The People’s Committee of the north central province of Thanh Hoa has submitted an official dispatch to the Ministry of Transport regarding the investment of the T2 passenger terminal and other infrastructure at the local Tho Xuan airport.

Per the official document, the province asked the Ministry of Transport to consider attracting capable businesses and investors or arrange other lawful capital sources from the state budget for the construction of the terminal and infrastructure in the 2022-2025 period.

Earlier, the locality received a notice from the Airports Corporation of Vietnam (ACV), which is managing and operating the Tho Xuan airport. The report said the investment project worth some 2.12 trillion VND (90.83 million USD) is not included in its medium-term public investment plan for the 2021-2025 period, but has been earmarked for investment after 2025. According to the project, the T2 terminal is designed to be capable of serving 5 million passengers a year.

The Ministry of Transport’s Decision No. 1136/QĐ-BGTVT dated June 12, 2020, approved a plan for the airport for the 2021 – 2030 period with a vision to 2050. The plan stipulated that the 10-year period will see the expansion and upgrade of the existing passenger terminal T1, and the construction of the T2 and a cargo terminal, with a handling capacity of 27,000 tonnes per year.  

Currently, terminal T1 is overloaded as it struggles to handle domestic routes. The terminal is not designed to handle international routes as there is no isolation area for international arrivals, entry, exit, or customs management areas.

Investment in building the T2 terminal and other infrastructure as approved for the 2021-2025 period is timely to help the Tho Xuan airport to develop, said the provincial People’s Committee. 

The Tho Xuan airport was put into operation on February 5, 2013. Its average number of passengers in the 2013 - 2015 period soared by 160% annually.

The T1 terminal was opened in January 2016, capable of handling 1.2 million passengers a year. In the 2016 - 2020 period, the airport’s passenger throughput grew by 17% on an annual average. In the first five months of 2022, the terminal received 671,000 arrivals, projected to hit 1.4 million by year’s end.

SSC eyes prompt detection of suspicious transactions

The State Securities Commission (SSC) has said it will intensify the monitoring of the stock market to promptly detect suspicious transactions in the remaining months of the year.

Restructuring the market and completing the legal framework and policies for the market development in a public, transparent, and disciplinary manner are also considered important tasks.

In recent months, Vietnam's stock market has experienced periods of deep declines. In the second quarter of 2022 alone, the market faced sharp downward corrections. On June 30, the VN-Index and HNX-Index reached 1,197.6 points and 277.68 points, down 20.1% and 41.4% compared to the end of 2021, respectively.
 
Market liquidity tended to decrease, resulting in the average trading value in the second quarter hitting 20.49 trillion VND (877.21 million USD) per session, down 34.27% from the average in the first quarter.

However, according to the SSC, since the beginning of the year, the average trading value of the stock market reached 25.44 trillion VND (1.08 billion USD), an annual reduction of only 4.4%.

A good level of market liquidity has been maintained, while the record number of new accounts opened and the net buying of stocks by foreign investors show that the market is still receiving interest from domestic and foreign investors, said the SSC.

Dispute settlement moves slowly due to missing contract details
     
When disputes over credit contracts arise, banks normally bring the disputes to court for settlement. However, insiders have said that legal action does not help much as contracts have not been completed fully in the first place.

A representative from a commercial bank revealed that one major reason for unresolved disputes in court is that the address of the sued party cannot be found in the contracts.

Without such material provision, the contracts are regarded as unqualified for hearing, leaving the court no choice but to dismiss the case.

Sometimes the court asks the suing party to add the sued party’s verified address to the contracts to make those contracts qualified for hearing, but it is not easy to get verification from local police.

"Local police normally refuse to verify the address, saying that they only give the verification at the request of state agencies,” the representative said.

Nguyen Ngoc Thanh, a representative from the Provincial People’s Court of Ha Noi, said that in many cases borrowers are unsuitable for bank loans from the outset of contracts, but regardless banks still grant the loans to the borrowers.

