New type of bond may help extended Thai rice subsidy debt payment

[webfact]

BOND
New type of bond may help extended rice subsidy debt payment
The Nation

BANGKOK: -- Deputy Prime Minister Pridiyathorn Devakula likes the idea of stretching out repayment of the Bt700-billion rice-pledging debt, possibly through issuing a revolutionary type of savings bond, to free up scarce funds for public infrastructure projects.

"Pridiyathorn has asked the Public Debt Management Office to study whether savings bonds can be issued with maturities longer than 10 years, possibly 30. It would also be a new savings alternative for people," a Finance Ministry source said yesterday. That would also ease the burden on the budget, the source said.

According to the government's September 17 policy assignment to state agencies, Pridiyathorn has asked the PDMO to extend repayment of the rice-pledging scheme's Bt700-billion debt to 30 years.

Currently, the debt is required to be settled within five years.

The government plans to use the budget required for the debt repayment for the Bt2.4-trillion infrastructure project instead.

Pridiyathorn wants to offer savings bonds so that the interest the government has to pay will fall into people's hands. The bonds may be issued regularly, following the debt-repayment schedule.

The savings bonds could be issued in maturities of 10, 15 and 30 years in anticipation of people's responses. The PDMO has launched 10-year savings bonds before and the issue was quickly sold out.

The PDMO usually targets a combination of retail, big and institutional investors, as sales to small investors normally incur higher distribution costs than to big investors.

The office is also waiting for the final net loss figure from the rice-pledging account and the Commerce Ministry's rice-sales plan. The committee in charge of closing the account will hold a meeting late this month.

Luck Wajananawat, president of the Bank for Agriculture and Agricultural Cooperatives, said the borrowing plan for restructuring of the rice-subsidy debt would be proposed to the board meeting chaired by Finance Minister Sommai Phasee late this month.

The debt of about Bt100 billion will come due in fiscal 2015.

"We are waiting for the results of the PDMO's study on extending the rice-pledging debt.

"Money for debt repayment will come from rice sales and the state budget. If the repayment period can be extended, that would ease pressure on the state budget compared with having to repay it in five years," Luck said.

In fiscal 2015, a Bt71.3-billion budget is set aside for servicing the rice-pledging debt, while about Bt60 billion is expected to be realised from rice sales to help pay down the debt.

Source: http://www.nationmultimedia.com/business/New-type-of-bond-may-help-extended-rice-subsidy-de-30243615.html


-- The Nation 2014-09-19

[ezzra]

Yeap, keep throwing good money after bad, give a man fish a day and he has a fish for one day,

teach the farmer who to be self reliance, resourceful and self sufficient and stop relying on never

ending government hand outs and you have a happy, contended farmer for life..

[ramrod711]

So now the public could be paying off PTPs disastrous rice scheme debts for 30 years, thank you Thaksin, thank you 3 times Yingluck. For those of you who voted for PTP, I hope you didn't spend the entire 500 baht, looks like you're going to need it.

[cloudhopper]

Hmmmm wonder where all that money to buy the new debt issues comes from....hmmmm

Government debt is code for money printing.

[kimamey]

Yeap, keep throwing good money after bad, give a man fish a day and he has a fish for one day,

teach the farmer who to be self reliance, resourceful and self sufficient and stop relying on never

ending government hand outs and you have a happy, contended farmer for life..

I don't think this is giving handouts but paying back the money already given. They don't have much choice with that as far as I can see. Even if PTP were still in power and stopped the rice scheme the debt would still be there.

[halloween]

As this is such a great investment opportunity, I expect the Shinawatras will take the whole issue.

[halloween]

Yeap, keep throwing good money after bad, give a man fish a day and he has a fish for one day,

teach the farmer who to be self reliance, resourceful and self sufficient and stop relying on never

ending government hand outs and you have a happy, contended farmer for life..

Give a man a fish and teach him religion, and he will starve to death while praying for another.

[dinger]

Perfect ecuuse for more and more money to go missing. As long as this issue is still open all that has to be said. "oh that missing money , that was part of the rice scheme" They can't even decide how much money they are talking about so how in the heck will they know when it has been repaid?

[JoePai]

As this is such a great investment opportunity, I expect the Shinawatras will take the whole issue.

Depending on the rate of the coupon it may well be a good way to earn more than leaving the money in the bank

[halloween]

Why don't they call them TATTY bonds (Thanks a Trillion Times Yingluk) as a nice reminder of the debt plus interest she left the Thai people.

