He added that the number of people living in Pathum Thani province has seen strong growth, and the Ministry must now develop the transportation system in this area to speed the traffic flow between Bangkok and this area.

1. Banks will get smarter in the deposits war

The good times are over. In our current rising rate environment, any bank that can’t grow (or at least sustain) its deposits base will face shrinking net interest margins and a competitive disadvantage in their consumer lending businesses. Indeed, we are already starting to see signs of distress among community and regional banks that lack the advertising budgets and sophisticated digital capabilities of the big national banks.

In response to this competitive pressure, top 100 banks will invest in an area that has been neglected for too long — deposit pricing strategy. Sophisticated analytics tools, like optimisation, and the ability to rapidly deploy the models developed by those tools will give banks the ability to deliver smarter, more granular pricing, enabling them to compete effectively in this increasingly frenetic environment.

2. Banks will address the problem of silos

Digital transformers need to realise they have a silos problem.

A majority of banks are undergoing digital transformation, ranging in scope from simple channel technology upgrades to massive enterprise re-platforming initiatives. The goal is to create modern, compelling customer journeys that will differentiate the organisation from its competitors. In 2019, it will become increasingly clear that these transformation projects require more than just new technology – they also require significant organisational changes.

Siloed business units and technology stacks for credit risk, marketing, fraud and compliance work extraordinarily well for maintaining the status quo, but poorly when it comes to large-scale transformation.

Banks will increasingly recognise this and work to ameliorate the negative effects of silos as they shift from product-centric to customer-centric business strategies.

3. Emerging Payment Solutions Will Grow Up

Emerging payment solutions — mobile wallets and P2P payment networks most notably — are slowly but steadily displacing legacy payment options like cash and credit cards and cementing themselves in the day-to-day lives of consumers (particularly Millennials and Gen Zers). Big strides are already being made in Asia Pacific with mobile payment usage climbing 30 per cent in 2018, a trend that will only accelerate in the coming year.

However, the faster these new payments move, the more attention they will attract from criminals. Emerging payment solutions will become more mature in 2019 as payments executives focus on educating their customers and adapting their fraud controls to compensate for this growing threat.

Written by TIM VANTASSEL, vice president and general manager for risk of FICO.

The Thai Rice Exporters Association estimates exports will come in at 10 million tonnes in 2019, shrinking from the forecast 11 million tonnes for this year,

The association disclosed the forecast after a meeting of the Rice Policy and Management Committee that was chaired by Prime Minister Prayut Chan-o-cha yesterday.

Association president Charoen Laothammatas said those at the meeting acknowledged that the global and Thai rice environments in 2018 and 2019 were different. Thailand, as of early December, had posted exports that had so far this year amounted to 10.2 million tonnes.

Shipments of the grain in December are expected to reach 900,000 tonnes, ensuring that the target of 11 million tonnes for the year will be reached.

The lowered estimate of 10 million tonnes for next reflects the high competition among producers, particularly from India, where its government subsidises 5 per cent of export prices. The Indian rice price has also become attractive as a result of the Indian rupee’s 10-15 per cent depreciation. Adding to the pressures, major rice-importing countries such as the Philippines, Indonesia and China plan to import less next year.

Charoen said that China bought 700,000 tonnes of rice from Thailand, under a government to government agreement for a purchase of 1 million tonnes. Thailand began exports to the Philippines under a contract for the supply of 75,000 tonnes.

Commerce Ministry permanent secretary Boonyarit Kalayanamit said global rice production would drop by 3.93 million tonnes to 491.14 million tonnes in the 2018-19 production year, due mainly to drought and floods in China. Less-than-estimated rainfall in India and the Philippines’ damaged rice production from a typhoon would also contribute to the reduced global volume. In contrast, global rice consumption is forecast to rise by 6.74 million tonnes to 489.56 million tonnes due to a likely rise in consumption in a number of big countries, such as China, India and Nigeria.

For the year to December 11, India was the standout exporter with 11.37 million tonnes, followed by Thailand with 10.35 million tonnes and Vietnam, 6.06 million tonnes. Deputy Prime Minister Chatchai Sarikulya said that the Rice Policy and Management Committee agreed on a Bt1.74-billion insurance project for wet season rice growing, covering 30 million rai, in the 2019 production year.