This failure to adequately evaluate borrowers' financial situation beforehand leads to subprime loans, which eventually result in disputes in court. Thanh urges banks to set the bar high for bank loans to nip disputes in the bud.

The representative also said it is the job of the court to have the address verified by local police, but some judges pass the responsibility on to banks, to move the legal process along faster. The practice seems time-saving but is procedurally wrong.

"Some judges are concerned that the legal process would move slowly should the court itself has to have the address verified," Thanh said. "Accordingly, they require banks to do so instead. That requirement is not right procedure-wise."

Another bank representative asserted that borrowers are normally required to put up collateral to be eligible for bank loans. If the collateral is land lots, banks register the names provided in land-use-right certificates as owners of the realty properties.

Unfortunately, when disputes arise between the registered owners and previous owners over land use rights, the court rules that banks failed to determine collateral owners beforehand and request the return of land-use-right certificates.

The ruled failure constitutes a legal ground for the court to declare banks' collateral-related contracts null and void.

Nguyen Thanh Long, chairman of the Legal Club under the Vietnam Banks' Association, underscored three groups of issues that have been holding back dispute settlement in court.

The three groups of issues are; issues arising from the difference between legal perception and actual laws, issues related to legal procedures, and issues related to the determination of civil liability in criminal cases.

The chairman recommends the court rely on the regulations on bonafide third parties under the Civil Code 2015 to deal with cases where disputes between registered owners and previous owners arise.

Deputy PM demands appropriate moves be made to avoid economic shocks

Deputy Prime Minister Le Minh Khai requested appropriate measures be taken to guarantee macro-economic stability and control inflation to avoid economic shocks while maintaining normal production and business activities and ensuring people’s jobs and income.

Addressing a teleconference on July 7 to review the six-month implementation of financial - budgetary tasks, the Deputy PM highlighted the year-on-year GDP growth of 6.42% in the first half of 2022, compared to 5.74% in the same period last year, with the second-quarter pace of 7.72% being the fastest since 2011.

Macro-economic stability was sustained while major balances kept and inflation under control, he said, noting that the consumer price index (CPI) rose 2.96% in Q2 and 2.44% in H1, relatively low compared to the same periods of pre-pandemic years.

This was the result of enormous efforts amid surging inflation in many countries, he added.

Thanks to achievements in the socio-economic recovery and development process, Vietnam was one of the two Asian-Pacific economies to have its long-term sovereign credit rating raised to “BB+” with a “stable outlook” by S&P.

Budget collection reaches 66.7% of yearly estimates

Revenues of the State budget in the first six months of this year stood at about 941.3 trillion VND (40.3 billion USD), equivalent to 66.7% of the yearly estimates, it was reported at the Finance Ministry’s review conference on July 7.

State budget spending in the reviewed period was estimated at 713 trillion VND, or 40 percent of the yearly estimates.

The Finance Ministry has timely proposed the promulgation of policies on exempting, reducing and rescheduling tax, land rents and fees to ease difficulties for and support businesses and the people, with a total value of around 39.8 trillion VND.

State management of the financial, securities and corporate bond markets has been strengthened, while price and market control has been aligned with realities to remove difficulties for production-business activities and people’s life.

However, the ministry noted the complicated situation related to tax evasion and frauds in digital platform-based business, e-commerce and cross-border business.

Besides, the allocation of state budget and disbursement of public investment capital remain slow, failing to stimulate economic growth.  

The divestment of State capital in State-owned enterprises failed to meet schedule, affecting budget collection.

Vietnamese passion fruit enters Chinese market via official channels

The General Administration of Customs of China has granted approval for the import of Vietnamese passion fruit on a pilot basis as of July, heard a conference on July 7.

Luong Ngoc Quang, an expert from the Department of Plant Protection, said that the Vietnamese Ministry of Agriculture and Rural Development (MARD) and the General Administration of Customs of China have reached an agreement aimed at imposing phytosanitary measures to export fresh passion fruit from the nation to China on a pilot basis starting from July.

