Annual market dialogue for fy2017

PDMO Annual Market Dialogue FY2017 8th September, 2016 Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Bond Market Development Bureau 1 Public Debt Management Office, Ministry of Finance

เรื่องเพื่อหารือ / รับฟังความคิดเห็น 1. ผลการออกตราสารหนี้รัฐบาล ประจาปีงบประมาณ พ.ศ. 2559 2. ผลการการแลกเปลี่ยนพันธบัตรรัฐบาลรุ่น LB176A ในปีงบประมาณ พ.ศ. 2559 3. แผนการระดมทุนและแผนการดาเนินงานในปีงบประมาณ พ.ศ. 2560 4. แผนการลงทุนและความก้าวหน้าในการดาเนินโครงการโครงสร้างพื้นฐาน

1. ผลการออกตราสารหนี้รัฐบาล ประจาปีงบประมาณ พ.ศ. 2559 • รายงานผลการออกตั๋วเงินคลังในปีงบประมาณ • รายงานผลการออกพันธบัตรรัฐบาล Benchmark

FY2016

 Low Cost of Funding  High Volume of Short-term Demand

T-Bill Auction Result

THB Mil.

Basis Points

75,000

10.00

Q1

60,000

Q3

Q2

Q4 7.50

45,000

5.00 30,000 2.50

15,000

2.4

T-1= 00

0.4 0.2 0.1

-0.4 -1.2

-15,000

-0.9

-2.4

-30,000

1.3

0.9

0.7 -0.6 -0.8

2.0

-2.1

0.2

0.00.1 -0.2 -0.6 -1.0

-2.5

-1.9 -1.8 -1.9 -2.0 -2.3 -2.6 -2.7 -3.2

-2.6

-3.1

-60,000

-1.5 -1.7

-1.5 -1.6

-2.5 -3.0

-1.8 -2.3

0.1

-0.1 -0.5

-1.4

-1.5 -2.6

-2.50

-2.2 -2.4

-3.8 -4.4

-45,000

0.00

0.6 0.3

-5.5

-4.3

-4.4 -5.0

-4.9 -5.2 -5.4

-5.00 -4.8

-5.0 -5.4

-7.50

T-bill 3 month T-bill 6 months R-bill 3/6 months

T-bill (Allocated Amount) Participated Amount (Excess Demand) -8.8 Spread [AAY-Yield(T-1)]

-8.4

-75,000

-10.00 Oct-15

Nov-15

Dec-15

Jan-16

Feb-16

Mar-16

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-16

4

FY2016-Present GOVT Bond Auction Results Classified by Auction Schedule Short-term Benchmark Bond (<10 yrs) Long-term Benchmark Bond (>10 yrs) Inflation-linked Bond Amortized Bond

Participated Amount (Excess Demand) Spread [AAY-Yield (T-1)]

THB Mil.

Basis Points

120,000 100,000

96,320

30

FY2016

25

81,300

80,000 64,588

60,000 40,000 20,000

20

73,730 66,409

15

55,899 11.2

37,355 29,850

28,602 24,420 22,472 26,905 23,707 21,525 16,761 19,829 15,407 15,895

24,915

-20,000

10

26,110

25,69324,270 21,700

7.0 16,807 30,000 18,534 17,923 18,155 16,764 17,409 17,890 13,893 4.6 24,000 4.3 3,2708,200 5 11,920 20,436 10,230 2.9 16,000 16,000 15,000 1.9 16,000 13,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 9,802 9,320 7,730 0.2 0.00 -1.2 -1.5 2,600 -2.1 -2.4 -2.7 -3.2

16,190 23,779 4.4 14,330

13,000 13,000 11,0009,00013,000 11,000 10,000 10,000 10,000 10,000 9,000 -0.1 0.2 -0.5 -2.2 -1.9 -1.9 -2.6 -4.0 -5.2

