Advance Blog

April 30, 2020
Australian Embassy

Headline summary as of 30th April 2020

News

  • Updates related to COVID-19:
    • Media report that today’s daily situation updates from The Centre for Covid-19 Situation Administration (CCSA) will be different from others. The Centre will lay out measures to ease the lockdown with the head of National Security Council, Office of the National Economic and Social Development Council, Public Health (Secretary-general), Interior (Secretary-general) and the Thai Chamber of Commerce present for Q&A session.—Than Settakij
    • Earlier yesterday, the Bangkok Metropolitan Administration (BMA) held a press conference that Bangkok is planning to ease up eight types of businesses necessary for daily lives, starting from 1st May. However, late last night the Royal Gazette published PM order halting all governors’ plan to reopen businesses. The PM ordered all governors to keep on lock down measures until instructed otherwise.
    • Thailand reported on Wednesday nine new coronavirus infections but no deaths, taking to 2,947 cases and 54 deaths its tally since the outbreak began in January.–Reuters

Politics:

  • The power struggle within the main ruling Palang Pracharat Party (PPRP) is still on-going, despite PM Prayuth strong warning earlier to seize until the COVID-19 situation settled. The struggle aims to dethrone the current leader and Secretary-general under Deputy PM Somkid’s wing and enthrone Deputy PM Prawit’s wing in the top executives prior to the prospective cabinet reshuffle.
    • Media reports that Education Minister Nataphol resigned from the executive position of the party. The Minister is a former key person of the People’s Democratic Reform Committee and he is regarded as being under Deputy PM Prawit’s wing (see attached). Should more than half of the executive committee resign, the leader will be automatically out of position.
    • Media also reports that the party staffs called all MPs to come to an ad hoc meeting at 11.00am on 30 April, but the staffs did not mention what’s the agenda of the meeting.
    • Media reports that in the morning of 29th April, Deputy PM Somkid, Finance Minister and PPRP leader Uttama, Energy Minister and PPRP’s Secretary-general Sontirat, and Deputy Agriculture Minister Thammanat went to have a meeting with Mr.  Suriya, Industry Minister and leader of Sam Mitr group (three great friends) in the Party for an hour. They went to have a meeting with the PM for State Enterprise Policy Committee. A source in the party said there was a very serious discussion of how to proceed, but at the end the group decided to reconcile with Deputy PM Prawit, since the General is well-respected amongst many MPs.

Sources: Than Settakij, Krungthep Turakij

  • Media reported on a young lady who commit suicide. She drew a portrait of PM Prayuth and wrote a poem saying this government is so cruel.—all media outlet

Business:

Aviation

  • Finance Ministry is expected to guarantee a loan worth 50 billion Baht to rescue Thai Airways.  The State Enterprise Policy Committee (SEPC) meeting approved in principle the proposal to rehabilitate the national carrier and assigned a financial consultant to work out a rehabilitation blueprint.  Central to the plan is the bailout loan for the airline. 

Source:  https://www.bangkokpost.com/business/1910244/sepc-to-throw-thai-lifeline

Monetary Measures

  • As of 24 April, some 9 commercial banks have sought liquidity support worth 56 billion Baht from the Bank of Thailand’s Mutual Fund Liquidity Facility (MFLF).  The MFLF allows commercial banks to purchase investment units from high-quality money market funds/daily fixed income funds that are affected by decreased market liquidity.  Commercial banks can use the underlying unit trust as collateral to get liquidity support from MFLF, but Bank of Thailand will repurchase only underlying assets that meet its requirements.  Overall the MFLF had provided assistance to 30 mutual funds. 

Source:  https://www.bangkokpost.com/business/1910304/9-banks-seek-central-bank-mflf-aid#cxrecs_s

  • The Bank of Thailand’s 400 billion Baht Corporate Bond Stabilisation Fund (BSF) started operating on Wednesday as part of the Stimulus Phase II plan. BSF will invest in high-quality, newly issued bonds by corporates that cannot roll over maturing corporate bonds during 2020-2021.  Firms must first secure other sources able to take up at least half of their bonds being rolled over before they seek support from the stabilisation fund. BSF is a pre-emptive move to build investor confidence, which if not used, is good. 

Source:  https://www.bangkokpost.com/business/1910048/bond-market-more-stable-but-not-yet-recovered-bot#cxrecs_s

Investment & EEC

  • The Thai government will forge ahead with the MRO project at U-Tapao airport despite Airbus’s withdrawal from the joint venture deal with Thai Airways.  Thai Airways will continue seeking other investors and at the same time will go ahead and invest in the tools and equipment, for which Airbus will provide the training and technical know-how.  The national carrier will wait to negotiate with Airbus at a later date should it become ready to invest in the MRO again.
  • Deputy Prime Minister Somkid also urges Thailand to prepare for an influx of investment from Japan.   The Covid19 outbreak had prompted the Japanese government to reduce investment in China as it has been too reliant on supply chain with China.  Instead, Japan is now seeking to increase investments in ASEAN countries, including Thailand. 

Source:  https://www.bangkokbiznews.com/news/detail/878097?utm_source=category&utm_medium=internal_referral&utm_campaign=economic

  • Thailand’s 2020 manufacturing production index (MPI) is forecasted to reach a record low of negative 6-7 percent.  MPI in March declined for the 11th month in March, down 11.25 percent YoY.  Capacity utilisation rate was 67.2 percent in March, decreasing by 73.9 percent YoY.
  • However, MPI in March increased by 1.8 percent compared to February owing to the recovery of the export sector.  Demand for hard disk drives, air conditioner, medicine and frozen seafood increased YoY.  The automotive industry and related industries were hit hard as they decreased 24.6 percent.

Source:  https://www.bangkokpost.com/business/1910228/mpi-dragged-down-to-record-low-negative  

https://www.bangkokpost.com/business/1909912/march-factory-output-drops-11-25-?fbclid=IwAR09QV0DdEVI7HoIzD925AHi7DgrzIjvzILcxXuJUKJ6AVIJP1YP_N_TVgk

The Australian Embassy Bangkok
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