PDMO to settle billions in yen debt

The Public Debt Management Office (PDMO) will prepay loans worth Y55.6 billion to reduce state enterprises' debt burden amid the weakening Japanese currency.

"The Japanese government has approved the first tranche to lessen its debtor's burden, and we will negotiate with the Japanese government for gradual repayment before the others come due," Suwit Rojanavanich, deputy director-general of the PDMO, said yesterday.

If yen-denominated debt is paid off in advance, the baht equivalent will be less, he said.

The first tranche - the Mass Rapid Transit Authority's Y32-billion (Bt13-billion) loan - will be settled on April 3.

The remaining talks with the Japanese government are for TOT's Y5.5-billion loan, the Provincial Electricity Authority's Y13.7-billion loan and the Metropolitan Waterworks Authority's Y4.4-billion loan.

As of December, Thai government debt stood at Bt4.06 trillion or 43.99 per cent of gross domestic product.

Of total public debt, about 7 per cent is external debt, of which 60 per cent is yen debt.

The PDMO has already swapped half of the yen loans and the rest will be swapped to mitigate the exchange-rate risk, Suwit said.

Swaps of yen into baht are done for loans maturing in 10-15 years in the Thai market. Longer loans are rarely swapped, he said.