New formula lifts foreign debt total by about $20bn

Foreign debt levels have increased by about $20 billion after the Bank of Thailand revised its data compilation models. At the end of March, foreign debt stood at $92.3 billion under the new system, up from previous projections of $72.1 billion. The new system is in line with changes in operations of Thai business during the past five to six years where more companies financed investment directly or settled debt offshore without passing through local financial institutions.

Thirachai Phuvanat-naranubala, a central bank assistant governor, said while foreign debt levels increased under the revised models, Thailand's debt service ability was not affected. "Though the inflows of debts were not recorded in the foreign transactions reports, all repayments occurring during the period have already been taken into account,"

Mr Thirachai said. The revised external debt data was not considered high based on international standards, he said. Foreign debt as a percent of gross domestic product declined to 77.2% in 1999 from 93.6% the year before. The debt service ratio, which exceeded 20% in 1998, also dropped to 19.4% last year. Mr Thirachai said international reserves now were 1.3 times the amount of debt coming due by next March.

Total external assets, excluding the non-banking sector, stood at $48.4 billion as of 1999, an increase of $7 billion from the year before, with $5.2 billion representing increases in central bank foreign assets. External liabilities, excluding foreign direct and portfolio investment, stood at $95.6 billion at the end of 1999, a drop of $9.5 billion from the year before due to debt repayments by the private sector.

New data were collected from a survey of more than 6,000 companies on their foreign currency transactions over the past decade. Technical assistance for the new collection system was given by the International Monetary Fund. The central bank has proposed that the Finance Ministry issue regulations requiring private firms to report their external assets and liabilities on a regular basis to improve debt reporting systems. Regulators will also conduct quarterly surveys of businesses with external debt.

Foreign Debt (US $ billion)
	1995	1996	1997	1998	1999	Mar2000
Previous	82.5	90.5	93.4	86.2	75.6	72.1
Revised	100.8	108.7	109.3	105.1	95.6	92.3
Private foreign debt, non-bank sector
	1995	1996	1997	1998	1999	Mar2000
Previous	24.2	31.8	29.5	25.7	21.0	18.4
Revised	42.5	50.0	46.0	45.7	41.9	39.4
	Source: Bank of Thailand