The government will issue another 300 billion baht worth of long-term bonds to raise funds to repay debt incurred from the loss-ridden rice pledging scheme, the Social Security Fund (SSF) and the State Railway of Thailand (SRT).
Deputy Prime Minister MR Pridiyathorn Devakula said the bonds to be issued by the Finance Ministry would have 10-20 years of maturity, depending on economic prospects and demand for funding each year for the three troubled schemes. Total debt from the three projects is estimated at 800 billion baht.
MR Pridiyathorn said previous governments had not contributed to the SSF for three years, resulting in a shortfall of 50 billion baht. They also failed to allocate a budget to service the SRT's debt for 10 years, tallying up to 74 billion.
In a related development, the economic ministers’ meeting chaired by Prime Minister Prayut Chan-o-cha yesterday approved 2.72 trillion baht worth of expenditure to run a 390-billion-baht budget deficit in fiscal 2016. The budget framework is based on projected economic growth of 3.7% to 4%, with inflation of 1.2%.
“Gen Prayut insists all infrastructure projects should be ready for investment by fiscal 2016,” MR Pridiyathorn said.
In other news, Wiwan Boonyaprateeprat, secretary-general of the Thai Oil Palm and Palm Oil Association, said after a meeting of the National Oil Palm Policy Committee that his group agreed to map out a long-term strategic plan for the industry to stave off any price pledging.
The government this month agreed to double the volume of palm oil blended into diesel to absorb oversupply and shore up domestic palm oil prices, reversing a cut made at the start of the year.
In January, the government halved the proportion of palm-based B100 biodiesel for retail sales to 3.5% to spare the crude palm oil supply and prevent a shortage in the food industry at a time when domestic production was in seasonal decline. The policy reversal is estimated to increase the use of crude palm oil by 70,000 to 80,000 tonnes a day.
Also in January, the committee approved a plan to import 50,000 tonnes of crude palm oil to guard against a shortage of retail cooking oil on store shelves. Palm fruit production tumbles during the early dry season (December-February), when the weather reduces the crude palm oil stocks that supply the food and biofuel sectors.
Palm oil stocks stood at 150,000 tonnes last month, above the government’s target of 135,000 tonnes, after sliding to 110,000 tonnes in January.