The project will provide insurance against seven types of natural disasters, ranging from flood, drought, storm and cold weather to hail, fire, forest elephants, pests and disease. The project will apply for all regions, excluding the South, from the start of the production season to June 30 next year. In the South, it will apply from the start of the production season to December 15.

Of the total insurance premium of Bt85 per rai, farmers will pay Btt34 per rai and the government will subsidise them with Bt51 per rai. The Bank |for Agriculture and Agricultural Cooperatives (BAAC) will subsidise Bt34 per rai for its farmer borrowers who grow wet season rice in the 2019 production year.

The committee also approved a time extension to six rice sale projects that had been running from 2008-14, in line with a government policy. The remaining pledged rice – about 1.9 million tonnes – will be sold from this month to September next year.

1. Banks will get smarter in the deposits war

The good times are over. In our current rising rate environment, any bank that can’t grow (or at least sustain) its deposits base will face shrinking net interest margins and a competitive disadvantage in their consumer lending businesses. Indeed, we are already starting to see signs of distress among community and regional banks that lack the advertising budgets and sophisticated digital capabilities of the big national banks.

In response to this competitive pressure, top 100 banks will invest in an area that has been neglected for too long — deposit pricing strategy. Sophisticated analytics tools, like optimisation, and the ability to rapidly deploy the models developed by those tools will give banks the ability to deliver smarter, more granular pricing, enabling them to compete effectively in this increasingly frenetic environment.

2. Banks will address the problem of silos

Digital transformers need to realise they have a silos problem.

A majority of banks are undergoing digital transformation, ranging in scope from simple channel technology upgrades to massive enterprise re-platforming initiatives. The goal is to create modern, compelling customer journeys that will differentiate the organisation from its competitors. In 2019, it will become increasingly clear that these transformation projects require more than just new technology – they also require significant organisational changes.

Siloed business units and technology stacks for credit risk, marketing, fraud and compliance work extraordinarily well for maintaining the status quo, but poorly when it comes to large-scale transformation.

Banks will increasingly recognise this and work to ameliorate the negative effects of silos as they shift from product-centric to customer-centric business strategies.

3. Emerging Payment Solutions Will Grow Up

Emerging payment solutions — mobile wallets and P2P payment networks most notably — are slowly but steadily displacing legacy payment options like cash and credit cards and cementing themselves in the day-to-day lives of consumers (particularly Millennials and Gen Zers). Big strides are already being made in Asia Pacific with mobile payment usage climbing 30 per cent in 2018, a trend that will only accelerate in the coming year.

However, the faster these new payments move, the more attention they will attract from criminals. Emerging payment solutions will become more mature in 2019 as payments executives focus on educating their customers and adapting their fraud controls to compensate for this growing threat.

Written by TIM VANTASSEL, vice president and general manager for risk of FICO.

About 84.2 per cent of respondents said they were not ready to undertake digital transformation.

The Faculty of Economics, Thammasat University conducted a survey of 643 SMEs nation-wide on issues related to their business performance and the country’s overall economic conditions. The survey was conducted December 15-25.

On overall economic performance, respondents expected the national economy to grow by around 3.79 per cent.

They were asked about their performance in 2018 compared to what they expected at the year’s start. Their top three areas of disappointment were: investments lower than expected (52 per cent), liquidity (38 per cent) and revenue (37 per cent).

Better than expected areas of performance were: liquidity (21 per cent), profit (20 per cent), and revenue and employment (19 per cent).

The respondents were asked about their expected performance in 2019 compared to 2018. The three areas where they expected lower performance were: investment (56.0 per cent), liquidity )37.0 per cent) and revenue (33.0 per cent). Areas of anticipated better performance were: revenue (25 per cent), profit (20 per cent) and liquidity (19.0 per cent).

The three most important factors that would affect their business were the post-election political environment, the domestic economy and the world economy. However, such factors as a lack of qualified personnel as well as intense competition were also noted as important factors.

