BoT keeps interest rate unchanged at 2.00 percent

Bank of Thailand’s Monetary Policy Committee secretary, Paiboon Kittisrikangwan.

The Bank of Thailand’s Monetary Policy Committee (MPC) last week agreed to maintain its policy rate unchanged at 2.00 percent, in line with market expectations.
MPC secretary, Paiboon Kittisrikangwan, announced that the Thai economy contracted in the first quarter of 2014 as political uncertainties weighed on domestic demand and tourism.
Moderate recovery in exports of goods could not compensate for falling domestic consumer demand. Following a significant reduction of political uncertainties, the economy should benefit from improving public and private spending.
A slow recovery in exports of goods and tourism, however, pose downside risks to growth. Meanwhile, inflationary pressure has edged higher.
The committee viewed that the economic recovery should pick up pace given reduced political uncertainties and a resumption of functioning public policy management.
More active fiscal policy and prevailing monetary policy accommodation should lend support to a sustained economic recovery.
He said the committee thus voted unanimously to maintain the policy rate at 2.00 percent per annum.
The MPC will closely monitor economic and financial developments and will pursue appropriate policies to ensure a sustained recovery as well as long-term financial stability. (MCOT)

Mega projects to be considered in early fiscal 2015

Army Chief and NCPO leader Gen Prayuth Chan-ocha.

The National Council for Peace and Order (NCPO) plans to consider implementing mega-transportation projects early in the 2015 fiscal year, starting this October 1, in order to boost the investment atmosphere in Thailand, said Army Chief and NCPO leader Gen Prayuth Chan-ocha.
Speaking during his pre-recorded weekly address and telecast late Friday, June 20, Gen Prayuth said details of mega-transportation projects, carried over from the previous defunct government, such as the planned extension of skytrain routes and construction of dual-rail tracks, have been furnished by the State Railway of Thailand and the Transport Ministry.
They will be considered by NCPO “soon,” said Gen Prayuth.
On the general Thai economy since May 22 - the day that NCPO seized power in the country - up until now, Gen Prayuth said it has started improving and this could be seen from investments, which are on the rise.
He cited a report issued earlier by the Federation of Thai Industries saying that the Thai Industries Sentiment Index in May rose to 85.1, which was the first increase in seven months.
The tourism industry has also begun to recover as more foreign tourists have started visiting the kingdom, he said.
On the government budget for fiscal 2015, which is set aside at Bt2.575 trillion, carrying a deficit of Bt250 billion, Gen Prayuth said the deficit would be slightly more than in the current 2014 fiscal year.
He said the deficit budget is necessary as it has to be in line with the current global economy and to “stimulate local economy” which could help increase the people’s income and improving livelihood.
“Global economy has not improved yet and it might affect Thailand’s economy. For example, export, investment and [domestic] consumption,” said Gen Prayuth, adding that the NCPO would monitor the country’s economy closely and it might consider increasing the state expenditure budget during the middle of the 2015 fiscal year, aimed at creating new jobs to further boost household income. (MCOT)

Thai listed companies rank top in ASEAN for corporate governance

The Thai Institute of Directors Association (IOD) stated June 19 that Thai listed companies were the corporate governance champions of ASEAN.
IOD president Bandid Nijathaworn said that the 2013/2014 ASEAN Corporate Governance Scorecard survey, which covered 529 companies, found that Thai listed companies posted the highest average score of 75.39, followed by those in Malaysia with 71.69 and Singapore with 71.68.
Four Thai listed companies are among the Top 10 and 18 Thai listed companies are among the Top 50.
On April 30, the 100 Thai listed companies with the highest market values had an average score of 75.39. Thai listed companies were ranked first for shareholders’ rights and fair treatment of shareholders compared with companies in Indonesia, Malaysia, the Philippines, Singapore and Vietnam.
Thai listed companies were ranked third for stakeholders’ roles, transparency and directors’ responsibilities.
Bandid said Thai listed companies had to improve in these areas to boost confidence among Thai and foreign investors and attract them. (MCOT)

AMLO, banks to increase scrutiny on accounts suspected of being related to money laundering

