Thai People Spending Beyond Their Means: Report

[webfact]

NESDB REPORT

People 'spending beyond their means'

Suriyan Panyawai

The Nation

Thailand's happiness index very low, with 1.5m people facing depression

BANGKOK: -- Non-performing personal loans have soared to more than Bt56.5 billion in the third quarter of this year, the National Economic and Social Development Board (NESDB) said recently.

This amount accounts for 21.4 per cent of the outstanding non-performing loans of all financial institutions.

"A number of people have been spending beyond their means," NESDB deputy secretary-general Suwannee Khamman said yesterday, adding that one of the factors behind this overspending was the government's policy to offer tax rebates to first-time car buyers.

According to her, the number of personal loans taken to purchase vehicles has jumped by 33.6 per cent between July and September when compared to the same period last year, while the number of loans taken for new homes has soared by 10.3 per cent. Loans taken for other types of products/services have also risen by 30.3 per cent.

"We have to closely watch the spending behaviour of low- and middle-income earners," Suwannee said, adding that even though the significant hike in the daily minimum wage had not hurt the rate of employment, many employers were cutting down on the number of paid working hours.

According to NESDB, more than 6.1 million people now work less than 35 hours a week and many in this group are unskilled labourers who want to work more hours for better pay.

Suwannee said that while the minimum daily wage had soared significantly, in actual terms it had only increased by 10 per cent because the price of basic necessities had also risen.

She was speaking after the NESDB released a report on Thailand's social outlook in the third quarter of this year.

Also according to the Public Health Ministry, some 1.5 million Thai citizens aged 15 and above are suffering from depression. This has become a concern because it is a leading cause of suicides and is affecting the society and economy adversely. Overall, Thai people's gross happiness index has been dropping in the face of the rising cost of living, political conflicts and natural disasters.

Suwannee said research had found that most underage youth were able to purchase cigarettes easily, and about 80 per cent of young people surveyed said neighbourhood shops freely sold smokes to youngsters.

Another study has found that domestic violence exists in 36.6 per cent of families that have at least one member who drinks heavily.

"Statistics have also suggested that about a fourth of the arrested drug suspects are first-time offenders and most of the people arrested on drug-related charges are young people," she said.

Unpaid bills

_ Overspending sees defaults rise in the third quarter.

_ Households' overdue payments (more than three months late) jump by 37.8%

_ Overdue payments to credit-card companies (more than three months late) rise by 11.1%

_ Non-performing personal loans stood at Bt56.5 billion, which accounts for 21.4 per cent of outstanding non-performing loans of all financial institutions.

Source: National Economic and Social Development Board

-- The Nation 2012-11- 27

[kurnell]

How does this compare to 1997?

[Notstupid30]

But hasn't that been the case always here in LOS ..

[Sing_Sling]

I'm surprised that this comes as a . . . surprise. Does anyone really believe that Somchai on 2k/month can afford a new Hilux? Could ever afford a new Hilux?

Ah, banks and guarantees/sureties are a marvel

[Moruya]

And this doesn't include loan sharks....

[nev]

I'm surprised that this comes as a . . . surprise. Does anyone really believe that Somchai on 2k/month can afford a new Hilux? Could ever afford a new Hilux?

Ah, banks and guarantees/sureties are a marvel

Agree thai's are renowned for getting someone to go as guarantor and leaving the debt to them.

[robblok]

I wonder if they have taken into account the fact that there are more loans now because of the first cars and other things. This might lead to more actual unpaid debts, but procentual it might not have soared.

For instance if they say the for instance if there were first 10 unpaid loans and now 20 unpaid loans there is a 100% increase. However if the number of loans have gone up from 100 to a 1000 there is actually a decrease in the percentage of loans that are unpaid.

So id like to know how they calculated this, id love to join the guys saying the Thais are overspending and imminent doom looms and the bath is going to drop (love too). But the fact is the economy is booming growing at a rate the EU or US can only dream of. But if it is really calculated correctly then yes things could go really wrong, i too have often wondered how many Thais can have all those new cars. I personally know of family members using a large chunk of their income for their car. Much more as i would think is reasonable, but they just have other priorities.

