(Sept 29): Thailand may turn to shorter-term instruments to meet the government’s borrowing needs in the fiscal year starting Oct 1, a top official said, as rising US Treasury yields drive turbulence across global bond markets.

The Public Debt Management Office is considering greater use of treasury bills, term loans and promissory notes, its director-general Jindarat Viriyataveekul told reporters in Bangkok on Tuesday. She said the agency is assessing investor demand across maturities and newly issued debt may have shorter tenors.

“This is a challenge for us, as the global market is quite volatile,” Jindarat said.

The PDMO may initially raise new funds and refinance debt using short-term instruments, then convert the borrowing into longer-term securities when market conditions become more favourable, Jindarat said. Borrowing for state-enterprise projects and programmes under emergency decrees may initially take the form of term loans or promissory notes to better match project timelines.

Thailand plans 1.26 trillion baht (RM153.1 billion) of new borrowing in the fiscal year 2027, with public debt projected to climb to 69.7% of gross domestic product. Jindarat said the debt ratio will likely peak in the fiscal year 2028 but remain below the 70% ceiling set under Thailand’s fiscal framework.

The impact of higher global yields on the government’s existing debt portfolio should be limited because about 89% of its borrowing is long-term, Jindarat said. That leaves refinancing and interest-rate risks largely concentrated in new debt issuance.

The government’s average borrowing cost remains about 2.6%, little changed from the previous year. Jindarat said she expects only a modest increase in the coming fiscal year because the volume of new borrowing is not excessively large.

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