T-1= 0 0

33,860

-5.8

-6.4 -6.2

-5

-6.1

-7.8 -9.4

-40,000

-10

-11.2

-60,000

-15 -16.5

-20

-19.9

-100,000

-25

31-Aug-2016

24-Aug-2016

10-Aug-2016

27-Jul-2016

20-Jul-2016

13-Jul-2016

6-Jul-2016

29-Jun-2016

22-Jun-2016

15-Jun-2016

15-Jun-2016

8-Jun-2016

18-May-2016

27-Apr-2016

20-Apr-2016

5-Apr-2016

5-Apr-2016

30-Mar-2016

16-Mar-2016

9-Mar-2016

2-Mar-2016

17-Feb-2016

10-Feb-2016

27-Jan-2016

20-Jan-2016

13-Jan-2016

6-Jan-2016

23-Dec-2015

8-Dec-2015

2-Dec-2015

25-Nov-2015

18-Nov-2015

11-Nov-2015

28-Oct-2015

21-Oct-2015

-25.1

21-Oct-2015

-120,000

-17.7

-18.8

-80,000

-30

5

FY2016 – Present GOVT Bond Auction Results Classified by Tenor THB Mil.

100,000

Benchmark Bond 5 – 10yr 5-Yr

10-Yr

Benchmark Bond 15 – 50yr 15-Yr

20-Yr

30-Yr

bps

50-Yr

40

75,000

30

50,000

20

25,000

10

T-1= 00

0

-25,000

-10

-50,000

-20

-75,000

-30

-100,000

-40 Short-term Benchmark Bond (<10 yrs) Long-term Benchmark Bond (>10 yrs)

Max. (bps) Min. (bps) Average Accepted Yield

6

เปรียบเทียบวงเงินการออกพันธบัตร Benchmark ในปีงบประมาณ พ.ศ. 2558 และ 2559 Benchmark FY2015

FY2016

Tenors

%Chang Amounts (MB.)

5 Yrs. 10 Yrs. 15 Yrs. 20 Yrs. 30 Yrs. 50 Yrs. Amortize 25 Yrs. Total

155,558 73,198 73,476 49,255 36,760 53,970 442,217

Amounts (MB.)

168,827 83,000 82,000 53,830 56,532 62,000 506,189

9% 13% 12% N.A.

15% 69% N.A.

14%

7

2. ผลการการแลกเปลี่ยนพันธบัตรรัฐบาลรุ่น LB176A ในปีงบประมาณ พ.ศ. 2559 • รายงานผลการแลกเปลี่ยนพันธบัตร สาหรับพันธบัตรรัฐบาล รุ่น LB176A

ผลการแลกเปลี่ยนพันธบัตร สาหรับพันธบัตรรัฐบาลรุ่น LB176A

• ความเสี่ยงลดลง • หนี้ที่แลกมีอายุยาวขึ้น • เพิ่มสภาพคล่อง

  =

: 218,683 ลบ. : จาก 9 เดือน : ออกพันธบัตรใหม่

162,000 ลบ.

20 ปี 9 เดือน 56,682 ลบ.

ล้านบาท

ยอดคงค้างพันธบัตรรัฐบาลหลังจากการทาธุรกรรมแลกเปลี่ยนพันธบัตร (Bond Switching)

350000

Source Bond Destination Bonds Switched Amount

ชื่อของรุ่นพันธบัตร

อายุคงเหลือ

วงเงินพันธบัตรออกใหม่ (ลบ.)

ร้อยละ

LB206A LB226A LB26DA LBA37DA LB666A รวม

3 ปี 10 เดือน 5 ปี 10 เดือน 10 ปี 4 เดือน 21 ปี 4 เดือน 49 ปี 10 เดือน

11,000 9,000 14,182 7,000 15,500 56,682

19.4 15.9 25 12.4 27.3 100

300000

LB176A

250000

-56,682 ลบ.

200000

150000

100000

50000

9

LB666A

LB616A

LB466A

LB446A

LB416A

LB406A

LB396A

LB383A

LBA37DA

LB366A

LB326A

LB316A

LB296A

ILB283A LB283A

LB27DA

LB267A LB26DA

LB25DA

LB244A LB24DA

LB233A LB236A

LB226A LB22NA

LB213A LB214A ILB217A LB21DA

LB206A

LB193A LB196A LB198A LB19DA

LB183A LB183B LB191A

LB175A LB176A LB17OA

LB16NA LB171A

0

Historical Changes in Thai Government Bonds Issuance by Bond Types THB Mil.

