The total amount of emergency loans that will be used to counter the impact of COVID-19 is at 1 trillion baht, not 1.9 trillion baht, as the opposition has quoted in parliament, said the Thai government on Thursday.
The parliament started debates on four emergency decrees of which three are financial, including the Ministry of Finance’s 1 trillion baht emergency loan.
The other two financial decrees are the Bank of Thailand (BOT)’s soft loans worth 500 billion baht and the setup of the Corporate Bond Stabilisation Fund (BSF) worth 400 billion baht.
On Wednesday, BOT governor Veerathai Santiprabhob wrote on his Facebook that the two BOT decrees are not loans as the central bank will receive money back for the soft loans in two years. They will also get money back from the BSF once it’s matured.
“I insisted that the emergency decrees the BOT has proposed should not be called emergency loan decrees,” he said. “[Because] there is no fiscal or tax burden.”
He explained that the SMEs will have to return the soft loans.
The BSF is also a temporary bridge financing mechanism and the BOT is making sure that the corporate bonds the fund will be investing in are of good quality.
Minister of Finance Uttama Savanayana said on Wednesday that the 1 trillion baht loan accounted for 6 per cent of the GDP or 31 per cent of the government’s fiscal budget in 2020.
The amount is in keeping with previous loans taken out during past crises.
“The current amount of loans has not jumped up… because it is a loan that is being made during a time of crisis,” Uttama added.
The loan will push public debt to GDP to 57.96 per cent which is still lower than the 60 per cent security ceiling. The public debt to public income ratio will also be pushed to 21.2 per cent, lower than the 35 per cent security ceiling, according to Uttama.
“We are concerned about the public debt to GDP and we admit that there are some delays [in providing financial aid] but this situation is unprecedented. Nevertheless, we are willing to listen to all sides,” he said.
Government spokesperson Naruemon Pinyosinwat said on Tuesday that the government will make sure that the disbursement of the 1 trillion baht loan will be transparent with the help of technology.
