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Mid-year funds available for more stimulus

Mid-year funds available for more stimulus

BANGKOK: A mid-year budget worth B100 billion is available for the government to finance new economic stimulus measures while the fiscal 2020 budget is held up, says a senior official at the Finance Ministry.

economicstourismChinesehealthCoronavirusCOVID-19
By Bangkok Post

Monday 17 February 2020, 01:58PM


Stimulus measures are urgently needed to ramp up economic growth, which has been hampered by the novel coronavirus outbreak, drought conditions and the delayed fiscal budget, said Lavaron Sangsnit, Director-General of the Fiscal Policy Office.

The B100 billion is available from the B400bn mid-year budget allocated for emergency use. The budget can fund measures to help drought-hit farmers, the fourth phase of the Taste-Shop-Spend (“Chim Shop Chai”) scheme and future tourism stimulus packages, but it must be doled out by September to prevent unused budget being cancelled, Mr Lavaron said, noted a report by the Bangkok Post. (See story here.)

Borrowing carried out by the Public Debt Management Office (PDMO) is another way for the government to finance investment projects that need to be started this year, he said.

The PDMO will consider the appropriateness of additional borrowing, Mr Lavaron said.

The investment budget for fiscal 2020 amounts to B600bn. Half has already been committed to contractors and the remainder is for new projects.

The law permits regular and obligatory budget to be taken out based on the previous year’s budget if the legislative process for the annual budget bill is incomplete before the fiscal year starts, while new investment budget disbursement is prohibited.

The B3.2-trillion annual budget expenditure for fiscal 2020 was supposed to be available from Oct 1, 2019 but was hampered by the lengthy government installation and legislative process.

The Constitutional Court ruled that the annual budget bill was valid but needed to be voted on again by the lower house for the second and third readings after some MPs were alleged to have voted by proxy.

Mr Lavaron said the annual budget for fiscal 2020 is expected to be ready by April at the latest because the revote on the bill has already passed and the Senate will vet the bill before seeking royal endorsement.

“According to the law regulating government procurement, state agencies are allowed to set the scope and details for the terms of reference and finalise bid winners even though the fiscal 2020 budget bill has yet to be acted on, allowing them to immediately proceed with procurement processes when the bill comes into force,” he said. “Signing procurement contracts must be held off if the budget fails to be doled out in this fiscal year.”

Patricia Mongkhonvanit, director-general of the PDMO, said the office is deciding on investment projects that can be initiated.

Under the Public Debt Management Act, the PDMO’s borrowing is restricted to 10% of annual budget expenditure.

Based on the B3.2trn budget, the state agency can borrow up to B320bn, but borrowing is unlikely to hit the ceiling because only projects that need investment funds right away are allowed.

"The PDMO prepares guidelines for borrowing and sourcing funds," Mrs Patricia said. "The agency is going through projects to ensure they are qualified for the borrowed funds, and the government will decide on the project later. State agencies that are responsible for investment in projects must propose the project to the cabinet for approval. Given that the fiscal 2020 budget bill will come into effect soon, some projects are ready to draw down the budget immediately."

COLLECTIVE ACTION

More than 500 members of the Thai travel and tourism industry attended a top-level brainstorming session organised by the Ministry of Tourism and Sports last Thursday (Feb 13) to discuss unified and well-coordinated strategies and actions to facilitate a recovery from the inbound tourism downturn caused by the Coronavirus Disease 2019 (COVID-19) crisis.

Presided over by Tourism and Sports Minister Phiphat Ratchakitprakarn, the session was attended by the Tourism and Sports Permanent Secretary Chote Trachu, Tourism Authority of Thailand (TAT) Governor Yuthasak Supasorn, Department of Tourism Director-General Taweesak Vanicharoen, Thai Chamber of Commerce Chairman Kalin Sarasin and tourism corporate leaders and senior executives from all around the country, explained a report by the TAT. (See here.)