[halloween]

As this is such a great investment opportunity, I expect the Shinawatras will take the whole issue.

Depending on the rate of the coupon it may well be a good way to earn more than leaving the money in the bank

Your sarcasm meter needs recalibrating.

[billd766]

Yeap, keep throwing good money after bad, give a man fish a day and he has a fish for one day,

teach the farmer who to be self reliance, resourceful and self sufficient and stop relying on never

ending government hand outs and you have a happy, contended farmer for life..

How and who do you think that the PTP was going to pay that THEY incurred to the country?

At least the general is trying to pay off the debt that was INHERITED from the PTP.

The PTP didn't even pay the farmers what they owed them for months let alone repay the debt to the country.

[JacChang]

Let's just make it 100 years.

That's how they fix problems anyways.

And make all the debt of the poor to 50 years, that will solve everyone's problems. How smart.

[waynethor]

A bond with a 30-year maturity period? In my experience Thais generally don't think a week into the future, let alone 30 years.

If they want people to tie their money up for that long, the bond better be paying a very high percentage rate. Also, the people who have accumulated extra cash to invest in that type of bond likely don't see themselves still alive in 30 years, so not much incentive unless they plan to will it to their children.

[rickirs]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

Yeap, keep throwing good money after bad, give a man fish a day and he has a fish for one day,

teach the farmer who to be self reliance, resourceful and self sufficient and stop relying on never

ending government hand outs and you have a happy, contended farmer for life..

How and who do you think that the PTP was going to pay that THEY incurred to the country?

At least the general is trying to pay off the debt that was INHERITED from the PTP.

The PTP didn't even pay the farmers what they owed them for months let alone repay the debt to the country.

The PTP was prevented by the Constitution from borrowing the funds to pay the farmers once the government was dissolved in September 2013 for new elections. The EC denied the Interim government from borrowing the funds as unconstitutional, the Government Savings Bank refused saying it didn't have the equity (was actually overcapitalized), and 3rd party banks refused because of threats of business disruption by the PDRC. But the Junta was not so constrained after it suspended the Constitution and unilaterally borrowed all the funds.

[Thai at Heart]

So now the public could be paying off PTPs disastrous rice scheme debts for 30 years, thank you Thaksin, thank you 3 times Yingluck. For those of you who voted for PTP, I hope you didn't spend the entire 500 baht, looks like you're going to need it.

Well at the moment they are paying it off in 5

[rubl]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

Yeap, keep throwing good money after bad, give a man fish a day and he has a fish for one day,

teach the farmer who to be self reliance, resourceful and self sufficient and stop relying on never

ending government hand outs and you have a happy, contended farmer for life..

How and who do you think that the PTP was going to pay that THEY incurred to the country?

At least the general is trying to pay off the debt that was INHERITED from the PTP.

The PTP didn't even pay the farmers what they owed them for months let alone repay the debt to the country.

The PTP was prevented by the Constitution from borrowing the funds to pay the farmers once the government was dissolved in September 2013 for new elections. The EC denied the Interim government from borrowing the funds as unconstitutional, the Government Savings Bank refused saying it didn't have the equity (was actually overcapitalized), and 3rd party banks refused because of threats of business disruption by the PDRC. But the Junta was not so constrained after it suspended the Constitution and unilaterally borrowed all the funds.

You really don't like the truth, do you?

Not the Pheu Thai, but the caretaker Yingluck government couldn't borrow additional funds as they were caretaking only.

In mid-2013 PM Yingluck had stated that 270 billion Baht was needed for the 2013/2014 RPPS and financing was arranged. No additional borrowing required, no provision in the Nation Budget required.

With the 'caretaker' status of the government and the knowledge of non-revolving funds already extended to 700 billion Baht, all outside the Nation Budgets of the last three periods (things started 2011-10-07), even without pressure local banks were reluctant to loan the caretaker government money especially as the caretaker government was desperately looking to finance what they had told to have completely under control before.

The Junta just borrowed a hundred billion or so. Furthermore they also put repayment in the Nation Budget for all to see. A single line with a total on repayment and interest 107 billion Baht. For seven years.

The two double track 160km/h rail links cost about the same, spread over seven years, with each year a portion incorporated in the National Budget. Thank you, PM Yingluck, for this negligence.

PS PM Yingluck dissolved the House on the ninth of December 2013, at least in my universe

Edited September 19, 2014 by rubl

[sfokevin]

Could these bonds be used for the 800k retirement visa extension?...