May 11, 2020 Thai Enquirer Summary Economic News • the Federation Of
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May 11, 2020 Thai Enquirer Summary Economic News The Federation of Thai Industries (FTI) chairman Supant Mongkolsuthree reportedly sought a meeting with Deputy Prime Minister Somkid Jatusripitak to address temporary closures of hotels due to the COVID-19 crisis. The FTI chairman has proposed the government to set up a working committee comprising members from various sectors to address hotel closures amid further concerns that the pandemic may force some operators to sell off their assets to foreign investors at a cheap price. Mr Suphant said once given the greenlight the committee will hold talks with the Thai Hotels Association (THA) to assist small and medium-sized enterprises (SMEs) with no more than 200 rooms and discuss the idea of setting up an equity fund to allow interested parties to buy stakes in struggling hotel businesses. According to THA’s statistics, 27 hotel operators in Bangkok decided to temporarily shut their doors since the Covid-19 outbreak while 52 hotels in Phuket continue to announce temporary shutdown from May to October. The 2020 tourism revenue is poised to decline by 59% as a result of the COVID-19 pandemic, according to Tourism and Sports Minister Pipat Ratchakitprakan admitted. The decline is a result of a drop in the number of foreign tourists visiting Thailand. The Ministry estimated Thailand will receive merely 18 million international tourists this year, generating around 828 billion baht in tourism revenue. The figures contrast to the Tourism Authority of Thailand (TAT)’s projection of more than 40 million tourists, as the highest number of international tourists Thailand might achieve this year. The TAT forecast a 4% growth in domestic tourist travel as it has set a target of 172 million domestic trips, generating around 1.13 trillion baht in revenue this year whilst the foreign market down sharply. The TAT predicted 40.78 million foreign arrivals for the full year, up 2.5% from last year, generating 20.3 trillion baht. The Finance Ministry website for the online registration for the 5,000 baht cash handout scheme is due to close today (May 11), with the total number of people qualified for the program standing at 13.9 million so far. The Ministry pledged to complete the revision of more than 1 million applicants who were rejected for the 5,000-baht cash handout by May 17 while it is planning to transfer money to additional 2.4 million people this week. As the COVID-19 situation in Thailand continues to improve, Prime Minister General Prayuth Chan o-cha will chair a meeting on May 15 to finalise businesses and venues that will be reopened in the second phase of restriction ease. A test run on the reopening of shopping malls and department stores will be conducted during May 14-15. The 2nd phase of easing restrictions is set to take effect which include the reopening of bigger premises such as shopping malls and departmental stores on May 17. Consumer confidence slumped to a 21-year low in April as the public remained worried about the poor economy, unemployment and future income because of the COVID-19 pandemic, according to a survey by the University of the Thai Chamber of Commerce (UTCC). The consumer confidence index (CCI) fell to 47.2 last month from 50.3 in March, the 14th straight monthly decline and the lowest level since October 1999. Thanavath Phonvichai, director of the UTCC’s Centre for Economic and Business Forecasting, said economic conditions are at a critical level and consumer spending is unlikely to recover for at least 3-6 months until the pandemic is under control, all business sectors are allowed to reopen and the government’s stimulus measures produce concrete results for the economy. The lower confidence stems from consumers’ expectation that the economy will fall into a depression. The UTCC warned that the pandemic will cause damage of up to 1.5 trillion baht in the first half of the year, including 700 billion baht in lost tourism revenue, 300 billion baht from lower private consumption and the rest from lower exports and border trade. Mr Thanavath said the recent easing of measures for certain businesses by the government is estimated to result in up to 3 billion baht in additional spending per day. The opposition to pumping in 80-200 billion baht into the troubled Thai Airways International Plc (THAI) has been growing with the media and the public all coming out to say that the national airline should be allowed to go under. The move was also supported by 2 of the main coalition partners of the incumbent coalition – Bhumjai Thai and Democrat party. Members of both Bhumjai Thai and Democrat party (Anuthin Charnvirakul, Saksayam