Saving Bonds

Amortizing Bonds

Inflation-Linked

Long-term (>10 yr)

Medium-term (5-10 yr)

Short-term (<5 yr)

* Include Debt Switching

700,000 7,367

600,000

20,141

69,073

54,000

500,000

31,577 82,234

3,814

7,000 89,379

65,000

50,872 38,000

29,338

40,000

400,000

136,641

134,000

152,861

61,000

269,862 140,733

22,730 148,900

300,000

151,471 221,110

200,000

223,850 266,139

259,826 215,000

274,999

100,000

202,000 98,850

0

47,000

46,000

2010

2011

96,000 51,605

2012

2013

2014

2015

11,000

2016 10

The Average Maturity of Thai Government Bonds Issuance 2010

2011

2012

2013

2014

2015

2016

9 years and 4 months

11 years and 8 months

11 years and 2 months

14 years and 10 months

16 years and 10 months

14 years and 6 months

15 years and 10 months 11

Average Maturity in year of the debt stock by country Year 16

14

12

9.58

10

8

6

4

2

0 US

Italy

Germany

Australia

Korea

Note : Korea As of 20 US Italy Germany Australia Canda France UK As of 2015 Thailand As of Jan 2016 Japan As of May 2016

Canada

France

Japan

Thailand

UK

Source : Debt Management Office UK and OECD

12

Linking CGIF & BAHT BOND to the Development of Bond Market Total Outstanding 10,457,440 THB Mil.

CGIF

(As of 7th Sep, 2016 )

Inaugural (Noble, Hong Kong)

Baht Bond (Foreign Issuers Bond)

BAHT BOND

0.65%

THB

67,499 Mil.

THB 2,850 Mil.

Corp Bond

25%

SOEs Bond

8%

2013 2014 2013 2014 2015 2015 2016 2016 201 2017 201 2018201 20192020 2020

111111 Natural Hedging

Inv’t Grade

BOT Bond

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

MHBK

CABEI

28%

KEXIM

WOORI EDLGEN

Targeted Industry

GOVT Bond 38%

Why now?

MOFL

What next?  Broadening Issuer Base : AEC  Becoming bond market leader of the region

 Entering ASEAN Economic Community (AEC)

(PDDF.)

13

BAHT BOND ISSUERS FOR 2016

1/2559 (1 Jan 2016 - 30 Sep 2016)

2/2559

Malayan Banking Berhad (Maybank) Australia and New Zealand Banking Group (ANZ) National Bank of Abu Dhabi (NBAD) Central American Bank for Economic Integration (CABEI)

Ministry of Finance, Lao PDR (MOFL)

(1 May 2016 - 31 Jan 2017)

3/2559 (1 Sep 2016 - 31 May 2017)

Trina Solar (Singapore) Science & Technology PTE. LTD. (Trina Solar (Singapore)) KNM Group Berhad (KNM Group)

14

Feb Mar Apr May Jun

Jul

Aug

Sep Oct

Nov Dec Jan

Feb Mar Apr May Jun

Jul

Aug

Sep

Issuance Period 9 months (Jan – Sep)

CONSIDERATION

Issuance Period 9 months (Sep – May) SUBMISSION

CONSIDERATION

Issuance Period 9 months (May – Jan) SUBMISSION

CONSIDERATION

Submission period: 3 Round per year Issuance period: 9 month

Jan

CONSIDERATION

Dec

SUBMISSION

Nov SUBMISSION

Baht Bond SUBMISSION PERIOD

Issuance Period 9 months (Jan – Sep)

15

3. แผนการระดมทุนและแผนการดาเนินงานในปีงบประมาณ พ.ศ. 2560 • แผนการออกตั๋วเงินคลัง ปีงบประมาณ พ.ศ. 2560 • แผนการออกพันธบัตรรัฐบาล ปีงบประมาณ พ.ศ. 2560

2016 - 2022

Government Funding Needs

700 - 950 THB Bil. per Year

957,xxx 86MB

2,XXXMB

New Borrowing 350 - 450 THB Bil.

Per year

Insurance Decree

3XXMB

4,XXXMB 38,XXXMB 59,XXXMB 38,XXXMB

THB mil.

5x,xxxMB

Substitution for foreign currency bond On-Lending

390,000

Deficit Bill 58,940

(2016-2022) 200,666

344,084

300,000

250,000

250,000

390,000

390,000

390,000

390,000

390,000

GOVT 140,192

Bond Switching

50,000

Rollover 350 - 500 THB Bil.