[anon210]

Well, this seems to confirm that Thailand is not the "Land of Smiles" but the "Land of Tears".

For all the hypocrisy and false appearances and "saving face" culture cannot hide the crisis coming up when you are left with yourself to face who you really are.

Consumerism always ends up in despair - and I believe Westerners have learned that a long while ago. And unlike many foreigners, I do not see Buddhism as providing an answer to this, as most Thais seem unaware of the effort of renunciation that goes with that life ethic. Renunciation and giving up desires is the first step on being contented with your life... How is that possible in a perpetual "keeping up with the Jones" society, and one where even Buddhism is become an instrument of consumption (look at the ready-made baskets of "gift" to monks in any supermarket)?

In short, Thailand is fast coming to face its own contradictions.

[rubl]

"People 'spending beyond their means'"

I have been told by Thai that there is no such thing as 'spending beyond means', it's only a matter of 'making use of credit offered'

[macksview]

the easy credit bubble is about to burst, a question for the old TV hands,has thailand always had such a easy time to get credit?

the only thais i know who regulary borrow finance,are government employees and their access to borrow money seems almost inexhaustible,i would hate to be as "hocked" up as them.

[anon210]

the easy credit bubble is about to burst, a question for the old TV hands,has thailand always had such a easy time to get credit?

the only thais i know who regulary borrow finance,are government employees and their access to borrow money seems almost inexhaustible,i would hate to be as "hocked" up as them.

It all boils down to whether the lending is commensurate to the reimbursement capacities of the person borrowing. If not, then there is trouble. Of course, in a country where saving is a notion only known to the most wealthy, then it spells trouble, as the lack of social coverage makes any "accident" of life a real drama. A downturn in the thai economy is certain to burst the bubble. And it could come about so quickly, nobody will see that happening.

[KED]

Don't forget that not all debt is material consumption - I have a few good friends who are massively in debt because a parent had medical bills which they borrowed from friends to pay - and in most cases, the parent then passed away and the thai child then assumed more debt for the funeral expenses - a vicious circle.

[Colabamumbai]

I wonder if they have taken into account the fact that there are more loans now because of the first cars and other things. This might lead to more actual unpaid debts, but procentual it might not have soared.

For instance if they say the for instance if there were first 10 unpaid loans and now 20 unpaid loans there is a 100% increase. However if the number of loans have gone up from 100 to a 1000 there is actually a decrease in the percentage of loans that are unpaid.

So id like to know how they calculated this, id love to join the guys saying the Thais are overspending and imminent doom looms and the bath is going to drop (love too). But the fact is the economy is booming growing at a rate the EU or US can only dream of. But if it is really calculated correctly then yes things could go really wrong, i too have often wondered how many Thais can have all those new cars. I personally know of family members using a large chunk of their income for their car. Much more as i would think is reasonable, but they just have other priorities.

Having new car and saving face. How do you explain to someone you love that if they have a saalary of 20,000 Baht a month, they cannot pay 13,000Baht for a new vechile. (yes I know they say that I should buy it for them, that I am too cheap, that they will find a man who will pay for everything), meanwhile you take the care today dear, I do not want those Thai people thinking that you cannot afford to buy a car and that you drive an old motorcycle and have to try to work here in Thailand. until you get your pension and maybe even then after, because you are not rich and we do not really want you here.

[ratcatcher]

I wonder if they have taken into account the fact that there are more loans now because of the first cars and other things. This might lead to more actual unpaid debts, but procentual it might not have soared.

For instance if they say the for instance if there were first 10 unpaid loans and now 20 unpaid loans there is a 100% increase. However if the number of loans have gone up from 100 to a 1000 there is actually a decrease in the percentage of loans that are unpaid.

