New relief measures to form six-month buffer

New relief measures to form six-month buffer

Size of third wave depends on cabinet

Deputy Prime Minister Somkid Jatusripitak
Deputy Prime Minister Somkid Jatusripitak

A fresh batch of relief measures for people and businesses affected by the outbreak, farmers and capital market stabilisation is set to go before the economic ministers' meeting today before being forwarded to the cabinet next Tuesday.

The government hopes the measures will suffice to buffer the economy over the next six months, said Deputy Prime Minister Somkid Jatusripitak.

The size of the third phase of measures rests on the cabinet's discretion, while the government plans to issue either a royal decree or an act to fund the new package, he said.

Finance Minister Uttama Savanayana said recently that the third-phase package would be larger than the first two combined to cushion against fallout from the coronavirus outbreak.

The Bank of Thailand last month unexpectedly downgraded the country's 2020 economic growth forecast to a 5.3% contraction from the 2.8% expansion predicted in December. The central bank estimated that the first two relief packages worth 400 billion baht in total would give a boost of 2-3% to the country's economy.

The government has launched a raft of measures to assist those ravaged by the virus spread and the government's attempts at containment. The measures include a 5,000-baht cash giveaway to 9 million informal workers for three months, soft loans and debt relief.

Mr Uttama said the new relief package is aimed at pushing businesses into moving forward.

The pandemic has taken a toll on people's income and spending, dampening companies' earnings and leading to job losses, he said. Taking care of liquidity in the local capital market is also needed.

The third phase aims to cover all population groups to ensure the country's financial health remains solid, then pave the way for future growth once the virus is contained, Mr Uttama said.

The finance minister said the new package will be funded by the fiscal 2020 budget and a royal decree on borrowing.

Chatchai Payuhanaveechai, president and chief executive of Government Savings Bank (GSB), said about 1 million borrowers of the bank's personal and housing loans with combined loans of 1.2 trillion baht qualify for a deferment of principal and interest for three months under the central bank's measures to ease the burden for virus-affected debtors.

The qualified borrowers account for 90% of the bank's debtors, he said, adding that the grace period is estimated to cost GSB 10 billion baht.

The bank would absorb the loss and has asked the Finance Ministry to take the loss into consideration when judging GSB's business performance, Mr Chatchai said.

The state-owned bank is offering the three-month grace period on principal and interest to all debtors who continue to service debt and have missed less than three months of payments as of the end of March.

GSB's personal loan and mortgage borrowers with a maximum outstanding balance of 3 million baht and SME borrowers with an outstanding balance of up to 20 million baht are entitled to deferred principal and interest payments from April to June.

The scheme is in line with the Bank of Thailand's guidelines on minimum financial assistance standards.

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