The National Council for Peace and Order has urged the Anti-Money Laundering Office (AMLO) and all banks to increase scrutiny of bank accounts suspected of being involved in money laundering, after finding that this method of money laundering has become more popular.
General Phaibun Khumchaya, head of judicial and legal affairs at the NCPO, met with representatives from the AMLO and banks last week to discuss the issue of money laundering. He explained that money from drug trafficking and gambling was being deposited into banks, while call-center gangs that utilize bank accounts have become increasingly numerous; there are as many as 324 bank accounts being investigated for connection with call-center gangs.
The NCPO asked that banks increase scrutiny of each account owner’s first transaction. Should the cash value exceed 2 million baht or should the transaction involve assets worth more than 5 million baht, the AMLO should be asked to step in and probe the account. Gen. Phaibun said that if the money laundering issue can be solved, Thailand’s international standing will improve and foreigners will have more confidence investing in Thailand. (NNT)

NCPO opts to cost-cutting measures to replace rice pledging scheme

The National Council for Peace and Order (NCPO) has asked for cooperation from vendors of agricultural factors to provide discounts to rice farmers, in an attempt to help the latter cut costs by at least 500 baht per rai. The measure has been devised to replace the now-abolished rice pledging program.
The decision was reached during last week’s meeting of the NCPO, the Thai Rice Millers Association, the Thai Rice Exporters Association, the Thai Rice Farmers Association, related government units, and the Committee on formulation of measures to boost rice production and marketing.
NCPO Deputy Head for Economic Affairs and chairman of the aforementioned committee, General Chatchai Sarigalya, said the meeting concluded that private operators would all join the mission to reduce rice production cost by at least 500 baht per rai. Currently farmers are spending approximately 4,000 baht per rai in their operation. To achieve the goal, vendors of fertilizers, pesticides, seeds, farming equipment and land owners have agreed to give discounts to rice farmers. At the same time, the Bank for Agriculture and Agricultural Cooperatives would provide low interest loans to rice farmers and would soon issue additional measures to take care of paddy prices.
Chairman of the Thai Rice Farmers Association, Wichian Puanglamjiak, meanwhile, requested that the cost-cutting measures should be separated for farmers in irrigated areas and non-irrigated areas. He said farmers in non-irrigated zones usually have higher operating costs and, therefore, should not share the same benefit as the other group.
Wichian also stated that the NCPO’s commitment to guarantee paddy prices at 8,000-9,000 baht per ton is acceptable to farmers for the moment. (NNT)

186 foreign firms set up in Thailand in during first-half of 2014

Pongpun Gearaviriyapun, director-general of the Business Development Department.

A total of 186 foreign enterprises with combined investment of about Bt7.4 billion were allowed to be set up in Thailand during the first six months this year, said Pongpun Gearaviriyapun, director-general of the Business Development Department.
The newly-established firms will employ about 1,990 Thais, said Pongpun.
Compared to the corresponding period of 2013, the number of foreign companies established rose by 5 percent but the investment funds were 30 percent less, she said. (MCOT)

ACM Prajin won’t quit as THAI board chairman

Thailand’s Air Force Chief, Air Chief Marshal Prajin Juntong, also deputy leader of the National Council for Peace and Order (NCPO), on Friday said that he would not resign as Thai Airways International (THAI) board chairman as he had said earlier.
He said he wanted to improve the business performance of the national flag carrier.
ACM Prajin is economic team leader for NCPO. He was appointed THAI board chairman in March this year.
NCPO decided recently to waive the benefits, including 10 free domestic and 10 free international flights annually for each board member, in an attempt to improve the airline’s business performance which has suffered from heavy losses for several years. The free flights perk for board members is now no longer valid.
THAI suffered a net loss of some Bt13 billion in 2013. Of the total losses, Bt3 billion was due to management problems while Bt5-6 billion resulted from foreign exchange losses.
As board members at a number of state enterprises are resigning from their posts, aimed at paving the way for NCPO to restructure offices including business performances, five of 16 THAI board members also tendered their resignations, effective immediately.
ACM Prajin told journalists after Friday’s board meeting that the rest of board members agreed that he is empowered to improve THAI business, therefore, he would continue to serve as the airline board chairman.
In another development, MCOT Public Co., Ltd. workers’ union submitted a letter to Panadda Diskul, deputy permanent secretary for Interior, voicing support for NCPO and to him personally as he oversees MCOT.
The workers union for MCOT, operator of Modernine TV and a number of radio and television stations in Thailand, urged Panadda, now also acting permanent secretary for the Office of the Prime Minister, to appoint a new set of board members who are efficient and knowledgeable, replacing current board members. Some members have already resigned.
The MCOT workers’ union also plan to submit a letter to NCPO leader Gen Prayuth Chan-ocha, army chief, requesting him to take action and to make MCOT the model in suppressing the malpractice prevailing at state enterprises. (MCOT)