 85% of Phuket’s gross provincial product (GPP),” Governor Phakaphong said.

“With no tourists coming to Phuket, these have been affected, leading to problems with debt,” he added.

To help facilitate a solution to the extra pressure Phuket businesses are facing from outstanding debts, the Phuket government yesterday aimed to mediate between local business owners and 15 financial institutes, both banks and non-banks, invited to the event.

At the sessions, the main focus was extending the deadline by which debts were to be paid, and reducing the money to be repaid as monthly installments.

UWC Thailand

“We expect this may help local business owners and Phuket residents,” Governor Phakaphong said. 

Event attendee Rachin Thongmakkul praised the mediation sessions. “This is a good idea to set up a place where creditors and debtors can together find the best solution.

“I believe that most people will still suffer with housing or vehicle debts, especially after the government’s debt-relief programs end, as people have not been able to work,” he said.

Another attendant, Chalermpong Seangdee, also praised the idea.

“The negotiations will succeed if financial institutions understand the pressure that business owners have to face during this crisis,” Mr Chalermpong said.

“Business owners have not been helped by the government, so we want financial institutions to help us by reducing the interest to be repaid on outstanding debts,” he added.

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charles | 18 June 2020 - 14:30:23

what about all the foreign owned businesses that lease property here in Phuket. Most landlords have not been willing to reduce rents on tourist related businesses that have had no customers  since March . those operators are now being faced with the options of trying to find money to cover rent, relocating, to smaller premises to reduce rent,   going into storage mode or shutting down totally.

Kurt | 18 June 2020 - 11:36:51

In every fleld thai creditors and debtors are now in the same 'Covid-19 boat'.  It can't be that only debtors have to carry the burden. Creditors normally insure their outstanding credits. So, they can let that mechanism work, and also write off part of losses, which is inevitable., and reset future loan supplying analyses. Teach debtors to make financial fire walls for rainy days. 

Kurt | 18 June 2020 - 10:50:21

A dept-relief program is good, but it must go hand in hand with a 'trim down your business plan', as businesses have to anticipate on becoming structural smaller in the 'New Normal' business future. The business palm trees will never grow anymore into the previous money making Baht-Heaven. Just count on 50-60 tourist volume in future. If realised you are lucky.

 

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