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FTI: B1trn loan needed for recovery

FTI: B1trn loan needed for recovery

BANGKOK: The government may need to borrow an additional B1 trillion to address the impact of the coronavirus pandemic, says the Federation of Thai Industries (FTI).

economicsCOVID-19
By Bangkok Post

Monday 10 August 2020, 09:30AM


FTI chairman Supant Mongkolsuthree. Photo: NNT / file

FTI chairman Supant Mongkolsuthree. Photo: NNT / file

The borrowing would be used to stimulate the grassroots economy, which is still reeling from the crisis, said FTI chairman Supant Mongkolsuthree, reports the Bangkok Post.

Last Tuesday (Aug 4), the Cabinet approved the Finance Ministry’s proposal to borrow US$1.5 billion from the Asian Development Bank to stimulate and rehabilitate the economy. The borrowing scheme is part of the government’s plan to issue a royal decree to borrow B1trn for stimulus.

Of the B1trn, B600bn is for implementing health-related plans and giving financial aid to affected individuals. The remaining B400bn will go to economic and social rehabilitation through projects aimed at creating jobs, strengthening communities and building community infrastructure.

The public debt level will rise to 57% of GDP from June’s 44.8% upon borrowing the full amount under the loan decree.

Mr Supant said the government should extend the debt moratorium measure for small and medium-sized enterprises (SMEs) from six months to two years or until 2022.

This is because SMEs are likely to continue being affected by the crisis next year, he said.

The two-year debt moratorium measure could be divided into two phases, according to Mr Supant.

The first phase, spanning six months, would be for an interest payment suspension and the remaining period would be for interest-only payment.

Thai Residential

The move would help SMEs adjust to the crisis as profits disappear this year, Mr Supant said.

Pisit Serewiwattana, president of the Export-Import Bank of Thailand, said the bank is considering extending the debt repayment period for customers affected by the pandemic.

The measure to extend debt repayment by six months will end in September and October and could be extended by another year, Mr Pisit said.

A source at Exim Bank said there are many ways for customers to extend debt repayment, such as halting principal and interest payment or payment of half the principal.

Meanwhile, PTT Global Chemical (PTTGC), Thailand’s biggest petrochemical maker by capacity, suffered a loss of B7.1bn in the first half of the year because of a slowdown in global fuel consumption caused by the pandemic, the Bangkok Post noted in another report.

The company made a net profit of B8.6bn in the same period last year, but it failed to maintain momentum as prices of petroleum products fell during the coronavirus crisis.

Revenue in the first half dropped by 26% to B162bn from B220bn in the same period last year.

In the second quarter, the revenue fell by 35% to B69.2bn from the same period last year. This was a 26% drop from B93bn in revenue made in the first three months of 2020.

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