Per year (2016-2022)

52,000

-0-

149,209

231,000

307,945

252,898

2xx,xxx

177,545

453,367

114,286

112,708

286,104

3xx,xxx

102,059

101,800

37,900

109,000

-0-

FY2017F FY2017

FY2018F

FY2019F

FY2020F

FY2021F

FY2022F

FIDF 113,014

340,122

191,095

129,124

59,374

104,236

FY2011

FY2012

FY2013

FY2014

FY2015F

FY2016

17

Government Bond Supply Keep Increasing Since 2009 Government Fund Raising Strategy

30%

Bond 70%

Bank Loan T-bill P/N

Benchmark Bond Savings Bond Others

18

FY 2017

GOVT Fund Raising Plan Insurance Decree

440,XXX MB

New Borrowing

On-Lending

Roll Over 517,XXX MB

50,xxx

Promissory Notes R-Bill, And Others

Savings Bond Rollover SOEs Debt

Rollover Govt Debt

15,xxx

189,xxx

Loan Bond 5-10-15-20-30-50 yrs

Rollover FIDF Debt

By Bills

Remark :

-Tentative-

5x

390,xxx

Deficit

957,xxx MB

313,xxx

550,xxx

By Instruments

1. Exclude external funding for both new borrowing and rollover debt with amount of 71,xxx 2. Exclude T-Bill rollover debt

19

FY 2017

T-Bills Plan 3 & 6 months T-bill : Issue on demand

THB Mil. 30,000

Q1

25,000

Q2

Q4

Q3

20,000

10,000

5,000

Amount xx,xxx

15,000

1 month T-bill : Rollover

0 Oct-15

Nov-15

Dec-15

Jan-16

Feb-16

Mar-16

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-16

20

ALL FY2017

Benchmark Bond is approximately 550 Bil.

60% of FY2017 Funding Needs 957 Bil.

THB Mil.

500,000 Benchmark Bond Tenors

400,000

Symbol

Issuance Size

5-yrs

LB226A

140,000 – 160,000

10-yrs

LB26DA

90,000 – 100,000

15-yrs

LB316A

70,000 – 80,000

20-yrs

LB366A

60,000 – 70,000

30-yrs

LB466A

60,000 – 70,000

50-yrs

LB666A

80,000 – 90,000

Total Benchmark Bonds

Total

550,xxxMil.

550,xxx MB

300,000

Top-up

5

15 20

Top-up

Top-up

10

30

TTM

1

2

3

4

5

5

6

7

8 9 10 11

10

12

13 14 15 16 17-18 19-20 21 22 23 24 25 26-27 28 29 30

15

20

30

31-39

40

41-44

45

21 45-49

LB666A LB666A

LB616A

LB466A LB466A

LB446A

LBA37DA LB383A LB396A LB406A LB416A

LB366A LB366A

ILB353A

LB316A LB316A LB326A

0

LB16NA LB171A LB175A LB176A LB17OA LB183A LB183B LB191A LB193A LB196A LB198A LB19DA LB206A LB213A LB214A ILB217A LB21DA LB226A LB226A LB22NA LB233A LB236A LB244A LB24DA LB25DA LB267A LB26DA LB26DA LB27DA ILB283A LB283A LB296A

Top-up

100,000

Top-up

50

Top-up

200,000

50 50

Benchmark Bond Auction Plan in FY2017

Tenors

Symbol

Coupon

Auction Size

Frequency

Total Issuance

5

LB226A

1.875%

20,000 – 30,000

5-6

140,000 – 160,000

10

LB26DA 2.125%

18,000 – 20,000

5-6

90,000 – 100,000

15

LB316A

3.65%

14,000 - 16,000

5-6

70,000 – 80,000

20

LB366A

3.40%

11,000 – 13,000

5-6

60,000 – 70,000

30

LB466A

2.875%

11,000 – 13,000

5-6

60,000 – 70,000

50

LB666A

4.00%

14,000 – 16,000

5-6

80,000 – 90,000

Remark: Including Greenshoe Option for 5-yr Benchmark Bond

22

4. แผนการลงทุนและความก้าวหน้าในการดาเนินโครงการโครงสร้างพืน้ ฐาน

Financing Infrastructure Investment Kingdom of Thailand

Jindarat Viriyataveekul Executive Director of the Public Infrastructure Project Financing Bureau Public Debt management Office, Ministry of Finance, Thailand MARKET DIALOUGE 8 September 2016

