Expect second round of Bt5,000 handouts after May 8: Finance Ministry
The second round of cash handouts will begin in early May, assures the Finance Ministry as it is getting ready to borrow money to finance the aid package.
Those who received the first Bt5,000 this month will receive another Bt5,000 in early May. Also, the number of people eligible for this aid has been expanded from 9 million to 14 million.
Authorised by an emergency decree to borrow Bt1 trillion to help businesses and people affected by the Covid-19 fallout, the Finance Ministry will borrow the first batch of Bt70 billion in May, Patricia Monkhonvanit, director general of the Public Debt Management Office (PDMO), said.
The ministry will issue a promissory note with four years of maturity, and the PDMO on April 29 will invite commercial banks to bid for it. The bank that bids the lowest interest rate will win.
The estimated interest rate is expected to be slightly higher than the BIBOR (Bangkok Interbank Offered Rate) or above 0.98 per cent, she said.
The Finance Ministry expects to get the money from commercial banks by May 5 and will be able to put Bt5,000 in the accounts of eligible people from May 8, she said.
On the edge
The country’s public debt is approaching critical level.
Owing to the impact of the novel coronavirus, the Finance Ministry will have to borrow more this year and the next than it previously planned.
Under the Bt1-trillion loan scheme, the ministry will borrow Bt600 billion in this fiscal year and Bt400 billion in the next.
Initially, the ministry only planned to borrow Bt894 billion to cover the budget deficit in the 2020 fiscal year, so with this extra obligation, its total borrowing for this year will stand at about Bt1.5 trillion.
In order to deal with this burden, the Finance Ministry is planning to issue savings bonds worth Bt20 billion to Bt25 billion to raise funds from individual investors. The ministry will also raise 80 per cent of the funds domestically via both short- and long-term ventures, while the rest will come from overseas sources.
This extra borrowing will push Thailand’s public debt to 51.84 per cent of the gross domestic product (GDP) this year up from the current 41 per cent, while new borrowings next year will increase the public debt to the tune of 57.96 per cent of GDP.
The public debt is approaching a prudential public debt ratio of 60 per cent of the GDP. This debt estimation is based on an assumption that the economy will contract 5.3 per cent this year and grow 3 per cent next year.