The northern neighbour only permits the export of the fruit product via seven border gates, adding that the export of passion fruit will take place at all border gates following the two sides signing an official protocol, he said.

The representative from the Plant Protection Department noted that that passion fruit orchards and packaging facilities must be registered with the MARD, with all growing areas being required to abide by the Good Agricultural Practices (GAP).

HCM City textile, garment and footwear industries face labour shortage

HCM City is facing a serious shortage of labour in the textile and garment and footwear industries since many workers have been moving to others due to low incomes.

Thành Công Textile Garment Investment Trading JSC has been trying to hire workers to expand its production, but is struggling to do it since its salaries and bonuses are not considered high enough.

Nguyễn Hữu Tuấn, its human resource director, was quoted by VnExpress newspaper as saying workers do not consider the textile and garment industry attractive any more.

Many of the company’s workers have switched to other, higher paying jobs, while many are also moving out of the city due to rising expenses, he said.

“Finding new textile and garment workers is very difficult… The lack of workers is preventing factories from reaching their full production capacity. Production lines with new workers are also not productive since they are still inexperienced.”

Phan Thị Minh Thu, deputy director of Vĩnh Phong Footwear Co., Ltd., said the number of workers at its factory has dropped from over 1,000 to 300 in the last two years, and it is also having problems finding replacements.

The business is unable to get new customers since it lacks workers to take in new orders, she said.

Textile and garment and footwear, among Việt Nam’s most labour-intensive industries, are facing labour shortages after COVID amid high demand for goods, with some losing hundreds of workers every year.

In HCM City alone, the two industries have more than 20,000 new vacancies annually but can only find 1,000 in recent years.

Nguyễn Thị Thủy, deputy chairman of the Việt Nam Textile and Garment Labour Union, said businesses are getting plenty of new orders but lack labour, and so could only accept small orders.

Factories are struggling to employ young workers, while existing workers are usually well over 40 and could not find other jobs, she said.

“Businesses have been investing in new technologies to fulfil orders, but skilled staff to operate such machinery are also hard to come by.”

The textile and garment and footwear industries have high export revenues and contribute greatly to the economy, but in recent years universities and colleges have not been churning out enough graduates to meet their demand, she said.

Lê Duy Bình, CEO of economic development agency Economica Việt Nam, said there is a trend of workers leaving the two industries to pursue jobs in other well-paying industries such as electronics and tourism.

They would have to restructure and stop relying on cheap labour like now since that would no longer be available.

The current labour shortage would force them to focus more on production stages with high added value such as raw materials, designing and brand building, he said.

In 2021 HCM City had over 376,000 workers in the two industries, accounting for 13 per cent of the total number in the city. 

Herbal medicine companies enjoy positive earnings thanks to stable inputs
     
Herbal medicine companies are enjoying huge profits per year thanks to stable input costs compared to other industries.

According to a recent report by SSI Research, herbal medicine businesses are less affected in a high inflation environment, with stable input costs compared to other industries. From the financial statements of listed pharmaceutical companies in Viet Nam, the average input cost of most pharmaceutical companies remains at a similar proportion, of which 60 per cent is the cost of raw materials.

Although the cost of raw materials accounts for the largest proportion, it is divided into many different types of active ingredients and pharmaceuticals. As a result, the cost composition of the final products will be very fragmented, unless there is a significant disruption in the supply chain of the raw material.

The opening of international flights helps speed up M&A deals. Therefore, SSI said that Vietnamese listed pharmaceutical companies with a consolidated shareholder structure and the attention of foreign investors will have a high valuation, creating a safe investment channel for investors in the current volatile market period.

Among the herbal medicine companies, Traphaco JSC (TRA) has always maintained its leading position in terms of profit for decades. The typical pharmaceutical brands that Traphaco owns are Boganic, Hoat Huyet Duong Nao (nourishing brain), Tottri and Ginger Tea. In 2021, Traphaco's revenue reached VND2.16 trillion, profit after tax totaled VND264 billion (US$92.4 million), an increase of 22 per cent compared to 2020 and was the highest profit ever.