Content  Current State of Thailand Transportation Infrastructure  Transport Infrastructure Development Master Plan

2015-2022  Financing Transportation Investment

25

Current Situation: Public Debt VS Thailand Competitiveness Thailand’s Public debt to GDP stood at moderate level compare to other countries

หมายเหตุ : ข้อมูล ณ เมษายน 2559

Thailand Global competitiveness 2016 Infrastructure

Source: World Economic Forum (2016)

Value Rank/140

26

Current State of Transportation Infrastructure in Thailand

Source : MOT, Nov 2015

Current

Master Plan

Financing

27

Current State of Transportation Infrastructure in Thailand Bangkok Mass Rapid Transit

Bangyai – Bangsue 23 km.

Total 123 km.

Bangsue – Hualumpong 20.8 km.

Bangsue - Talingchan 15 km.

Airport Rail Link 28 km.

Morchit-OnnuchNational StadiumTaksin bridge 24 km.

Taksin bridge-Bangwha 7.5 km.

Current

Onnuch-Barring 5.25 km.

Master Plan

Source : MOT, Nov 2015

Financing

28

Master Plan 2015-22 : Thailand Transport Infrastructure Development Total of 112.8 Bil. USD (equiv. 3.3 Tril. Baht) * Source: MOT June 2015

Inter-city Rail Network

Highway Network

• Upgrade rail infrastructure and overall system

• Develop 4 lane-road networks linking Thailand’s key economic regions and borders areas

• Build double-track in 6 main rails with their extension to respective borders

• Construct new motor ways • Develop facilities along the main roads such as container yards

Action Plan 2015-16

Public Transportation Network in Bangkok & Metropolitan • Extend mass transit railway system in Bangkok and vicinity • Improve quality of service and safety of mass transit bus as well as to enhance its environment standard

Maritime

Action plan 2016 mln baht

3,895 mln baht

Mode Meter gauge 118,026 mln baht

1,796,386

Air Transport

51,607 mln baht

Current

Maritime Transport Development

• Enhance airport capacity to be the regional center of air transportation

• Improve seaport on both Thai gulf and Andaman sea

• Establish the aviation industrial estates

: Bidding of 20 Projects

Total of 60 Bil. USD (equiv. 1.796 Tril. Baht) Inter-city network 160,420 mln baht

Air Transport Capacity Enhancement

Master Plan

Borrowing

PPPs

SOEs

59%







3.9

7%







13.2

22%







Motorway

5.3

9%







Airport

1.7

3%



Maritime Transport

0.1

0%



59.8

100%

MRT

Mass Rapid Transit 396,614 mln baht

Budget

35.5

RAIL - Standard Gauge RAIL - Meter Gauge

Standard gauge 1,065,824 mln baht

Sources of Fund

$Bil.

Total

Financing

29

Dual Track : 1 m. gauge 5 routes

Dual Track: 1.435 m Standard gauge 4 Routes

Construction process

Kongkaeng

1 Dual-track routes from Jira rd. to Kongkaeng Approx. 185 Km. Investment budget 26,004 mil baht Progress 1.9% (expected to finish in May 2019)

Paknampho

Bidding process

Lopburi

3

Jira

Nakhonpathom

Preparation for cabinet approval 3 Dual-track routes from Mapkabao to Jira Approx. 132 Km. Investment budget 26,004 mil baht (expected to finish in November 2019) 4 Dual-track routes from Nakhonpathom to Huahin Approx. 165 Km. Investment budget 20,036 mil baht (expected to finish in December 2019) 5 Dual-track routes from Lopburi to Paknampho Approx. 148 Km. Investment budget 24,840 mil baht (expected to finish in December 2020) Current

1 Mapkabao

5

2 Dual-track routes from Prachuap Khiri Khan to Chumphon Approx. 167 Km. Investment budget 17,249 mil baht. (expected to sign contract in October 2019)

