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Thailand borrows US$ 1.5 billion from ADB to fight Covid-19

The ADB’s program supports the government’s efforts to counter the impacts of the coronavirus disease (COVID-19).

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Asian Development Bank (ADB)

The borrowing is a part of an executive emergency decree empowering the Thailand’s Finance Ministry to seek loans up to one trillion baht ($32 Bln) to combat economic and social problems resulting from COVID-19 .

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Finance Minister Arkhom Termpitayapaisith and Hideaki Iwasaki, country director for the Thailand Resident Mission of ADB, signed the contract of the COVID-19 Active Response and Expenditure Support Program worth US$1.5 billion.

Public Debt Management Office director-general Patricia Mongkhonvanit said that the government has already borrowed Bt338 billion out of the proposed Bt1-trillion loan.

The ADB’s program supports the government’s efforts to counter the impacts of the coronavirus disease (COVID-19). With a large tourism sector, strong global supply chain links, and a large base of migrant workers, Thailand’s economy is highly vulnerable to the pandemic.

The government and Bank of Thailand (BOT) introduced a number of relief and stimulus packages, totaling $71.4 billion (B2.3 trillion) to support the healthcare sector, protect the poor and the vulnerable, stimulate the economy, and stabilize the financial markets in fiscal years (FY) 2020 and 2021.

Fiscal stimulus measures account for $38 billion (B1.2 trillion), and the rest are monetary measures taken by BOT. The large relief program together with a steep revenue compression will double the fiscal deficit to 5.3% of GDP and almost double the total financing needs for FY 2020 to $39.9 billion.

The government sought Asian Development Bank (ADB) support to cover the exceptional fiscal requirements in FY 2020.

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Thai Credit Guarantee Corporation (TCG) Will Launch Bad Debt Guarantee Program for SMEs

The program will also cover SME loans that have turned into non-performing loans (NPLs), defined as loans overdue by more than 90 days, although these NPLs must not exceed two years of overdue payment.

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BANGKOK (NNT) – State-owned Thai Credit Guarantee Corporation (TCG) is preparing to launch a 20-billion-baht bad debt guarantee program to assist struggling small and medium-sized enterprises (SMEs) saddled with bad debts.

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Banking

Can the Subscription Economy Save Financial Services?

Going back to the pre-Covid “normal” is not an option for financial services. Fortunately, the rise of the subscription economy points towards frontiers of untapped growth for the sector.

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As the world waits for mass vaccination to revive economic activity, general malaise has overtaken the financial services industry (FSI). And things will probably worsen before they get better: US banks are expected to suffer US$318 billion in net loan losses by the end of 2022, according to Deloitte.

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Banking

Asia Pacific Banks shrug off commercial property risks for now

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APAC commercial property prices were down around 3% on average in 2020, after a 1% rise in 2019. But the coronavirus-induced decline has been modest compared to past downturns, suggesting that the impact on banks’ commercial real estate loans will generally be much smaller this time.

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