The company attributed the rise in profit to strengthened financial management through budget planning, reducing inefficient and wasteful costs, and allocating adequate costs to promote business activities, ensure the completion of the annual profit plan, rising sales of key products, and good profit margins. Traphaco's earning per share (EPS) in 2021 was VND5,177, higher than OPC Pharmaceutical JSC (OPC) with EPS of VND4,742.

In second place was OPC Pharmaceutical JSC (OPC), in 2021, OPC's net revenue reached VND1.12 trillion, up 17 per cent over the same period last year, the highest ever. Profit after tax touched a record of VND123 billion, up 20 per cent year-on-year.

Foripharm this year ranked third after OPC Pharmaceutical JSC (OPC). In terms of revenue, Foripharm earned around VND400 billion in 2021. In the last two years in 2020 and 2021, Foripharm's gross profit margin has always stayed at 69 per cent. Foripharm attributed the high profit margin to high proportion of sales of self-manufactured goods, accounting for over 90 per cent. Foripharm's dividend payout ratio was also the highest in the industry with a cash dividend of 60 per cent in 2021 and a plan of 40 per cent for 2022.

Nam Duoc JSC has multiple well-known products derived from traditional herbal medicines such as Thong Xoan Tan, Nam Duoc Cough Medicine and Diabetna. In 2021, despite many difficulties due to the COVID-19 pandemic, NDS still reported good business results, especially in the last six months of the year when the demand for products rose.

Nam Ha Pharmaceutical is well known for its cough medicine products and Nam Ha cough syrup. Although the charter capital is only VND52 billion, the company's revenue for the last four consecutive years was approximately VND1 trillion per year. However, the profit stayed low, in 2021 the company achieved a profit of VND30 billion.

Tra fish exports expected to beat target
     
The Viet Nam Association of Seafood Exporters and Producers (Vasep) is optimistic about tra fish exports this year with a substantial demand recovery in import markets.

The association predicted that tra fish export would beat the target of US$1.6 billion set at the beginning of this year to finish at $2.6 billion.

Tra fish processing plants were at full capacity in the first half of this year for export orders, Vasep said, adding that the export value reached more than $1.4 billion in the first six months of this year, representing a rise of 83 per cent against the same period last year.

Inflation and the Russia - Ukraine conflict provided the opportunity for Viet Nam to expand tra fish export to the EU, the US and the UK markets which faced with severe shortages of white fish due to sanctions on Russia.

Tra fish export to the UK jumped by six times over the same period last year while to Spain nearly tripled. Other markets which saw fast growths included mainland China, Hong Kong (by 124 per cent ), the US (by 131 per cent) and France, Holland, Germany and Belgium by around 45-90 per cent.

Viet Nam’s tra fish has been exported to 117 markets, including five new markets since the first quarter of 2021.

In mid-May, the Food Safety and Inspection Service under the US Department of Agriculture recognised six more Vietnamese tra fish processing factories to be eligible for exporting their products to the US market, bringing the total number of eligibility-recognised factories to 19.

Tra fish export to the US remained promising, Vasep said, citing statistics of the International Trade Centre that frozen tra fish prices of Viet Nam in the US hit a new record of nearly $5 per kg, about $2 higher than the same period last year. This was also the strongest increase in the past three years.

As for Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) markets, tra fish exports to Mexico, Canada, Australia, and Japan were robust in the first six months of this year, reaching $170 million, up by 64 per cent against the same period last year.

According to Truong Thi Le Khanh, chairwoman of the Board of Directors of Vinh Hoan Joint Stock Company, with the rising demand for tra fish in the US, Europe and China together with the COVID-19 pandemic now under control and the shortage of supply, 2022 would be “very magical” for the tra fish industry with all factories to be profitable.