Air transportation and maritime transport development

Public Transportation Network in Bangkok & Metropolitan 5 routes

Highway Network 3 routes

Master Plan

4 HuaHin Prachuap Khiri Khan 2

Chumphon

Financing 30

3

Dual Track : 1 m. gauge 5 routes

Dual Track: 1.435 m Standard gauge 4 Routes

Highway Network 3 routes

Public Transportation Network in Bangkok & Metropolitan 5 routes

Air transportation and maritime transport development

EIA Approval and Preparation for PPP approval Dual- track High speed train from Bangkok to Huahin Approx. 211 Km. Investment budget 94,673 mil baht. (expected to propose to PPP committee in October 2016) 2 Dual- track High speed train from Bangkok to Rayong Approx. 193.5 Km. Investment budget 152,528 mil baht. (expected to propose to PPP committee in October 2016) 1

4 3

Feasibility study The joint railway cooperation between Thailand and China from Bangkok- Kaengkhoi- Nongkai and Kaenkhoi â&#x20AC;&#x201C; Maptaphut 4 The joint railway cooperation between Thailand and Japan from Bangkok â&#x20AC;&#x201C; Changmai 3

1 2 2

4

Current

Master Plan

Financing

Dual Track : 1 m. gauge 5 routes

Dual Track: 1.435 m Standard gauge 4 Routes

Highway Network 3 routes

Air transportation and maritime transport development

Public Transportation Network in Bangkok & Metropolitan 5 routes

Construction process Motorway from Pattaya to Maptaphut Approx. 32 Km. Investment budget 17,819 mil baht. Progress 1.3% (expected to finish in 2019)

Bidding process: Will be constructed in Sep â&#x20AC;&#x201C; Dec 2016) Motorway from Bangpain to Nakonratchasrima Approx. 196 Km. Investment budget 76,600 mil baht.

Motorway from Bangyai to Kanchanaburi Approx. 96 Km. Investment budget 49,120 mil baht.

Bangpain Nakonratchasrima

Bangyai Kanchanaburi

Pattaya to Maptaphut

6

Current

Master Plan

Financing

Dual Track : 1 m. gauge 5 routes

Dual Track: 1.435 m Standard gauge 4 Routes

Highway Network 3 routes

Public Transportation Network in Bangkok & Metropolitan 5 routes

Air transportation and maritime transport development

Bidding process 1 Pink Line (Kaerai – Minburi) - Propose the Approx. 34.5 Km. selection to SEPO Investment budget 56,691 mil baht. in March 2017 2 Yellow Line (Ladprao – Sumrong) - Expected to sign contract in April Approx. 30.1 Km. 2017 Investment budget 54,644 mil baht.

3 Orange Line (Thai Cultural Center - Minburi) Approx. 21.2 km. Investment budget 92,532 mil baht.

Expected to sign contract in May 2017 Cabinet Approved 4 Light red Line (Bangsue – Phayathai – Makkasan Huamark) and Dark red Line (Bangsue – Hualumpong) Approx. 25.9 Km Investment Budget 44,157 Mil baht.

Proposing to Cabinet Approved 5 Purple Line (Taopoon – Ratburana) Approx. 23.6 Km Investment Budget 131,004 Mil baht. EIA study is also in the approval process.

5

Current

Master Plan

Financing

Dual Track : 1 m. gauge 5 routes

Dual Track: 1.435 m Standard gauge 4 Routes

Highway Network 3 routes

Public Transportation Network in Bangkok & Metropolitan 5 routes

Air transportation and maritime transport development

Construction Process

The Coastal port (Port A) at Laem Chabang Port Investment budget 1,819.29 mil baht. Progress 13.98% (expected to finish in November 2017)

The container depot development at Laem Chabang port phase I Investment budget 2,031 mil baht.

Progress 0.09% (expected to finish in October 2017)

Bidding process The Suvarnabhumi airport development phase II Investment budget 50,322 mil baht.

Got the 2 contractors from total 7 contracts (expected to finish in 2019)

7

Current

Master Plan

Financing

6,000

1.62%

1.58%invested Approx.