So id like to know how they calculated this, id love to join the guys saying the Thais are overspending and imminent doom looms and the bath is going to drop (love too). But the fact is the economy is booming growing at a rate the EU or US can only dream of. But if it is really calculated correctly then yes things could go really wrong, i too have often wondered how many Thais can have all those new cars. I personally know of family members using a large chunk of their income for their car. Much more as i would think is reasonable, but they just have other priorities.

Having new car and saving face. How do you explain to someone you love that if they have a saalary of 20,000 Baht a month, they cannot pay 13,000Baht for a new vechile. (yes I know they say that I should buy it for them, that I am too cheap, that they will find a man who will pay for everything), meanwhile you take the care today dear, I do not want those Thai people thinking that you cannot afford to buy a car and that you drive an old motorcycle and have to try to work here in Thailand. until you get your pension and maybe even then after, because you are not rich and we do not really want you here.

Good post, a familiar story. Stick with what you can afford (motorbike or not), trade in the girlfriend. (Fish in the sea - lots of them.)

[Colabamumbai]

The girlfriend is a prime example she has a salary of 20,000Baht a month. The 12,000 I have being giving her is now not enough. She cannot pay her bank loan, because she does not take it from the 12,000Baht. She did not pay her electric bill 1,700 Baht, they took the meter. She yelled at me for not reminding her when the bill normally came and complains she has to go town to pay it 30 kms. oh! but now she can pay by bank transfer. And are you going to pay for this and this also. Plus the normal things I buy every month another few thousand Baht.

The 12,000 that I give her would pay all her bills every month if she took that money and paid them instead of just throwing it in her purse and then having nothing at the end of the month. She thinks money is love and who will give her more is giving her love. So she wants a man now with unlimited income to come and support her.... any offers out there....

[Tatsujin]

. . . and here it comes . . . all those stupid "populist" policies will now come back (over time) and bite everyone in the ass . . .

[rotorbreeze]

I'm surprised that this comes as a . . . surprise. Does anyone really believe that Somchai on 2k/month can afford a new Hilux? Could ever afford a new Hilux?

Ah, banks and guarantees/sureties are a marvel

I recently joined a sports club here in Pattaya and noticed new staff from California club whom did not any compensation on sudden closure nor did any of the patriots whom have life long membership..to note a young newly hired X California staff that works in gym showed off his new purchased/financed motor bike, a normal loan for scooter would be affordable to most staff..have seen new models and proud staff owners...this fellow bought a NEW Kawasaki 1000cc...I was amazed this young fellow (28) just bought it...later I asked him while in gym what he paid...his reply.." It is what I wanted" finding out later he paid some 600K baht $20K...does not drive it in rain..as he waits till it stops...What amazes me is HOW did he get finance?...parent guarantee the loan? How long will he be paying and how much of his income goes towards this TOY? I know reality will surface showing narcissus way of showing how he plundered into buying beyond his means and the loan shark/bank will repossess his dream bike, similar to Impulse buying...we as frangs have all gone through this impulse in our early year..now old we seem to have the impulse in the local girlie bars..that is ok...it is a rental not ownership of up keep!

Take care and keep your impulses to the bars not to material items beyond our means..Ron

[Arkady]

This is excellent news because it means that Thailand is finally on the way to creating a consumer economy like the US instead of relying on sweatshop export industries. It should mean a few years more years of rapid growth before the whole thing blows up in an explosion of consumer and government debt.

Gone are the days of the high private sector savings rates due to the thrifty Thai Chinese population working hard and saving for their kids' education. Welcome to the era of those kids now grown up with a devil may care attitude, driving their fast cars wired on coke and killing policemen and bisecting Burmese maids who happen to get in their way.

[markt7081]

I'm surprised that this comes as a . . . surprise. Does anyone really believe that Somchai on 2k/month can afford a new Hilux? Could ever afford a new Hilux?

