Constitutional Court may issue balancing ruling on loan decree and budget discipline

Thailand’s Constitutional Court may choose a balanced path in the case involving the government’s 400-billion-baht emergency loan decree, upholding the decree while attaching firm observations on how the government should handle future spending, a political scientist has suggested.

Asst Prof Dr Chettha Sapyen, a political scientist at Navamindradhiraj University, said the case had entered a critical stage and could become one of the most closely watched constitutional rulings in recent years.

The case is not only about the fate of the executive branch. It could also set an important precedent on the use of emergency decree powers under Section 172 of the Constitution when the country faces a crisis.

The Constitutional Court earlier accepted a petition for consideration in the case and ordered the Cabinet to submit explanations and supporting documents within seven days, according to Thai media reports.

Chettha said the central question was not only whether the court would allow the decree to stand, but how it would frame the legal principle governing emergency powers.

The court, he said, must allow the government enough room to respond to a crisis while ensuring that emergency decrees do not become a normal governing tool.

Based on the overall circumstances, including the facts at the time the Cabinet approved the decree, the global economic situation and previous Constitutional Court rulings, Chettha said there was a significant possibility that the outcome could be a “pass, but with observations” ruling.

He described this possible approach as a “plus ruling”, meaning the court could certify the constitutionality of the decree while adding recommendations on budget management in the next phase.

Section 172 of the Constitution allows the Cabinet to issue an emergency decree in specific urgent circumstances, including cases involving national security, public safety, economic security or the prevention of public disaster.

Crisis context may support decree

Chettha said the context at the time the decree was issued was important.

When the Cabinet approved the decree, Thailand was facing heavy external pressure. The Middle East crisis was intensifying, global energy prices were volatile, and the risk of an expanded conflict between the United States and Iran remained high.

As Thailand depends heavily on energy imports, the country could not avoid the impact. At the same time, businesses were carrying higher costs, public purchasing power was weakening, and the risk of “high inflation with slowing growth” was being widely discussed.

For that reason, Chettha said the court may look at the facts as they stood on the day the decree was issued, rather than judging the decision with the benefit of hindsight.

In legal terms, he said the court was likely to assess whether the government had sufficient urgent necessity at the time it exercised its power, rather than using later developments to retroactively judge a past decision.

This could give the government a strong legal basis, especially for the first 200 billion baht, which was intended to ease living costs through public assistance measures and the “Thais Help Thais Plus” programme.

Chettha said that if this portion of the borrowing helped support purchasing power and reduce the economic shock, the government’s argument on urgent necessity would carry more weight.

Energy restructuring may face closer scrutiny

The more delicate issue, Chettha said, is the remaining 200 billion baht allocated for restructuring Thailand’s energy system.

He said the government had grounds in May to treat energy security as urgent, as no one could know how far the Gulf crisis would escalate or when the US-Iran conflict would ease.

If the court rules that the decree is constitutional, this reasoning could still be explained on legal grounds.

However, time has changed some of the surrounding facts. The draft Budget Expenditure Act for fiscal year 2027 is now before Parliament and is expected to be enacted within the next few months.

This means energy restructuring could potentially be carried out through the normal annual budget process.

Chettha said it would not be surprising if the court added an observation that the government should consider using the 2027 budget mechanism for this portion, if conditions allow.

Such an observation would not amount to a rejection of executive power. Instead, it would reflect the principle that once an emergency begins to ease, the state should return to the ordinary budget process.

A possible ‘60:40’ ruling

Chettha said the ruling could take the form of what he called a “60:40” or “plus” decision.

The “60%” element would be the court’s recognition that the decree was a valid exercise of power under Section 172, because the country was facing an urgent and necessary situation at the time.

The “40%” element would be an observation that spending related to the energy transition in the next phase could be shifted into the 2027 annual budget, if the government considers conditions suitable.

He stressed that policy decisions would still remain within the authority of the executive branch.

Another important factor is the voting threshold. If the Constitutional Court were to rule that the decree is unconstitutional, it would need the support of at least six of the nine judges. This means the case is not simply a matter of a narrow majority, but would require a high level of consensus among the bench.

Chettha said the reasoning behind the ruling may matter more than the result itself.

That reasoning will shape future standards for when an “urgent necessity” under Section 172 exists, and when the government should return to the normal budget process.

If the court can balance the need to give the executive branch room to manage a crisis with the need to protect the rule of law and Parliament’s budgetary role, the ruling may become more than an answer to one case.

It could become an important milestone in Thailand’s constitutional law.

Source: NationTV