The Thai cabinet on Tuesday approved borrowing to fund U.S. $58 billion in financial packages to help the health sector combat COVID-19 and to stabilize an economy that has reeled from knock-on effects of the pandemic.
A large portion of the packages, which total close to 2 trillion baht, will go into assisting businesses bounce back from the economic shock and into handing out subsidies to farmers – a major segment of the national workforce that has been hit hard during the crisis, officials said.
The Central Bank recently predicted that the country's economy could shrink by 5.3 percent this year because of the coronavirus, the worst since the 1997 financial crisis that rippled through the rest of Asia.
“Today, we announce that COVID-19 is our national agenda,” Prime Minister Prayuth Chan-o-cha said after presiding over a routine cabinet meeting.
“We would arrange for an emergency decree to be able to seek a 1 trillion baht loan. The first 600 billion baht is for public health concerns and the other 400 billion baht is to aid the economy,” Prayuth said without giving details on the loans except to say they could come from foreign sources.
In late March, the government asked 3 million citizens who do not work for the government and are not enrolled in social security to sign up for a remedy package. It would provide them with a 15,000 baht ($458) subsidy and an additional 10,000 baht ($305) loan. More than 20 million signed up within the first few days.
The original package, which did not list a specific amount to be spent, will be infused with an additional 400 billion baht ($12.2 billion), the government announced. In addition, the package increases the subsidy to 30,000 baht ($917) and will be extended to cover more people, including farmers, Finance Minister Uttama Savanayana said in a separate press conference on Tuesday.
He said the cabinet decided to pass another decree enabling the Bank of Thailand to use 900 billion baht ($27.5 billion) in funds to provide aid to established businesses.
“The decree would empower the Bank of Thailand to firstly, grant soft loans to aid small and medium entrepreneurs in the amount of 500 billion baht ($15.2 billion),” Uttama said.
The other 400 billion baht ($12.2 billion) would be used to provide a six-month moratorium for established firms who have bonds maturing in 2020 and 2021.
Prayuth and Uttama did not elaborate on when the decrees would take effect.
The two officials called on parliament to consider cutting spending by 80 billion baht ($2.4 billion) to 100 billion baht ($3 billion) across the board in this year’s budget to provide additional COVID-19 funding.
The cabinet decision was announced on the same day COVID-19 cases increased by 38 to 2,258 and deaths increased by one to 27 from Monday.
Globally, more than 80,700 people have died and at least 1.4 million have been infected, according to the latest data compiled by disease experts at Johns Hopkins University in the United States.
“I’m glad that the increment is less than last week,” said Dr. Taweesilp Wissanuyothin, the spokesman for the government’s center to fight COVID-19. At that time, the number of cases were increasing by more than 100 in a day.
Regional economic efforts
Throughout South and Southeast Asia, leaders have stepped up with financial assistance to aid their citizens who have seen their livelihoods crippled by COVID-19.
In Indonesia, the government has raised $4.3 billion through bonds “to fund its COVID-19 relief and recovery efforts,” including one for 50 years, Reuters news service reported on Tuesday.
The bond deal was finalized in the United States on Monday and includes a 10.5-year and 30.5-year bond of $1.65 billion each along with the 50-year bond for $1 billion.
On Sunday, Bangladesh Prime Minister Sheikh Hasina unveiled nearly $8 billion in additional financial aid to stimulate the nation’s economy where key industries including garment manufacturing have been battered by the pandemic. The additional stimulus brought to $8.5 billion Bangladesh’s overall COVID-19 economic stimulus package.
Meanwhile in Malaysia, the government on March 27 announced a stimulus package allocating $29.6 billion for public welfare, $23.1 billion to support businesses, and $460 million to bolster the economy under what it dubbed as “The People-Centric Economic Stimulus Package.” The government allocated another $2.3 billion on Monday to help small businesses.
Previously, the government granted a six-month delay on most loan payments, beginning on April 1, to ease economic suffering caused by COVID-19, according to the Central Bank.
In the Philippines, President Rodrigo Duterte late last month announced a $3.9 billion stimulus package, calling in the largest economic aid spending in Philippine history. Duterte said the money was to assist informal sector workers and people whose income has dried up amid a health crisis that has virtually shut down the country.
Days later, police arrested at least 20 people who were part of a protest group in Manila who took to the street to demand food and relief supplies. Later that day, Duterte, in a nationally televised address, ordered police to “shoot them dead” if protesters committed violent acts against officers.
Wilawan Watcharasakwet in Bangkok contributed to this report.
* Work from Home and START YOUR OWN blog site, business or personal website, or e-commerce store at www.mochahost.com