Chidchob both of Bhumjai Thai party and Democrat party’s Thavorn Senniam) went to meet Prime Minister Prayut Chan-o-cha to tell him about their decision to let the airline go under. They said that the rehabilitation plan of Deputy Prime Minister Somkid Jatusripitak, was flawed as it would require injection of close to 200 billion baht of funds from the state This they said could go higher and it may not have much of an impact on the trimming of the excess number of employees. The airline has 21,323 full time employees The plan is to have 20% of the employees go but that would require 8.85 billion baht in compensation and they would be laid- off over a period of 3-years The 21,323 employees does not include the nearly 8,000 employees that are under contract Meanwhile Thai Airways International (THAI) workers’ union proposed to Prime Minister Prayut Chan-o-cha to scrap THAI Smile Airways amid grave financial troubles at the national carrier. During a meeting with Gen Prayut on May 8, the THAI workers’ union voiced opposition to any rehabilitation measures that would strip the government of its major shares in the airline, paying the way for the airline to become a privately- owned company. In its statement, THAI union addressed its concern about a possible interference from outsiders over the government’s bailout plan may cover plans to reduce the Ministry of Finance’s shares from the current 51% to 48%. THAI union president Nares Peung-yaem also asked the government to allow it to have a say in the new rehabilitation process. Labour Minister MR Chatumongol Sonakul decided to back down on his promise to pay laid-off workers registered under its social security system 75% compensation of the daily wage for workers affected by the Covid-19 outbreak amid resistance from labour activists, according to a source with the Labour Ministry. The Labour Minister’s plan to raise compensation payments to workers insured under the Social Security Act was opposed by the Social Security Office (SSO) board. For the time being, MR Chatumongkol plans to hold up a hike in the compensation of the daily wage for workers who lost their jobs or suspended from work due to the COVID-19 crisis to the Cabinet, the source said. PTT Plc (PTT) is expected to post a net loss of 4.9 billion baht in the first quarter of this year, compared to a net profit of 29.3 billion baht in the same period of last year and 17.4 billion baht in the 4th quarter of last year, said KGI Securities Thailand. The loss stems from the stock loss from lower oil prices at its subsidiaries including Thai Oil (TOP), Global Chemical Plc (PTTGC) and IRPC Political News The Opposition continues to push for a special House session seeking to debate 3 executive decrees on borrowing of more than 1.9 trillion baht to provide financial aid for people affected by the COVID-19 pandemic. The Pheu Thai Party said it would continue to lead other opposition parties to debate the 3 executive decrees as it is worrying about possible unchecked spending of government aid money on people affected by Covid-19 mitigation policies. Pheu Thai spokesman Anusorn Iamsa-ard said the party is now equipped with information to scrutinise the aid money to be granted from invoking 3 executive decrees related to the financing of Covid-19 relief programmes. He told the government not to take advantage of the situation of the decline in COVID-19 cases to cover up its failure in handling economic problems stemming from the crisis. Former energy minister and Pheu Thai key member Pichai Naripthaphan called for Prime Minister Prayut Chan-o-cha to revoke the imposition of the emergency decree and loosen lockdown restrictions to allow more businesses to resume. Mr Pichai voiced concerns over Deputy Prime Minister Somkid Jatusripitak’s proposal for the government’s plan to inject 400 billion baht worth of spending for local economy stimulus. Mr Pichai said he feared that this massive budget is poised to benefit Phalang Pracharat Party (PPRP) MPs who seek to secure their stake in the Cabinet amid internal rifts inside the government. The rift which stemmed from growing dissatisfaction over PPRP leader Uttama Savanayana. Mr Somkid proposed 400 billion baht to stimulate local economies through projects aimed at creating jobs, strengthening communities and building infrastructure. In the light of the Opposition’s plea for the House to convene a special session to debate the government’s executive decrees on borrowing, the Democrat Party has an indecisive stance on the matter. Akaradet Wongpitak, the Democrat Party MP for Ratchaburi as spokesman of Government whips, said Democrat Party MPs are split over the push for the House to convene a special session to address the executive loan decrees.