Millions will be discarded from the 5,000 baht handout; while public debt is set to increase to 58 per cent by the end of 2021

Millions will be discarded as the government estimates only around 14 million workers in the informal sector will receive the total of 15,000 baht for the three months between April and June.

Approximately 28.8 million people have registered for the 5,000 baht cash handout scheme as the online registration closed on Thursday, which means that 14.8 million people will not be eligible for the scheme – unless the government decides to increase the number of eligible people once again.

The government earlier estimated that 3 million people will receive the handout with a budget of 45 billion baht. Following the new estimation of eligible workers, the budget has now increased to 210 billion baht.  

The increased in estimation for eligible workers came after complaints from people who have been discarded from the scheme, as more than two million have filed for an online appeal. 

The online appeal channel will continue to stay open while officers from the Ministry of Finance visit those who have filed for an appeal to check the validity of their claims for the cash handout.  

The scheme now includes freelancers, such as street vendors, taxi drivers who are also registered as farmers, and students who are part time workers. About 4.2 million people have received the first 5,000 baht handout for April so far and more than 700,000 people will receive it this Friday.

However, farmers who have received money from this cash handout scheme will not be eligible for an economic relief package specifically for farmers that is expected to be introduced within the coming weeks, along with added supportive measures for businesses within the tourism sector.  

The government is now being more generous with their compensations and relief measures amid the coronavirus outbreak and the nationwide lockdown as citizens are complaining that they are not receiving enough help from the government. 

At the same, the number of new cases has decreased to 13 on Thursday as compared to around 100 per day before the State of Emergency was declared on March 26. However, with that comes pressure from businesses that want to resume activity as soon as possible.  

Another cause for the newfound generosity is that the one trillion baht emergency loan decree has now received a royal endorsement which means that they will have more money to help support the people during this crisis.

Public debt

The Public Debt Management Office said on Thursday that the office will propose to the cabinet for an increase in the budget for public debt to 1.49 trillion baht or 51.84 per cent of the gross domestic product.

About 890 billion is for the management of existing debt plus the first 600 billion baht loan under the one trillion baht emergency loan decree. The added 600 billion baht will send the public debt from the current 41.44 per cent to 51.84 per cent by the end of 2020, the office estimated. The remaining 400 billion will send the public debt to 57.69 per cent at the end of 2021, they added. 

The estimation for the public debt to ratio of 57.69 of the GDP at the end of 2021 is based on the projection that the country’s GDP will be able to expand by 3 per cent next year. The new estimation of about 58 per cent is still below the 60 per cent fiscal security ceiling, the public debt office added.

The office said that part of the first 600 billion baht of the emergency loan will go to the 5,000 handout scheme. The rest will be for measures to help farmers and measures to support the public healthcare sector. The remaining 400 billion baht will be added to the fiscal 2021 budget.

As for the first batch of the loan, it will come from domestic lenders in a form of promissory note worth 70 billion baht which will begin on April 29 with a maturity of four years at an interest rate of 0.97 per cent that was based on the Bangkok Interbank Offered Rate. 

Beside the promissory note, other financial tools that could be used to get the loan include short term and long term. The long term version is mostly different types of bonds, term loans and treasury bills. 

It will also include the introduction of savings bonds for retail investors at 100 billion baht which would take around one to two months to come out. In comparison, it is usually around 20-25 billion baht that comes out in the second half of each year.   

The emergency decree will allow the Ministry of Finance to receive the loan from both domestic and foreign lenders, but the public debt office said most of the loan will be from domestic lenders. 

About 80 per cent will be with domestic lenders and 20 per cent with foreign lenders which could mean either the World Bank or the Asian Development Bank.

However, they will also take into consideration the value for money and the liquidity situation within the financial markets to make sure that the loan will not create a shock within the market.

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