Ah, banks and guarantees/sureties are a marvel

I recently joined a sports club here in Pattaya and noticed new staff from California club whom did not any compensation on sudden closure nor did any of the patriots whom have life long membership..to note a young newly hired X California staff that works in gym showed off his new purchased/financed motor bike, a normal loan for scooter would be affordable to most staff..have seen new models and proud staff owners...this fellow bought a NEW Kawasaki 1000cc...I was amazed this young fellow (28) just bought it...later I asked him while in gym what he paid...his reply.." It is what I wanted" finding out later he paid some 600K baht $20K...does not drive it in rain..as he waits till it stops...What amazes me is HOW did he get finance?...parent guarantee the loan? How long will he be paying and how much of his income goes towards this TOY? I know reality will surface showing narcissus way of showing how he plundered into buying beyond his means and the loan shark/bank will repossess his dream bike, similar to Impulse buying...we as frangs have all gone through this impulse in our early year..now old we seem to have the impulse in the local girlie bars..that is ok...it is a rental not ownership of up keep!

Take care and keep your impulses to the bars not to material items beyond our means..Ron

Maybe treat both desired items the same, Take them for a test ride & then return em.

[zyphodb]

What I've heard here in Issen is, that if you have a small Family Farm the Banks will give you a loan for that new Pick-Up that you have to have & take your Farm as a Guarantee, so in 5 - 10 years time you've lost your farm as your'e unabled to keep up with your payments, & your Pick-up has rusted away so you are left with no means of earning a living & no transport. The Banks & the rich who control them are happy to have your land & the poor become poorer & are easy targets for low wage slavery by the same rich... Sounds about right for Thailand I'm afraid...

[TommoPhysicist]

The girlfriend is a prime example she has a salary of 20,000Baht a month. The 12,000 I have being giving her is now not enough. She cannot pay her bank loan, because she does not take it from the 12,000Baht. She did not pay her electric bill 1,700 Baht, they took the meter. She yelled at me for not reminding her when the bill normally came and complains she has to go town to pay it 30 kms. oh! but now she can pay by bank transfer. And are you going to pay for this and this also. Plus the normal things I buy every month another few thousand Baht.

The 12,000 that I give her would pay all her bills every month if she took that money and paid them instead of just throwing it in her purse and then having nothing at the end of the month. She thinks money is love and who will give her more is giving her love. So she wants a man now with unlimited income to come and support her.... any offers out there....

Tell us again ......

Why are you giving your gf money?

[Pimay1]

The girlfriend is a prime example she has a salary of 20,000Baht a month. The 12,000 I have being giving her is now not enough. She cannot pay her bank loan, because she does not take it from the 12,000Baht. She did not pay her electric bill 1,700 Baht, they took the meter. She yelled at me for not reminding her when the bill normally came and complains she has to go town to pay it 30 kms. oh! but now she can pay by bank transfer. And are you going to pay for this and this also. Plus the normal things I buy every month another few thousand Baht.

The 12,000 that I give her would pay all her bills every month if she took that money and paid them instead of just throwing it in her purse and then having nothing at the end of the month. She thinks money is love and who will give her more is giving her love. So she wants a man now with unlimited income to come and support her.... any offers out there....

Perhaps you made a typo. Is it possibly your ex-gf?

[TechnikaIII]

The girlfriend is a prime example she has a salary of 20,000Baht a month. The 12,000 I have being giving her is now not enough. She cannot pay her bank loan, because she does not take it from the 12,000Baht. She did not pay her electric bill 1,700 Baht, they took the meter. She yelled at me for not reminding her when the bill normally came and complains she has to go town to pay it 30 kms. oh! but now she can pay by bank transfer. And are you going to pay for this and this also. Plus the normal things I buy every month another few thousand Baht.

The 12,000 that I give her would pay all her bills every month if she took that money and paid them instead of just throwing it in her purse and then having nothing at the end of the month. She thinks money is love and who will give her more is giving her love. So she wants a man now with unlimited income to come and support her.... any offers out there....