When asked about their business adjustments for 2019, 64.4 per cent said they would increase their online marketing activity; 41.1 per cent would restructure their business to become more technology oriented; 38.2 per cent would explore international market; 32.2 per cent pointed to cost reduction; 25.8 per cent would put more focus on branding; 24.1 per cent would redesigned their business models; 18.7 per cent would launched new products; 18.4 per cent pointed to staff development; 14.5 per cent would use more machinery and automation; 13.6 per cent would develop their packaging and 12.6 per cent did not have any plans.

When asked about the key challenge they faced when trying to implement digital transformation, 84.2 per cent noted the lack of clear targets for the benefit to be gained from digital transformation; 82.1 per cent were unable to choose the right technology to suit their business; and 77.3 per cent were unable to identify the benefits to be enjoyed from such transformation.

Pisit Puapan, director of the Bureau of Macroeconomic Policy under the Fiscal Policy Office (FPO) and the FPO’s deputy spokesman, said the economy is expected to further expand at a growth rate of 3.3 per cent during the quarter as domestic demands grow while exports remain steady and the number of foreign tourists increase.

The ministry is waiting for December’s economic indicators to see whether this year’s growth will reach 4.5 per cent as expected, he said.

The FPO will announce the actual figures in January .

November’s consumption expanded as reflected in the 5.2 per cent increase in domestic value added tax (VAT) and a 15.5 per cent rise in the collection of import VAT, while higher export is also expected, Pisit said.

Passenger car sales in November jumped 12.8 per cent year on year while VAT at constant prices advanced 9.6 per cent to a 4-month high. Import of consumer products climbed 9.4 per cent.

Private investment grew, led by a 26.9 per cent rise in commercial vehicle sales for the 17th straight month in a row.

On the construction front, property tax edged up 2.1 per cent and domestic cement sales increased 5.4 per cent, a rise for the seventh straight month from March.

However, Thai exports in November contracted 0.95 per cent to US$21.2 billion, led by shipments of agricultural and agro-industry products such as beverages, tapioca and canned tuna. Imports totalled $22.4 billion during the month.

The number of foreign tourists to Thailand increased 4.5 per cent to 3.18 million, led by a 44.6 per cent surge in Malaysian visitors to 41-month high. Tourism income went up 5.18 per cent to Bt167.42 billion.

Private consumption and private investment will be the major catalyst for growth, helping to offset the slowdown in external demand, they say. The expectation of clearer economic policies after Thailand’s general election should help build confidence among domestic and foreign investors, the report predicts.

Somprawin Manprasert, the Krungsri head of research and chief economist, said, “Domestic spending will play a more important role in driving the economy next year. Private consumption is likely to enter the upcycle after the capacity utilisation rate of several industries hit multi-year highs.

Driven by the acceleration of public-private partnerships (PPP fast track), the investment in infrastructure mega projects is expected to reach Bt281 billion in 2019 from Bt98 billion in 2018.

“In addition, Thailand will benefit from an increase in foreign direct investments, partly due to the relocation to avoid negative impact from the US-China trade war,” Somprawin said.

Private consumption is expected to continue its growth momentum, said Somprawin, driven by a rise in both farm and non-farm incomes, and an increase in non-farm employment. In addition, accelerating investment in mega projects, the increasing budget for welfare cardholders and several supporting projects to help specific groups including farmers, the aged and SMEs, will encourage domestic consumption and investment.

After strong growth during the past two consecutive years, Krungsri Research predicts the growth of Thai exports is likely to be moderate at 4.5 per cent in 2019, reflecting the slowdown in the global economy and the impacts of trade protectionism between the US and China.

However, Thailand could benefit from trade with high-growth countries in Asia.

Thai tourism is also likely to recover from late 2018 after the government exempted visa-on-arrival fees for tourists from 21 countries including China and India.

Moreover, the sector is expected to benefit from the rising middle class in Asia and the capacity expansion of major airports to serve the rising number of tourists.

BGrimm Power prepares for further expansion

BGrimm Power Plc (BGRIM)’s solar power development projects have made headway according to plans to consolidate its capacity build-up.

Three out of the seven ground-mounted solar farms sponsored by BGRIM for government agencies and agricultural cooperatives in Thailand, with a total installed capacity of 10.8 megawatts, were brought on line commercially and synchronised with the Provincial Electricity Authority (PEA)’s grid during December 3 to 25.

