First rise in foreign debt for six years
23% increase over 2005 revealed by BOT
The foreign debt of the private non-bank sector rose for the first time in six years when it came in at US$29.79 billion (Bt1 trillion) at the end of last year, according to the Bank of Thailand's (BOT) data.
In the first increase since 2000, foreign debts rose by 23 per cent from the previous year. In 2005 they contracted by 2.5 per cent.
Within one quarter, the debts increased by $1.62 billion in September to $29.79 billion in December despite a sharp appreciation of the baht.
Of the total increase, $1 billion was foreign borrowings, $0.24 billion debts without inflow and $0.42 billion currency valuation. The debt-restructuring process accounted for only $0.04 billion.
Earlier, the central bank expressed concern at the rise of foreign debts, which increased significantly last year. However, it insisted that the figure was not yet critical.
The private sector's higher borrowings went against the trend of five years ago, when they hastened to repay their debts to take advantage of the strength of the baht.
According to the report, short-term debts soared by 13.9 per cent year on year, and long-term borrowings jumped to 25.7 per cent, thanks to higher Thai corporate booking of long-term borrowings.
Thus long-term debts remained the largest proportion, at 55.1 per cent, of total debts, or $16.4 billion, and short-term debts accounted for only 5.7 per cent or $1.7 billion. The rest was unclassified borrowings of $11.7 billion.
According to the report, the rising borrowings were debts denominated in yen and US dollars. Baht-denominated debts also jumped due to the baht's appreciation.
"Baht-denominated debts increased in this quarter because the baht's appreciation was higher than the increase in borrowings," said the BOT's report.
Of total debts, 97 per cent have been denominated in US dollars, baht, Japanese yen and euros since 2000. US-dollar debts ranked the highest of the Kingdom's foreign debts, accounting for 43 per cent of total debts, or $12.8 billion.
Baht debts, however, have represented a significant portion since 2000 and recorded $10.4 billion, or 35 per cent of total debts, as of December.
Six main creditors remained unchanged, accounting for 77.3 per cent last year. They were the US, Singapore, Japan, Hong Kong, the UK and Germany.
The US was the biggest creditor with $6.6 billion, accounting for 22.3 per cent of total debts, down from 26.3 per cent in 2005, but its role has gradually declined compared with other creditors. US loans to Thai companies were up only 4.3 per cent last year.
Singapore creditors played a significant role last year. Their loans to Thai companies jumped by 45 per cent to $5.3 billion. The share rose from 15.2 per cent in 2005 to 17.9 per cent last year.
Debts to Japanese creditors recorded $4.3 billion, or 14.5 per cent of total debts, down from 15.4 per cent in 2005.