..... sorry, but no thanks. I've already had a brief encounter with one of those. Already with 30,000 takings from her hairdressing, she insisted that if we marry and live in the house her father built for her, I should simply give her 20,000 a month, no questions asked. She was paying down a new Toyota ... and ..(need I say any more).

Spend fast, drive fast, and shop for idiot farang at similar speed.

[anon210]

Back on track guys... We are not talking about BG or similar farang-sucking girls. We are talking about the majority of the population keeping to themselves and who are regular consumers.

Credit cards and other companies are all very keen on getting their customers to spend more and more. There is a profusion of 0% over 10 months offers, especially for purchasing electronics. That is also one of the reasons why everyone can have an Iwhatever... There is clearly a subsidy on credit here, which makes it cheap and easy to get into impulse buying (no matter what the difficulties thereafter to juggle credit debts and daily life's surprises.

Add to that no real savings culture and you have the recipe for disaster.

[Jimjim]

Thais just trying to catch up with the destructive consumer culture of us Americans!

[Tatsujin]

The girlfriend is a prime example she has a salary of 20,000Baht a month. The 12,000 I have being giving her is now not enough. She cannot pay her bank loan, because she does not take it from the 12,000Baht. She did not pay her electric bill 1,700 Baht, they took the meter. She yelled at me for not reminding her when the bill normally came and complains she has to go town to pay it 30 kms. oh! but now she can pay by bank transfer. And are you going to pay for this and this also. Plus the normal things I buy every month another few thousand Baht.

The 12,000 that I give her would pay all her bills every month if she took that money and paid them instead of just throwing it in her purse and then having nothing at the end of the month. She thinks money is love and who will give her more is giving her love. So she wants a man now with unlimited income to come and support her.... any offers out there....

Perhaps you made a typo. Is it possibly your ex-gf?

She'd definitely be an "ex" if it was me . . . but then I probably wouldn't be with someone like that in the first place. Ground rules, from day 1. Simple.

[Markaew]

"People 'spending beyond their means'"

I have been told by Thai that there is no such thing as 'spending beyond means', it's only a matter of 'making use of credit offered'

And how much they can borrow from other people and not pay it back.

[Markaew]

The girlfriend is a prime example she has a salary of 20,000Baht a month. The 12,000 I have being giving her is now not enough. She cannot pay her bank loan, because she does not take it from the 12,000Baht. She did not pay her electric bill 1,700 Baht, they took the meter. She yelled at me for not reminding her when the bill normally came and complains she has to go town to pay it 30 kms. oh! but now she can pay by bank transfer. And are you going to pay for this and this also. Plus the normal things I buy every month another few thousand Baht.

The 12,000 that I give her would pay all her bills every month if she took that money and paid them instead of just throwing it in her purse and then having nothing at the end of the month. She thinks money is love and who will give her more is giving her love. So she wants a man now with unlimited income to come and support her.... any offers out there....

It doesn't matter how much you give your Thai wife/gf. She will spend it all and need more.

Edited November 27, 2012 by Markaew

[rubl]

I've been led to believe that 'taking care of bills' means 'keeping them in a safe place'

[Tatsujin]

The girlfriend is a prime example she has a salary of 20,000Baht a month. The 12,000 I have being giving her is now not enough. She cannot pay her bank loan, because she does not take it from the 12,000Baht. She did not pay her electric bill 1,700 Baht, they took the meter. She yelled at me for not reminding her when the bill normally came and complains she has to go town to pay it 30 kms. oh! but now she can pay by bank transfer. And are you going to pay for this and this also. Plus the normal things I buy every month another few thousand Baht.

The 12,000 that I give her would pay all her bills every month if she took that money and paid them instead of just throwing it in her purse and then having nothing at the end of the month. She thinks money is love and who will give her more is giving her love. So she wants a man now with unlimited income to come and support her.... any offers out there....

It doesn't matter how much you give your Thai wife/gf. She will spend it all and need more.

Yes . . . if you let her . . . from the sounds of some of you guys, I'd marry you . . . I'd have a great easy life!