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SATURDAY, September 23, 2023

Government can borrow another THB1.3 tn before it hits debt ceiling

Government can borrow another THB1.3 tn before it hits debt ceiling
THURSDAY, April 21, 2022

The government still has room to borrow another THB1.3 trillion before it reaches the 70 per cent ceiling of public debt as a ratio of gross domestic product, a source from the Finance Ministry said.

Public Debt Management Office (PDMO) director Patricia Mongkhonvanit said on Thursday that there was still room for the Finance Ministry to borrow more loans, but the government will have to issue a special law to permit the borrowing.

She said all the borrowings must comply with existing laws and must clearly state the reasons, the urgency and objectives.

The PDMO director did not elaborate on the amount of money the government could borrow, but the source explained that the 70 per cent ceiling could allow the government to borrow another THB1.3 trillion.

The Finance Ministry source was speaking after Prime Minister Prayut Chan-o-cha said on Tuesday that he had asked the Finance Ministry to seek more loans for providing more subsidy packages, especially a new phase of the co-payment scheme, to the public.

The source said only THB70 billion are left of the loans borrowed under the THB500-billion borrowing decree. If the government wants to spend more than THB70 billion, the government would have to issue another decree to allow the borrowing.

If no new decree is issued, the government may divert the budget from the central fund or use advance payments, the source said. The government is allowed by the Budgetary Procedures Act BE 2561 (2018) to use advance payments with a ceiling of THB50 billion.

According to the source, the THB500-billion loans have been allocated in three categories:

— THB110 billion for medical and public health purposes

— THB220 billion for providing remedies to people affected by Covid-19

— THB170 billion for economic and social recoveries.

The source added that the Finance Ministry has not yet confirmed whether it would launch the fifth phase of the Khon La Krueng (half-half) co-payment scheme.

If the ministry goes ahead with the new phase of the scheme, it would need about THB39 billion if the grant of THB1,500 per person is approved to 26 million citizens, the source added.

Meanwhile, Fiscal Policy Office director Pornchai Thiraveja, who is also the spokesman of the Finance Ministry, said the fourth phase of the Khon La Krueng scheme will end in 10 days so those who have not used up the subsidy should hurry up.

He said the grant of THB1,200 has been given to 26.38 million citizens under the fourth phase. So far, 12.69 million people have used up the subsidy and 120,000 people have not spent any of the grant, the spokesman added.

As of April 19, a total of THB60 billion has been spent under the fourth phase of the Khon La Krueng scheme by 26.26 million subsidy receivers.

He said 1.35 million shops have joined the programme.