Debt office vows to get funds for farmers within eight days
June 02, 2014 00:00 By Erich Parpart The Nation 2,531 Viewed
The Public Debt Management Office has vowed to secure funding by June 10 to pay off debts owed to farmers by the former Yingluck Shinawatra government's financially strapped rice-pledging scheme.
Chularat Suteethorn, director-general of the PDMO, said yesterday that bidding on providing loans to the government would begin tomorrow for the whole amount of Bt50 billion following an order from the National Council for Peace and Order.
Proceeds from the auction would be transferred to the Bank of Agriculture and Agricultural Cooperatives in one lot of Bt30 billion on Thursday and the second lot likely on June 10, which would be faster than had been scheduled.
Initially, the bidding was split into two lots – the first for Bt30 billion on Friday and second for Bt20 billion on June 13 with the proceeds to be sent to the BAAC on June 13.
The money could be drawn from lenders three days after the bidding.
The date was moved up to coincide with the NCPO’s goal to settle all overdue payments of Bt92 billion to more than 800,000 farmers before June 22 and the BAAC’s ability to disburse the payments to farmers.
Altogether 32 financial institutions, mostly commercial banks, will take part in the bidding and each has to quote its interest rate and offer a minimum loan of Bt2 billion.
The PDMO believes that financial institutions will be eager to participate in the auction.
“The PDMO is confident that the total offer from financial institutions will reach the maximum target of Bt50 billion along with a good interest rate since the level of liquidity in the system is quite high,” she said.
Once the Bt50 billion is raised, the Finance Ministry will also have to find
Bt40 billion as a guarantee for the BAAC, which was in charge of raising Bt40 billion
to get some of the farmers paid in short order.
The BAAC began to pay farmers last week and Bt30 billion will have been paid to them in five days.
The Finance Ministry will provide clarity on how to raise the Bt40 billion by next week and it could be in the same form of term loans or government-issued bonds, she said.