The remaining four solar farms, with a combined capacity of 20 MWs, were successfully synchronised with the Metropolitan Electricity Authority (MEA)’s system and due for commercial delivery on December 28.

With the latest addition from those seven solar farms, the SET-listed firm closed 2018 with combined capacity equity of 2,076 MWs, up by 26 per cent from the previous year, and strengthening BGRIM’s position as one of Thailand’s leading private power producers, BGRIM president Preeyanart Soontornwata said.

Meanwhile, BGRIM’s ongoing solar energy projects in Vietnam, with a total installed capacity of 677 MWs, have progressed satisfactorily in construction, said Preeyanart.

The Dau Tieng 1 and Dau Tieng 2 solar plants in Tay Ninh, in Vietnam’s southwest, and whose combined capacity of 420 MWs will make them the largest facility of its kind in Southeast Asia, have advanced by 42 per cent.

The 257-MW solar photovoltaic power project in Phu Yen province, on the south-central coast of Vietnam, is 36 per cent completed, with commercial start-up in mid-2019 now confirmed.

In view of the start-up of various new power generation projects in 2019, including the solar farms in Vietnam, the Nam Che hydropower scheme in Laos and the waste-to-energy scheme, BGRIM’s capacity portfolio may be more notable with 2,737 MW, a 34 per cent jump from 2018.

“Due to its size, finishing the RCEP negotiations is going to be the top priority for us.

As the chair of the Asean summits in 2019, Thailand has listed the completion of the RCEP negotiations as one of our 12 deliverables,” said Auramon Supthaweethum, director-general of the Department of Trade Negotiations (DTN) under the Commerce Ministry.

If negotiations are successful, RCEP will be the largest multilateral trade pact in history – encompassing China, India, Japan, South Korea, Australia, New Zealand and the 10 Asean nations.

The combined gross domestic product of prospective RCEP members accounts for up to 28 per cent of global GDP, she said, and as much as 30 per cent of the value of world trade.

The RCEP negotiations will cover 20 chapters of an agreement document, seven of which have been completed.

Thailand aims to swiftly guide the talks for the completion of the remaining 13 chapters by the end of next year, Auramon said.

Meanwhile, Thailand has begun talks with Sri Lanka, Turkey and Pakistan on arranging bilateral FTA agreements with the respective countries. “We aim to finish drafting the terms of the FTAs with the three countries by the end of 2019, and we expect the FTAs will be signed |and enacted in 2020,” Auramon |said.

“Thailand has a promising potential to expand our trade with these three countries. These are rapidly growing markets with a high demand for various Thai exports. Furthermore, Thai goods are perceived as high quality products by consumers in these countries,” she said.

Four meetings with each country

There will be at least four meetings with each country in 2019 to finalise the terms of the three bilateral FTAs.

The FTAs will address issues such as liberalising trade in goods and services, opening up markets to investors from both countries, and implementing regulations such as intellectual property protection and anti-dumping measures, she said.

Thailand primarily exports goods such as dried fish and rubber to these destinations. Thai investors in the hospitality and construction industries have also expressed an interest to invest in the three countries, according to the director-general.

Thailand’s combined goods exports to the three countries significantly exceeds the value of imports from them.

In the first 11 months of 2018, the Thai-Pakistan trade value stood at $1.58 billion (Bt51.38 billion), with Thailand exporting up to $1.386 billion (Bt45.08 billion) and importing only $194 million (Bt6.308 billion). The Thai-Turkey trade value for the first 11 months of 2018 reached up to $1.334 billion, with exports up at $1.022 billion and imports at $312 million.

Meanwhile, Thailand’s trade value with Sri Lanka was the smallest, with figures at only $482 million in trade value from January to November this year. Thailand exported $403 million while importing only $79 million worth of goods from Sri Lanka, according to the Ministry of Commerce.

The DTN has aimed for the Thailand-Turkey annual trade value to reach $20 billion in 2020, and for the Thai-Sri Lanka annual trade value to triple to $15 billion in 2020. The target trade value for |Thai-Pakistan trade has yet to be revealed.