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THURSDAY, October 06, 2022
nationthailand
Finance Ministry denies Thailand hiding THB1-trillion public debt

Finance Ministry denies Thailand hiding THB1-trillion public debt

TUESDAY, April 19, 2022

The Finance Ministry on Tuesday denied it is hiding a public debt worth 1 trillion baht, saying this amount was used as advance payments for subsidy programmes under the Fiscal Disciplines Act.

Pornchai Theeravet, director of the Fiscal Policy Office, dismissed an online report claiming that the government was hiding a debt liability of 1 trillion baht by not declaring the amount under the category of public debt in the state budget.

He explained that the 1-trillion-baht figure covered advance payments for the government’s many public subsidy programmes.

He said these advance payments were not listed as a financial liability, but the Finance Ministry had clearly summed up the payments and reported the amount.

Pornchai said the total advance payments made were still within the framework of 30 per cent of the annual budget as stipulated in Section 28 of the 2018 State Fiscal and Financial Disciplines Act.

A source from the Finance Ministry explained to The Nation that this amount was not counted as public debt because it covered advance payments under state policies.

The source said the central bank was ordered to cover funds needed to implement policies first before the government allocates a budget for reimbursement.

Such policies include the crop-price guarantee scheme as well as subsidies such as a reprieve from high-interest rates.

Finance Ministry denies Thailand hiding THB1-trillion public debt Finance Minister Arkhom Termpittayapaisith said the Monetary Policy Committee raised the ceiling of advance expenditure under Section 29 of the Fiscal Disciplines Act from 30 to 35 per cent in November last year.

He said this new ceiling was temporary and is due to expire at the end of September.

Arkhom also said that the Finance Ministry will need to consider two points related to the 2023 budget and advance expenditures to see if it should extend the 35 per cent ceiling for another year.

First, the ministry needs to find out which projects that have received funding can be wrapped up. If they can wrap up, then they should return the remaining funds to the Finance Ministry.

Second, the ministry will study the scope of the projects that are implemented in the 2022-2023 fiscal years to see if they can be downsized. These projects include the paddy-price guarantee programme.

If these subsidies can be downsized, then the advance expenditure ceiling will be lowered, Arkhom said.

“We want to return to the 30-per-cent ceiling because we don’t want to spend too much in advance,” Arkhom added.

The minister said the amount of advance expenditure has piled up because the Budget Bureau failed to allocate enough funds to compensate for the advance payments made.

Arkhom added that the spending for subsidies cannot be declared in the fixed expenditure of the annual state budget because the government cannot estimate details of subsidies in advance.