The session began with opening remarks and a policy statement by Minister Phiphat, followed by a number of high-level academic lectures to understand the trends, directions and impact of the epidemic on the global and local Thai economy as well as the tourism industry.

In the afternoon session, the participants were divided into four groups to discuss more specific actions on 1) stimulating travel and tourism for both Thai and foreign tourists, 2) enhancing tourism standards, 3) building confidence among Thais and foreigners, and 4) setting recovery measures.

In his opening remarks, Minister Phiphat thanked all the participants for coming and said that it was time for the entire industry to unite and harness its full creative potential in ensuring the earliest possible recovery from the COVID-19 crisis.

He said the results of the workshops of the four brainstorming groups will allow the agencies under the Ministry of Tourism and Sports to more accurately define strategies and plans that are timely and able to handle a very rapidly-changing situation. It will also allow the private sector to take their own actions to rebuild their businesses.

“We now have to convert a crisis into an opportunity. It is important to get the private sector back on its feet, which is considered the main mechanism to drive the country’s tourism industry. The Ministry of Tourism and Sports will present the results of the meeting to the Cabinet of Ministers.

UWC Thailand

“Tourists from all over the world have confidence in the tourism industry of Thailand. The Ministry of Tourism and Sports is ready to lead the recovery effort, stand by the entrepreneurs and all Thai people and ensure that tourism can regain its rightful place as a contributor to stable, prosperous and sustainable national growth.”

TAT Governor Mr Yuthasak acknowledged that the entire industry had suffered but it was important for all sectors to unite and cooperate and help itself and to just wait for government assistance.

He also presented the range of TAT activities to communicate the facts and status updates in order to present accurate, reliable news and build confidence among both Thai and foreign tourists.

The TAT assistance measures include both immediate and long-term, divided into three categories:

1) Business-driven measures to help entrepreneurs by offering financial and tax relief;

2) marketing and confidence-building measures to regain trust and stimulate tourism, and

3) restore and reform measures to improve sustainability and upgrade the importance of tourism safety as part of the national agenda.

 

Mr Yuthasak added that the effectiveness of the government’s efforts will be limited without the strong and critical support and power of the private sector, which has always been a major force.

“We will not let the COVID-19 crisis beat us. Through “Cooperation, Love, Unity” in the Thai tourism industry, I am confident that we will overcome the Corona crisis under the leadership of Minister Phiphat Ratchakitprakarn.”

The Cabinet has already approved a number of short-term and long-term measures proposed by the Ministry of Tourism and Sports, said the TAT report, including:

1) Tax measures by extension of the filing of tax returns for the fiscal 2019 until the end of June 2020.

2) Domestic seminars and tax measures to support the hotel business.

3) Strengthening the supply chain measures.

4) Establishing a steering committee to strengthen the supply chain, education and framework for expanding the operating hours of establishments in tourist areas or zoning, as well as supporting charter flights for high-spending tourists to emerging destinations.

The brainstorming sessions were preceded by opening lectures by four eminent persons, the report added, as follows:

• “Cooperation in resolving and supporting emergency situations affecting sustainable tourism” by Thai Chamber of Commerce Chairman and Board of Trade of Thailand member Kalin Sarasin.

• “Global and Thailand view under the coronary virus crisis 2019 by Assoc Prof Dr Somchai Phakaphaswiwat, Independent academic.

• “Survival of the Thai economy under the threat of virus” by Dr Don Nakornthap, Senior Director, Macroeconomic Department, Bank of Thailand.

• “Building confidence in Thailand during the Coronavirus crisis situation and the tourism impact in the future” by Assoc Prof Dr Aat Pisanwanich, Director, Centre for International Trade Studies (CITS), University of the Thai Chamber of Commerce.

• “A policy framework for driving solutions to support the emergency situation that affects sustainable tourism” by the Permanent Secretary of Tourism and Sports, Chote Trachu.

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