Deposit Insurance Institute to be set up this year
The Deposit Insurance Institute will be established
within this year, but the adoption of full deposit insurance services is
expected to take around four years, according to the Bank of Thailand.
Tarisa Wattanagase, BOT’s deputy governor overseeing
the Financial Institutions Stability Group, disclosed the establishment of
the institute was likely to be completed within this year. Then, the insured
amount range under the Deposit Insurance Institute Act will be drawn up. It
is expected the institute will need around four years to provide full
A source said the Deposit Insurance ACT has already won
the cabinet’s approval and will going before parliament. Once the
institute is established with full services, the guarantee of the bank
deposits by the Financial Institutions Development will be terminated.
According to the latest regulation, the deposit guarantee
amount will gradually reduce in the next four years. Under the rule, the
institute will guarantee the bank deposit of no more than 50 million baht
per account in the first year, 25 million in the second year, 10 million in
the third year and one million in the fourth year.
On the Finance Ministry’s plan to separate the
authority of supervising financial institutions from that of the central
bank, she said the matter was under the consideration of the ministry’s
officials. It has not yet been discussed at the policy-making level. (TNA)
Beer Chang boss makes it to list of world’s richest
The owner of Thailand’s Beer Chang brewery has made it
onto the Forbes list of the 600 richest people in the world for the first
time this year, joining the heads of Red Bull and Charoen Phokaphand.
Charoen Siriwattanaphakdee, who made 194th place on the
list with the wealth of US$3 billion, has built up the Beer Chang and Mekong
empire to the extent that it now sponsors a major UK football club.
Also on the list in 292nd place is Chaliew Yuwittaya,
manufacturer of Red Bull stimulant drinks, and Thanin Jierawanon, president
of the Charoen Phokaphand food group, in 387th place.
Charoen’s presence in the Forbes list of top
billionaires for the first time this year has been attributed to his listing
of Beer Chang on the Stock Exchange of Thailand (SET).
But the three Thai business leaders have a long way to go
to climb to the top of the Forbes ladder, where the number one and two spots
are occupied by Bill Gates and Warren Buffett respectively. (TNA)
KRC supports BOT’s consumer loan control
The Bank of Thailand’s measure to strictly supervise
the consumer loan business will help reduce exploitation of interest rate
and fee charges on consumers and improve the quality of loans in the system,
according to the Kasikorn Research Center.
The leading think tank said it is likely the central bank
will issue the measure to oversee the consumer loan business in the future
following its discussion with commercial banks and non-bank financial
institutions about the interest rate and fee charges on consumer loans. It
viewed the measure would focus on protection of consumers from unfair
interest rate and fee charges, and control of risks on the increase in
future household debts.
Should the central bank set the ceiling of consumer loan
rates, it would help cope with the unfair interest rate charges and
indirectly force business operators to take risks at an appropriate level.
If the BOT sets a minimum income of loan applicants, it
will help reduce the number of low-income consumers who run the risks of
creating debts in a greater amount than they could bear. At the same time,
it would help control risks operators from lending to this customer group.
However, the strict criteria might force low-income consumers to count more
on underground loans because they could not access to formal ones, he
KRC added that the measure to set the ceiling of the
interest rates would result in an adjustment and change in business
performance of operators in a different manner, depending on the target
group of customers and the extent of risks they could take. But given the
fact that most operators currently manage their loan portfolios quite
efficiently, it believed they would opt to reduce costs and increase revenue
from other products to ensure returns meet the original target and the
business expands more steadily.
KRC said repercussions from the consumer loan control
would be more extensive than those from the credit card supervision since
the customer base covers both low-and medium-income consumers. (TNA)
Government to provide clean water to all villages
The Thai government’s water management and development
plan will be launched in the Moon River basin in the northeast and the Ping
River basin in the north. Under the scheme, around ten small dams will be
built in both river basins, according to the deputy permanent secretary for
Natural Resources and Environment, Siriphong Hangsaphruek.
There are also plans to establish a large scale
irrigation program to levy water from neighboring countries, including Laos,
Cambodia and Myanmar, into both river basins. More than 10 billion cubic
meters of water is expected to be added to the river systems.
Government agencies discussed the country’s overall
water management scheme late last month. “Initial results from the
development study will be submitted to Prime Minister Thaksin Shinawatra
later this month,” Siriphong said.
The government plans to complete a 60 billion baht
program to provide clean water to all villages in Thailand within the next
four years. The entire program will require more than 220 billion baht.
Thailand at global forefront of digital camera boon
Thailand is emerging as one of the leading countries in
the world for sales of digital cameras, with one million units set to leave
the shelves this year, thanks to government tax measures, according to a key
Boonjert Hanwichitchai, deputy director for operations of
IT City Plc, says that the digital camera market in Thailand is set to
record a high rate of growth this year, with sales expected to exceed one
million units, compared to 800,000 last year and 600,000 in 2003.
Predicting that Thailand could become a global center of
the digital camera trade, he notes that all the world’s leading digital
camera manufacturers are now keen to get their latest models onto the Thai
market, while increasing numbers of foreigners are purchasing digital
cameras during their trips to the kingdom.