Tra fish prices would keep increasing till the end of this year, bringing profits to tra fish producers and exporters, although costs such as feed and logistics increased.

A recent report by BIDV Securities Company (BSC) said that Viet Nam’s tra fish industry was entering a growth period after two years of a downtrend due to the impact of the COVID-19 pandemic and the disruptions of the supply chain in 2020-21.

Tra fish import demand would increase significantly until the end of the year, after a long time pressed by the pandemic, BSC said.

BSC said that the US demand for tra fish would increase strongly as the US faced a shortage of domestic catfish supply, which had been the impetus for Viet Nam’s tra fish export from the end of 2021.

As for the Chinese market, BSC believed that China would gradually reopen with a huge consumption demand which had been pent-up during the past two years as the impact of the pandemic, China would be an important market for tra fish export expansion.

Tra fish export was estimated at $1.54 billion in 2021.

Industrial production up 8.48 per cent in H1
     
The index of industrial production (IIP) in the first half of this year surged 8.48 per cent over the same period last year, according to the General Statistics Office (GSO).

The GSO said that the IIP in the second quarter also saw a positive increase of 9.87 per cent year-on-year as many industrial firms have resumed and gradually recovered their business activities.

During the six months, the processing and manufacturing industry posted the highest industrial output growth of 9.66 per cent. It was followed by electricity generation and distribution (6.51 per cent), electricity production and distribution (6.1 per cent) and the mining industry (2.28 per cent).

Key industries that recorded high increases in H1 include clothing, up 23 per cent; electrical equipment (22 per cent); pharmaceutical and medical materials (17.5 per cent); leather (13 per cent); and electronics, computers and optical products (11 per cent).

On the contrary, several industries saw a decline in industrial production, such as repair, maintenance and installation of machinery and equipment, down 11 per cent; rubber and plastic products (8.5 per cent); coke and refined petroleum products (1.4 per cent) and crude oil and natural gas (1.2 per cent).

Several key industries recorded high growth in the period, including clothes (up 22 per cent); electricity equipment (20.4 per cent); leather and leather products (13.5 per cent); electronics, computers and optical devices (11.6 per cent); and metal production (11.5 per cent).

The GSO also named key industrial products with strong IIP increases, including telephone components with 22 per cent; beer (14 per cent); urea fertiliser (13.5 per cent); processed seafood and automobiles (12 per cent) and clean coal (10 per cent).

Some products decreased compared to the previous year, such as televisions (18 per cent); aquatic feed (7 per cent); mobile phones (4.3 per cent); NPK fertiliser (4 per cent) and motorbikes (3.5 per cent).

From January to June, the IIP rose in 61 out of 63 provinces and cities, with significant growth seen in several localities, which experienced a strong recovery in the manufacturing and processing industry thanks to the successful containment of COVID-19 such as Bac Giang (46 per cent); Lai Chau (45 per cent); Quang Nam (25 per cent) and Ha Giang (24 per cent).

According to the GSO, the consumption index of the processing and manufacturing industry in H1 rose 9.4 per cent compared to last year's corresponding period. In June, the index dropped 1 per cent month-on-month and advanced 9.4 per cent year-on-year.

The average inventory rate of the processing and manufacturing industry in the six months was 78 per cent, much lower than the 92 per cent recorded in the same period last year, the GSO noted.

As of June 1, the number of employees working in industrial enterprises rose 1.3 per cent over the previous month and 5.8 per cent compared to the same month last year.

The number of employees in State-owned enterprises decreased 4.8 per cent year-on-year, while those in non-State firms slumped 0.3 per cent, and those in foreign-invested businesses increased by 7 per cent.

Manufacturing sector expansion

According to S&P Global, the Vietnamese manufacturing sector ended the first half of 2022 firmly in expansion mode as a lack of disruption from the COVID-19 pandemic supported demand and production.

Firms were also increasingly successful in hiring additional staff, with the rate of job creation quickening to a three-and-a-half-year high, S&P Global said in a report released last week.

