Prime Minister Srettha Thavisin vowed to address the debts of almost three million civil servants and stressed the necessity of lowering interest rates to help reduce their debt burden.
Speaking after a meeting with the heads of 11 state agencies to follow up on their attempts to tackle the debts of civil servants and state employees, Mr Srettha said on Friday the efforts over the past two months were showing positive results.
He said the government would continue its efforts to help relieve the public sector's debt burden, emphasising that the issue could lead to a national disaster if not addressed.
Mr Srettha, also the finance minister, said the heads of various state agencies requested that financial institutions lower interest rates to reduce the debt burden and make it more manageable for borrowers, but the Bank of Thailand remained firm on its stance.
He said he also asked the Cooperative Promotion Department (CPD) to join the government's debt solution programme as soon as possible as many civil servants and state employees owed large sums to the cooperatives of their organisations.
The prime minister said he would hold talks with the management of the Student Loan Fund (SLF) to discuss the possibility of reducing interest rates for defaulters who are charged 18% interest a year.
Pol Gen Kittirat Phanphet, deputy police chief who serves as deputy chair of the government committee on people's debts, told the meeting on Friday that out of 3.1 million civil servants, about 2.8 million collectively owe more than 3 trillion baht to the cooperatives of their organisations.
He said while these debtors do make payments, many are left with barely enough to cover their living expenses after servicing their debts.
They are in need of urgent assistance, he noted.
Pol Gen Kittirat said non-performing debts are increasing across all types of lending, noting that to solve the problem effectively, relevant laws will need to be amended to allow for proper debt negotiation and settlement.
Defence permanent secretary Gen Sanitchanok Sangkhachan told the meeting that the ministry has implemented several measures to help its personnel who face financial difficulties.