2006-2015 : Thailand 1.51% $6 4,000 Billion/Year (1.8% of GDP) in Transport Sector

5,000

1.08%

Million $

9,000.00

0.85%

3,000

8,000.00 7,000.00

1.00%

2,000 1.90%

2.01%

1,000

5,000.00

1.08%

4,000.00

0.99%

1.94%

2006 0.85%

2007

2008 0.85%

0.94%

2,000.00

2.50%

2007

2.00%

1.64% 1.47%

2008

2009

2010

2011

6. Motorway Fund 5. Road maintenance project

1.50%

0.85%

2.00%

1.65%

0.62%

2006

2.50%

0.60% 1.64%

1.54%

3,000.00

1,000.00

0.85%

%

2.14% 1.99%

1.76%

6,000.00

0.91%

1.44%

1.47%

2009

0.82%

20100.85% 2011

0.89%

1.50%

2012

1.00%

6. Motorway Fund 0.52% 5. Road maintenance project 0.50% 4. TKK - Ministry of Transport 3. Borrowing 2. SOE Revenue- Transportation Sector0.00% 2012 2013 2014 2015 1. Gov Budget -Transportation Sector Budget to GDP Total Transport Inv to GDP

4. TKK - Ministry of Transport 3. Borrowing

0.85%

1.00%

2. SOE Revenue- Transportation Sector 1. Gov Budget -Transportation Sector

0.52%

Budget to GDP Current 0.50%

Total Transport Inv to GDP

Master Plan

Source : Budget Bureau , MOT, NESDB, PDMO, SEPO

Financing

35

Financing Transport Investment Action Plan 2016 Borrowing remains major tool while PPPs increasingly becomes a prominent method

SOEs Revenue

3%

Toll Road Fund 1% Unit : $ Billion

Annual Budget PPPs 21%

12%

Government/ SOEs Borrowing 63%

Source of Fund Borrowing

2016

2017

2018 2019-2022

37.9

0.11

0.83

2.29

33.69

Budget

7.1

0.47

1.71

2.18

2.72

SOEs Rev.

1.9

0.06

0.51

0.80

0.49

12.6

-

0.42

0.61

11.53

0.5

0.07

0.13

0.14

0.13

59.8

0.70

4.60

6.02

48.66

PPPs Toll Road Fund

Total

Current

$bil

Master Plan

Financing

36

Infrastructure Financing Options Sources

Use

Limitations

projects with local currency return/expenditure

Limited resources

SOEâ&#x20AC;&#x2122;s Revenue

SOE projects with HIGH financial return

SOEâ&#x20AC;&#x2122;s Revenue does not meet its rapid demand of infrastructure investment

Borrowing/Bond/ Debenture

projects with foreign currency return/expenditure

Public Debt should not exceed the fiscal sustainability level at 60% of GDP to ensure stability and credibility

SOE Public Offering/ Privatization

projects with HIGH financial return (Financial Viable)

Needs mature Industry structure and public understanding

PPP

projects with HIGH financial return (Financial Viable)

Alternative source for infrastructure investment and increases private participation but may be restricted in certain subsectors

Brown Field Projects

Another solution to invest sustainably despite higher cost of capital and more complexity compared to plain debt financing

Budget

Infrastructure Fund

Public Debt/GDP

Fiscal Sustainability Current

Debt repayment/GDP

Master Plan

Financing

37

Sources of Fund: Government or SOEs? High Financially Viable : SOEs

Expressway

SOE Revenue/ Borrowing

Airport

Electricity

Project Finance

PPPs

Energy

Infrastructure Fund

Low Financially Viable with High Economic Return : Government

Rail & MRT

Budget

Current

Public Health

Road System

Government Borrowing

Master Plan

Education

PPPs

Financing

38

Funding Sources also depend on Purposes of Expenditure Metropolitan Mass Transit

Provincial Rail Network

Annual Budget

 Land acquisition  Consultants

 Land acquisition  Consultants

 Land acquisition  Consultants

 Land acquisition  Consultants  Construction

Government Borrowing

 Civil Works

 Civil Works  Signaling System

 Civil Works

 Civil Works (Large Projects)

SOE Revenue & Borrowing

 Rolling Stock  Signaling System

Financing Source/Sector

PPPs Infrastructure Funds

 Rolling Stock

Current

Highways /Motorway

 Rolling Stock  Civil Works  Fee  Rolling Stock collection system  Maintenance

Master Plan

Water Transport

 Equipment and tools

Air Transport

 Consultants  Civil Works  Equipment and tools

Financing

39

Public debt projection

within Sustainability framework (<60%)

- Projection -

Source : PDMO as of 22 July 2016

Current

Master Plan

Financing

40

Thank you Q/A Bond Market Development Bureau 41 Public Debt Management Office, Ministry of Finance