One of the main causes of this latter phenomenon is the
government’s tax refund scheme for foreign visitors, as well as a recent
move to slash taxes on digital cameras from 3 percent to zero percent. As a
result, digital cameras purchased in Thailand now even cheaper than those
bought in Singapore and Hong Kong. (TNA)
Army hands first permanent houses to tsunami survivors
Residents of Baan Nam Khem Village in Thailand’s
southern resort province of Phang-nga who survived the devastating December
tsunamis were given their first new permanent houses by the Royal Thai Army
on March 12. The houses - numbering a total of 117 - were handed to the
survivors by the Commander-in-Chief of the Royal Thai Army, Gen. Prawit
The Royal Thai Army has been told by the government to
construct 800 permanent houses for the tsunami survivors. Most of those
handed over on the day are houses which incorporate areas for trade. (TNA)
Plans to standardize herbs
In an attempt to raise the standard of Thai herbs, the
government plans to request researchers in both the public and private
sectors to jointly conduct research to create better quality control.
There is a need for better quality control and standards
of Thai herbal materials in order to raise consumer confidence, according to
the director-general of the Public Health Ministry’s Department Medical
Sciences, Paijit Warachit. The problem of quality control of Thai herbs
occurs frequently because of differences of seeds, age, environment,
sub-standard production and foreign substances found in finished products,
he said. Stricter quality control will help improve international
recognition, he noted.
The government plans to involve the Thai herbal products
industry in government strategies. Researchers will be invited to help
establish standards and quality control for Thai herbs used in manufacturing
medicines, supplementary food and cosmetics. The government plans to
establish a laboratory center which will conduct tests and issue
certificates guaranteeing the Thai herbs quality, he added. (TNA)
Thai-Lao border trade looks promising
Bilateral trade along the Thai-Lao border is continuously
expanding after the opening of the Thai–Lao Nam Hueng Friendship Bridge
linking Thailand’s northeastern Loei Province and the Lao People’s
Democratic Republic, according to a senior commercial official.
“The bridge across the Hueng River, the demarcation
line between the two sister countries, boosts trade, investment, and
culture,” said the province’s chief commercial official, Koonchai
The trade value recorded at three permanent border
checkpoints in Loei’s Chiang Khan District totaled 127 million baht in
February. Thai export to Laos accounted for 69 million baht and import
valued at 57 million baht. Therefore, Thailand’s trade surplus with Laos
stands at 11.49 million baht.
The major exports are construction materials, cars,
consumer goods, and fuel. The imports include wood, processed wood products,
crops and minerals.
“The problem now is that the rise of oil prices also
raises the costs of production affecting Thai and Lao entrepreneurs,”
Koonchai said. “They also lack of confidence in trade direction, as
Thailand’s Ministry of Finance has not yet announced tax exemption for
Laos’ eight items under the ASEAN Integration System of Preference (AISP)
Program,” he said.
He added that goods such as corn and pearl barley flooded
into the market and traders have asked for tax exemption, but there has been
no official announcement to grant the trade privilege. (TNA)
Major road show set in April
Deputy Prime Minister Somkid Jatusripitak disclosed there
will be a major road show this April of listed companies similar to last
year’s successful Thailand Focus event. Somkid, who is also the finance
minister, said he had a discussion with the Stock Exchange of Thailand (SET)
to set an appropriate period for the organization of what he described as
one of the country’s biggest road shows of listed firms.
The objective of the event is to give investors a clear
direction of the economy so they will have more confidence in the local
capital market. He said he will also take the opportunity to use the event
to stimulate the country’s tourism by offering attractive tour packages to
Somkid suggested the event should be organized in late
April after the government’s schedule to deliver its policy before
parliament during March 23-25 so that investors are aware of how the
government will manage the economy and administer the country. As well, it
is the post-Songkran (Thai New Year) festival period when most listed
companies are set to release their quarterly performance results. Should the
listed firms enjoy more profits than estimated in their performance, it
would be helpful to the investment atmosphere in the stock market.
He also revealed the ministry’s budget on the
investment in mega-projects has been allocated at around 1.55 trillion baht,
down from 2.33 trillion originally offered by project bidders. Somkid said
the ministry will give priority to investment projects that need to be
implemented urgently and those in which the government has never invested.
It is expected the whole investment plan will be concluded soon. (TNA)
Total vehicle sales drop in February
Total vehicles in February were reduced by 4% from those
in the same month of the previous year, signaling the decline of people’s
Vallop Tiewsiri, director of the Automobile Institute,
said, “The country is facing several problems now including higher fuel
prices, rising interest rates, drought, southern violence, and the legacy of
the tsunami attacks.”
Many automakers are considering decreasing the estimate
of total sales for this year to around 680,000 units from 700,000 units.
Last year, total sales were 628,000 units. One the other hand, the industry
is not too concerned because they have received enough purchase orders in
This year, exports are expected to reach 420,000-450,000
units compared with only 330,000 units last year. Vallop projected vehicle
prices will not rise despite impacts from higher fuel and steel prices since
competition in the business is still fierce. More importantly, steel costs
account for only 25% of the whole vehicle production. (TNA)