Further marked increases were seen in both output and new orders at the end of the second quarter, as relative market stability due to a lack of pandemic disruption enabled demand to grow, adding that rates of expansion were particularly pronounced in the consumer goods category.

Rising new orders encouraged manufacturers to expand workforce numbers again during June, extending the current sequence of increasing staffing levels to three months.

“The Vietnamese manufacturing sector ends the first half of 2022 in good health, with firms feeling that they've seen the back of the pandemic and can generate new business at a solid rate," Andrew Harker, Economics Director at S&P Global Market Intelligence, said.

The country's Manufacturing Purchasing Managers' Index (PMI) posted 54.0 in June, down slightly from 54.7 in May but still signalling a solid monthly improvement in the health of the sector, according to S&P Global.

International organisations hail Viet Nam’s economic achievements
     
HSBC has raised its forecast for Viet Nam’s economic growth this year to 6.9 per cent, from the previous prediction of 6.6 per cent, which is possibly the fastest pace in the region.

In the Viet Nam At A Glance report in July, HSBC Global Research noted that decreasing risks posed by the Omicron variant and eased restrictions have paved the way for Viet Nam to return to normality.

Thanks to widespread recovery, the country recorded an impressive GDP growth rate of 7.7 per cent in the second quarter compared to the same period last year. The service sector, which has suffered severe economic impacts, have bounced back strongly while manufacturing has continued growing and exports hit historic highs.

However, the growth forecast for 2023 was revised down to 6.3 per cent from 6.7 per cent due to growing risks, especially in the energy sector, according to the bank.

HSBC Global Research pointed out growing impacts of soaring energy prices. Escalating goods prices have led to a trade deficit in Q2 and may worsen the current account situation, which is already pessimistic. On the other hand, though household consumption has recovered steadily, people’s budgets may suffer from high oil prices, thus decelerating the recent recovery speed.

Viet Nam’s inflation is forecast to stand at about 3.5 per cent this year, but it may surpass the ceiling of 4 per cent between Q4 of 2022 and Q2 of 2023, requiring the State Bank of Vietnam to begin normalising monetary policy.

According to the report, Viet Nam has benefited from its economy reopening, and domestic demand has returned while external drivers remain favourable. However, it is necessary to stay alert to increasing growth risks, especially those posed by surging energy prices.

Meanwhile, the Executive Board of the International Monetary Fund (IMF) has highly valued Viet Nam’s policy support to cushion the impact of COVID-19 in tandem with successful maintenance of fiscal, external, and financial stability and an impressive vaccination rollout.

In a press release following a recent consultation with Viet Nam, the IMF Executive Board said a recovery is underway and high frequency indicators point to stronger momentum going into 2022, with rising retail sales, industrial production, and firm entry. Growth is expected to reach 6 per cent in 2022 as activity normalisation continues and the programme for recovery and development is implemented.

However, the recovery of the labour market is lagging as underemployment remains high. While inflation has recently picked up due to rising commodity prices and supply-chain disruptions, it remains well below the central bank’s inflation ceiling.

The Executive Board called for agile policy making, proactively adjusted to the pace of the recovery and evolution of risks.

They also underscored the need for fiscal policy to take the lead and be flexibly adjusted to evolving economic conditions. They welcomed the programme for recovery and development and emphasised the importance of targeting, spending efficiency, and steadfast implementation.

The IMF executive board stressed the need for monetary policy to be nimble and vigilant of inflationary risks. They also emphasised the importance of addressing problem loans, normalising regulatory forbearance in a timely fashion, and closely monitoring real estate sector risks.

They welcomed Viet Nam's recent steps towards greater exchange rate flexibility and monetary policy modernisation and encouraged continued efforts in this direction.

The board stressed the importance of structural reforms to improve the business environment, enhance productivity, and boost potential growth. They also praised Viet Nam’s ambitious environmental agenda and urged the translation of targets into concrete policy actions. 

Taxman wants Thu Thiem land auction results cancelled

The HCMC Tax Department has proposed cancelling the results of the Thu Thiem land auctions held late last year, citing the failures of the auction winners to make payments as regulated.

The taxman said the Department of Natural Resources and Environment should request the city government to make decisions scrapping the auction results of four land lots in Thu Thiem New Urban Area.

There were four companies winning the land auctions in December last year. Two of them – Viet Star, a unit of Tan Hoang Minh Group, and Binh Minh Trading and Development Investment Co. Ltd. – later dropped their winning bids.

The two other winning companies – Dream Republic and Sheen Mega – pledged to proceed with the payments of land use and registration fees for the two lots of land. However, 180 days have passed since the fee amounts were announced and no payments have been made though the HCMC taxman has repeatedly reminded them of the payments.

The tax department has also asked the city government for guidance to deal with the deposits, equivalent to 20% of the reserve prices, placed by the four companies.

In April, the tax department rejected the requests of Dream Republic and Sheen Mega to pay land use fees by monthly instalment.

Later the two companies wrote to the taxman promising to pay at least VND100 billion each by April 30 as a goodwill gesture. But they broke their promises again.

On December 10 last year, Dream Republic won the auction for the 6,400-square-meter land lot coded 3-5. The firm would have to pay a land use fee of VND3.82 trillion and a registration fee of VND500 million for the lot.

Sheen Mega, which won the auction for the 8,600-square-meter land lot coded 3-8, is subject to a land use fee of VND4 trillion, but exempt from the registration fee.

Viet Star Real Estate Investment Co., Ltd, and Binh Minh Trading and Development Investment Co., Ltd., won the auctions of the lots coded 3-9 and 3-12. Binh Minh would have to pay a land use fee of more than VND5 trillion and Viet Star VND24.5 trillion, and their respective registration fee was VND500 million.

Gov’t directs to maximise effectiveness of interest rate aid programme
     
Agencies need to work to ensure the success of the interest rate aid programme and optimise its effectiveness, Deputy Prime Minister Le Minh Khai said on Wednesday.

During an online conference to implement the Government's Decree 31/2022/ND-CP on interest rate support from the State budget for loans of enterprises, co-operatives and business households, Khai said the large-scale programme is implemented nationwide and expected to have a positive impact on the whole economy. Therefore, he required the State Bank of Vietnam (SBV) to coordinate closely with other ministries and agencies to regularly monitor and evaluate the results of the programme’s implementation.

Commercial banks must step up the interest rate support in accordance with the regulations, Khai said, adding relevant ministries and agencies, such as the ministries of Planning and Investment, Finance and Construction, must directly participate in the programme’s implementation.

The SBV must promptly propose feasible solutions to remove obstacles and create favourable conditions for the implementation so as to maximise the effectiveness of the programme, Khai said.

According to SBV’s deputy governor Dao Minh Tu, the programme is a large-scale policy with the participation of many commercial banks. The programme uses the State budget to help reduce the loan costs for enterprises, cooperatives and business households in order to help them overcome difficulties to stabilise and develop production and business. Therefore, the policy implementation must ensure fairness, publicity and transparency to identify the right beneficiaries.

The beneficiaries of the policy are enterprises, cooperatives and business households in aviation, transportation, warehousing, tourism, accommodation and catering services, education, agriculture, forestry, fishery, manufacturing and processing industry, software and computer programming, information services, and developers of social and worker housing.

Under the programme, the State budget shall fully and promptly allocate funds for interest rate support of 2 per cent per year for commercial banks to provide interest rate support to customers.

Commercial banks will stop supporting interest rates after December 31 next year or when the funding source runs out, whichever comes first.

The interest rate support period is from the date of loan disbursement to the time when the customer pays off the loan principal and/or interest as agreed between the commercial banks and the customers, in line with the funding source for interest support rates announced, but not exceeding December 31 next year.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes