VIETNAM'S BUSINESS NEWS HEADLINES JULY 17

20:17

Central province to call for PPP investment in airport and sea port

A cargo ship docks at Chu Lai-Truong Hai Port in the Chu Lai Open Economic Zone in the central province of Quang Nam. The province has called for investment in airport and sea port system under the PPP model.

The central province has proposed a Private-Public-Partnership (PPP) model for calling on investment from the private sector in two key projects – the Chu Lai Airport and sea port systems in the near future.

Chairman of the province Le Tri Thanh told Viet Nam News the proposal was made at a meeting with the ministry last week, stating the investment will be put up at auction following the Law on PPP recently approved by the National Assembly.

Thanh said the PPP model would help ease the burden on the State budget, while promoting the effectiveness of management over airport and sea port systems in the future.

He said the Chu Lai Airport would be expanded to 3,000ha and serve as a key logistics centre for Southeast and South Asia with a radius of 3,000km flying zone.

Following a master plan approved by the Prime Minister in 2018, Chu Lai Airport would handle five million passengers and 4.1 million tonnes of cargo in 2030.

The sea port system including Chu Lai and Ky Ha ports have been planned for hosting 50,000-DWT (deadweight tonnage) ship with a total of 12.7 million tonnes of cargo per year from 2030.

The provincial sea port system would receive cruise ships promoting tourism at UNESCO-recognised world heritages of Hoi An; the My Son Sanctuary and the world biosphere reserve Cham Islands-Hoi An site.

Chu Lai airport, which now hosts eight daily flights with nearly 1.5 million passengers per year, will be improved as an international airport with two runways, two terminals for both passengers and cargo, and a maintenance centre from 2020-25 and beyond.

The province, in co-operation with local carriers and partners, had proposed a plan for development of the airport with a fund of US$111 million in three phases.

The airport’s full development plan would allow big aircrafts including Airbus A350 and Boeing 787, while boosting air travel from HCM City and Ha Noi to the Chu Lai Open Economic Zone (OEZ) in Quang Nam and Dung Quat Economic Zone in Quang Ngai Province.

The local Truong Hai Automobile Company (Thaco) officially launched the Chu Lai-Incheon, Korea sea route for hosting textiles, automobiles, logistics experts, exports and investment flows from Korea and Japan in the province from 2018.

The province has been speeding up procedures and boosting the construction plan of the sea port and airport projects serving investors at the Chu Lai OEZ – which is a destination of 158 investors with total investment of $4.5 billion./.

Bac Giang aims to welcome 2 million tourists this year

The northern province of Bac Giang is launching a range of tourism stimulus packages to draw in more than 2 million visitors in 2020.

Local authorities will focus from now to the end of the year on directing relevant agencies to speed up investment projects in tourism, especially spiritual tourism, eco-tourism, cultural and historical tourism, entertainment tourism, and agriculture-linked tourism.

It is also working to increase links with neighbouring cities and provinces such as Hanoi, Quang Ninh, Bac Ninh, Hai Duong, Thai Nguyen, and Lang Son.

The province has already developed community-based tourism this year, in Son Dong, Yen The, and Luc Ngan districts, while promoting tours to popular destinations such as the Truc Lam Zen Buddhist area in the Tay Yen Tu region.

Affected by the COVID-19 pandemic, the number of tourists to Bac Giang in the first half was estimated at 502,000, a year-on-year decline of 67.7 percent.

To overcome the difficulties, Bac Giang launched a programme stimulating domestic travel, completed a tourism connectivity map between itself and Bac Ninh and Hai Duong, and allowed 70 businesses to open tours exploring the sacred land of Tay Yen Tu./.

Ministry to support industrial sectors to enhance production growth

The Ministry of Industry and Trade (MoIT) will focus on removing difficulties in industrial sectors in the second half of this year, especially the processing and manufacturing industry, to expand production and business.

It plans to work closely with foreign-invested firms such as Samsung and Toyota and search for local producers to make raw materials and components to replace imports.

The ministry has suggested localities develop material production regions, industrial parks and economic zones to ensure they have raw materials for domestic production.

It will also propose preferential policies for the textile and footwear industries as well as other sectors that have suffered greatly from the COVID-19 pandemic. It will build incentive mechanisms for the production of materials for those sectors.

The MoIT predicts that in the second half of the year, the domestic electronics industry will still be greatly affected by the pandemic that could reduce demand for electronic products in the US and Europe.

Samsung Vietnam is expected to reduce its export target to about 45.5 billion USD, lower than the export value of 51.38 billion USD in 2019.

However, the ministry observes that many countries worldwide have highly appreciated Vietnam's disease control. This is considered an important factor to attract more foreign investment into Vietnam after the pandemic ends. That will help Vietnam boost growth in production and exports in the future.

The MoIT reported the index of industrial production (IIP) in June increased by 10.3 percent compared to the previous month. Of which, the IIP rose by 13 percent in the processing and manufacturing sector, 6.5 percent in the electricity production and distribution, and 4.4 percent in water supply and wastewater treatment compared to the same period in 2019.

Meanwhile, the index of the mining industry in June decreased by 3.7 percent from a year prior.

During the first six months of this year, the national IIP increased by 2.8 percent compared to the same period last year. The index surged by 4.6 percent for the processing and manufacturing industry and 2 percent for the electricity production and distribution.

There were many difficulties in importing material from China in the first six months, especially in the electronic sector, the ministry said, but with a reasonable balance of production and business, the electronic sector gained growth in the IIP and exports compared to the same period of 2019.

The IIP for electronic products, computers and optical products in June increased by 29.3 percent over the previous month and by 21.7 percent over the same period last year.

This index for the first six months rose by 9.8 percent year-on-year. It was higher than the growth rate of 3.5 percent in the first six months of 2019./.

HCM City develops supporting industries

Global cordless power equipment and floor care company Techtronic Industries Co. Ltd. (TTI) earlier this month organised its first-ever Vietnam supplier workshop together with the Saigon High-Tech Park to look for local suppliers for its manufacturing facilities in Viet Nam.

TTI has a number of small factories in Binh Duong Province and will begin construction of its largest in Viet Nam along with an R&D centre at the SHTP before December this year.

Nate Easter, executive vice president of global sourcing and outdoor products operation for the company, said: “Armed with the tremendous support from SHTP and the local government, we are glad to have chosen SHTP as the location of our new plant in Viet Nam. It has favourable access to a vast pool of talent, high-quality suppliers and a strong commitment from the government and public administration, fully supporting TTI’s current and future development plans at the SHTP.

“Right now our local content is around 38 per cent. Our goal is to achieve over 60 per cent by the end of this year and 85 per cent by 2024.”

Phan Thuc Dinh, the company’s supply chain OPEX associate manager, said “Vietnamese suppliers basically satisfy TTI’s requirements but have weaknesses in terms of system management.

“TTI has a team that supports domestic suppliers to enable them to fulfill all requirements to join TTI’s supply chain.”

In the past year the company has developed nearly 100 suppliers in Viet Nam, and it wants to find more local suppliers to serve its future business growth, he said.

Nguyen Anh Thi, head of SHTP’s management board, said: “Faced with an interruption in feedstock imports due to the Covid-19 pandemic, many foreign companies are increasingly seeking local sources.

“This will be an unprecedented opportunity for local firms in the supporting industries to enter the supply chains of foreign firms.”

According to its Department of Industry and Trade, HCM City has in recent years adopted many mechanisms and policies to back supporting industries, including programmes to connect local suppliers with foreign manufacturers.

Le Nguyen Duy Oanh, deputy director of the department’s Centre for Supporting Industries Development (CSID), said it is not too difficult for local firms to meet quality standards to enter global supply chains, and the only question is if their managements really want to transform.

“Many foreign corporations are committed to sending experts to enable Vietnamese enterprises to improve their production capacity. Since 2018 the CSID has co-operated with foreign companies to help local firms to improve production capacity, reduce the rate of defective goods and mitigate weaknesses in their management.

“As a result, more than 30 city companies have joined the supply chain of Samsung, Schneider, Sony, Honda, Sanyo, and other companies.”

In addition to support from authorities, local suppliers are also constantly striving to improve their capacity to enable them to integration deeper with the global value chain.

A Tuong Vinh Company executive said his firm has a 40,000sq.m factory with 1,000 engineers and workers for manufacturing supporting industrial products.

Its main product is the motor, the heart of all machines, and it is now participating in the supply chains of many companies from Japan, South Korea and Europe, he said.

It is preparing to build a second factory on the same scale, he said, adding that by joining in TTI’s supplier workshop, the company sought to supply motor products for TTI’s equipment and machinery.

The number of city firms that supply foreign companies’ global supply chain has increased significantly.

For instance, Lap Phuc Precision Mold Company is supplying precision mould products to Colgate, Hiep Phuoc Thanh and Minh Nguyen have become vendors for Samsung, and Thong Nhat and Amura Precision make plastic components for tier 1 and 2 suppliers of automobile companies, among others, the Department of Industry and Trade said.

According to foreign companies, Vietnamese firms have made great progress in the manufacture of industrial supporting products, it added.

Many Vietnamese companies confidently introduce their products to foreign firms, and not just simple products like screws, moulds and plastic packaging, but also high value-added products such as motor cores, electronic chips and circuit boards.

To promote the development of supporting industries, the Department of Industry and Trade is drafting an investment stimulus programme for 2021 – 25 for supporting industry enterprises to improve production technologies and equipment and make more products meeting global corporations’ requirements and entrench themselves in global supply chains.

Supporting industries are key to raising the value of the industrial production, and promoting them is vital to attracting more giant foreign investors to the city, Thi added./.

Long Son PIC to raise capital for new industrial park project

Long Son Petroleum Industrial Zone Investment JSC (Long Son PIC) will issue a total 82.5 million new shares seeking funding for its project in Ba Ria-Vung Tau Province.

Long Son PIC will sell 65 million shares to Gelex Energy, a member of the Vietnam Electrical Equipment JSC (Gelex), and 17.5 million shares to Viglacera Yen My-Hung Yen Industrial Zone Development JSC.

The deal is expected to be complete by the end of the year. Long Son PIC will increase its total shares to 165.2 million from the current 82.7 million.

Gelex Energy will be the biggest shareholders at Long Son PIC with a 48.91 per cent holding.

Gelex and related shareholders have 19.1 million shares or 23.1 per cent of Long Son PIC’s capital.

Gelex’s energy arm on June 5 bought more than 15.8 million shares, or a 19.1 per cent stake, in Long Son PIC. Gelex previously held 3.3 million shares or 3.95 per cent stake.

The company expects to raise VND825 billion (US$35.68 million) to develop the Long Son Industrial Park. The IP project demands total investment of VND29.6 trillion and construction will be carried out in three stages.

Investment for the three stages will be VND11.76 trillion, VND10.45 trillion and VND7.4 trillion, respectively.

Long Son PIC wants to raise capital for the project as it now has only VND810.4 billion worth of capital, which is not enough to conduct the project.

The firm needs to increase its capital in the project to minimum 15 per cent.

Long Son PIC eyes a four-fold increase of total revenue in 2020, which may reach VND146.2 billion. Post-tax profit is expected to climb to VND28.2 billion from a loss of VND2.1 billion in 2019.

Long Son PIC shares (UPCoM: PXL) stood firm at VND11,000 apiece on Monday, having risen total 4.76 per cent since the beginning of July.

Gelex shares (HoSE: GEX) gained 2.2 per cent to close Monday at VND20,500 apiece. The electrical equipment firm’s shares have soared 26.5 per cent since June 29.

If the share issuance completes, Gelex will take one more step to enter the industrial real estate sector.

The Ha Noi-based company has recently offered to buy 95 million shares and raise its ownership to 46.15 per cent at industrial group Viglacera, which owns 5,000 hectares of IPs in the North.

Viglacera’s board of directors on July 7 approved the deal./.

SSI Securities to pay cash dividend at rate of 10 per cent

SSI Securities Corporation (SSI) plans to pay a 2019 dividend in cash at a rate of 10 per cent.

This means every shareholder will receive VND1,000 for each share they hold.

Payment time is scheduled for July 31 this year. SSI will spend about VND600 billion (US$25.9 million) on this dividend payout.

In 2019, SSI achieved more than VND3.3 trillion of consolidated net revenue. Pre-tax profit reached VND1.1 trillion and post-tax profit totalled more than VND907 billion.

As of the end of 2019, SSI Securities had more than VND2.94 trillion of undistributed post-tax profit. The company also had VND392 billion in a financial reserve fund and VND477 billion in a reserve fund to supplement charter capital.

In 2020, SSI Securities aims to achieve VND2.75 trillion in consolidated revenue. Pre-tax profit is estimated at VND868 billion. These targets are lower than the revenue and profit achieved in 2019./.

Motorcycle sales plummet

Members of the Viet Nam Association of Motorcycle Manufacturers (VAMM) sold nearly 519,000 motorcycles in the second quarter this year, a year-on-year decrease of 30.77 per cent.

The five members include Honda, Piaggio, Suzuki, SYM and Yamaha.

Of those, Honda Viet Nam currently accounts for 80 per cent of the motorcycle market share in the Vietnamese market.

It said that it had motorcycle sales of 174,755 last month, down 3 per cent from the previous month and down 4 per cent compared to the same period last year.

The Vietnamese motorcycle market also includes domestic brands such as VinFast and PEGA Viet Nam, along with foreign brands like Ducati, Kawasaki, BMW, KTM, Benelli, Harley Davidson, Triumph, Royal Enfield and Motorrad, which are distributed in the country.

However, these units are not members of VAMA so they do not count towards the sales report.

Experts said in addition to the impact of the COVID-19 pandemic and social distancing that affected purchasing power in the second quarter, sales of motorcycles of the members were also shared with these non-VAMM members.

Besides, the Vietnamese motorcycle market has also entered a saturated phase.

Along with that, the trend of people moving to use eco-friendly electric motorcycles, buying cars or choosing public transport had also contributed to declining vehicle sales, said the association./.

HCM City optimistic about tourism growth

HCM City Department of Tourism has expressed optimism about the local tourism after Covid-19 during a question and answer session with the deputies from HCM City People's Council.

The deputies have raised 19 questions to the Department of Tourism on how to recover the industry after Covid-19.

Deputy Trieu Do Hong Phuc said in the first six months of 2020, Vietnam's tourism industry had been hit hard by the pandemic and the total revenue dropped by 68%. "Can Gio, a biosphere reserve and historic revolutionary base, recently attracted lots of customers. However, its development is still very spontaneous and isn't on par with its potential. What solutions are there?" He said.

Deputy Nguyen Minh Tri asked what the plan for the worst-case scenario was if the pandemic couldn't be controlled in 2020 worldwide and Vietnam couldn't reopen. Deputy Nguyen Thi Le, chairwoman of HCM City People's Council, said the tourism services and products still left a lot to be desired and they couldn't link the investments together for a coherent plan. Le also asked what the department's plan was for the next two quarters to recover 80% of the level compared to the pre-outbreak period.

Bui Ta Hoang Vu, director of the Department of Tourism said this was the toughest time for the sector. The city's tourism sector earned VND3.8trn (USD163m) in the first six months, a decrease of 65% compared to the same period last year. However, this was actually a good sign because the revenues in April and May were VND1.7trn and VND2.8trn respectively. The occupancy rates at many four or five-star hotels, which depend largely on international tourists, had increased to 40% in the inner and 30% in the outer areas of the city. That means the domestic tourism sector had recovered well after the stimulus programme was launched on June 9.

HCM City authorities are carrying out many measures to help the sector including some programmes that give discounts as high as 70%, HCM City tourism festival in July with the participation from 50 local firms, co-operation with the Mekong Delta and the Southeast Region and other localities to organise discounted tour packages. According to Vu, the city's tourism sector would recover to 80% compared to the pre-outbreak period with such measures.

In the future, when the conditions are met, the city will reopen for international tourists based on the new set of safety criteria./.

Tea exports enjoy robust growth despite COVID-19 threat

Vietnam’s tea exports to major markets globally during the first half of this year recorded a robust growth, reaching 58,000 tonnes worth US$90 million, amid the impact of the COVID-19 epidemic, according the Agro Processing and Market Development Authority (Agrotrade).

Agrotrade stated that the tea export volume in June alone stood at an estimated 12,000 tonnes with an overall value of US$19 million with the export of high-quality tea products to high-end markets, helping local tea businesses to find sustainable outlets.

Due to the complicated nature of the COVID-19 pandemic, the country’s tea exports to several major markets such as Russia, Indonesia, and the United States have maintained vigorous growth.

The opening five months of the year saw Vietnam ship 6,100 tonnes of tea worth US$9.3 million to Russia, representing an increase of 11.6% in volume and 11% in value compared to the same period last year.

Meanwhile, tea processing businesses exported 5,100 tonnes worth US$4.5 million to Indonesia, marking a rise of 36.7% in volume and 29.4% in value. Tea exports to the US reached 2,400 tonnes worth US$3 million, indicating an annual increase of 15.1% in volume and 17% in value.

Most notably, tea exports to the United Arab Emirates tripled in comparison to last year’s corresponding period, according to Agrotrade.

Despite these positive factors, there is a limited number of domestic firms that have invested in launching high-quality tea products in an effort to meet market requirements.

At present, some 370 businesses and individuals nationwide have participated in exporting tea, with the majority shipping raw products to 74 countries and territories globally.

However, there remains a number of inadequacies in strengthening linkages among provinces in terms of tea production and processing, according to industry insiders.

Developing the tea industry in a sustainable manner, Agrotrade director Nguyen Quoc Toan underlines the need to encourage tea growers nationwide to be involved in a sustainable and quality supply chain while promoting a tea production model in line with VietGAP standards.

Furthermore, local enterprises have been advised to be proactive in investing in the application of cutting-edge technologies to produce high-quality products that can meet demands from demanding markets such as the US and the EU./.

Promising times ahead for local e-vehicle producers

Vietnamese electric motorbike manufacturer PEGA is going to bring its electric motorbikes to Cuban roads, creating a much-needed buzz for the country’s e-vehicle industry.

Newcomer PEGA last week announced the deal, worth $3 million, with its partners in the Caribbean nation. Two types of electric motorbikes will be exported to the Cuban capital of Havana after the partner assessed the products’ overall quality.

The first contract includes an order of 1,260 PEGA XMEN electric motorbikes with a value of roughly VND20 billion ($870,000). The order is currently being completed and preparations are made to transport the bikes to Cuba.

The second deal is for the shipment of more than 2,500 PEGA XMEN and PEGA AURA electric motorbikes, worth more than VND40 billion ($1.74 million), with shipment scheduled for next month.

PEGA’s movement should place renewed interest in electric vehicles in Vietnam, with both local and foreign makers pushing plans forward.

Electric vehicles involve a complete chain of suppliers and associated services from power supply and distribution, to charging stations and batteries including their charging, recycling, and disposal. Developing a charging system for the products is expensive – and currently, such large investment may put a burden on manufacturers in Vietnam.

To date, Japan’s Mitsubishi has delivered four electric cars and two fast-charging stations to the central city of Danang and one electric car and charging station to the Ministry of Industry and Trade for testing. Mitsubishi has also partnered up with Power Electronic Measurement Equipment Manufacturing Centre to build the first electric-vehicle charging station in Danang using solar power and the grid.

Meanwhile, locally-invested VinFast has also entered into co-operation with Austria-based firm Kreisel Electric to manufacture battery for electric cars and buses. It provided 3,000 electric buses for Hanoi, Ho Chi Minh City, Haiphong, Danang, and Can Tho and wants to introduce 30,000-50,000 charging stations across Vietnam by next year.

The EuroCham suggested that Vietnam should not be applied import taxes on e-vehicles.

“Special consumption tax on electric vehicles should be removed,” read EuroCham’s Whitebook 2020 released two weeks ago. It also called for a series of tax incentives including 10 years’ corporate income tax exemption after the first electric vehicle is assembled locally; 50 per cent reduction in the tax for the subsequent decade; 50 per cent tax reduction for the subsequent five years; and 50 per cent reduction in registration fees.

To encourage environmentally-friendly vehicles, the government issued Decree No.57/2020/ND-CP, amending and supplementing a number of articles of Decree No.125/2017/ND-CP providing new regulations on import duties on automotive components and applied from January 1 this year.

The Ministry of Finance has submitted to the government a list of environmentally-friendly vehicles running on electricity, hybrid, fully biofuel-powered vehicles, and compressed natural gas vehicles in the preferential programme for the import of automotive components.

With 70 per cent import tax on electric vehicles and hybrids, and 18-20 per cent on complete knock-down kits plus special consumption tax rates of 15 per cent, electric vehicle import and manufacturing are not deemed feasible in Vietnam for customers, charge providers, or automotive companies. As a result, electric vehicle implementation needs the market to develop, as the lack of infrastructure and the high costs of electric vehicles are preventing success in the very near future./.

Saving rates continue downward spiral

Following deposit rate cuts early this month for tenors from six months onward, many local banks have continued to lower rates for the remaining tenors, with some even offering an annual rate of 3% for a one-month term.

Among the private bank group, Techcombank has revised down the rates for over-the-counter deposits of a one-month term from 3.5%-4% to 3.15%-3.65%, depending on the age of depositors and the sum of deposits.

Customers under 50 years of age making deposits worth less than VND1 billion at Techcombank will receive an annual rate of 3.15%. If they want to get the interest before maturity, the rate will be capped at 3%, the lowest in the local market for a one-month tenor.

Also, the rates for other tenors at Techcombank were down by 0.2-0.3 percentage points compared to the beginning of July.

Similarly, Kienlongbank reduced the rate for one-month deposits to 3.75% from 4%. PGBank set the rate at 3.95% instead of the previous 4.15%, while MB cut it from 4% to 3.8%.

Fewer banks offer the approved highest rate of 4.25% for a one-month tenor. This rate is regularly applied to deposits made through online channels.

Early this month, State-owned banks including Vietcombank, Agribank, Vietinbank, BIDV and many private lenders such as HDBank, VPBank, TPBank had made sharp cuts by 0.15-0.3 percentage points for tenors of less than six months./.

Construction ministry urges better management of industrial buildings

People’s committees of central-level cities and provinces have been ordered to strengthen quality management of industrial buildings with large walls.

The move came after recent wall collapses which led to deaths and property damage.

According to the Ministry of Construction, the construction of industrial buildings has mushroomed in almost all localities.

In many cases, building contractors and constructors are not qualified and there are reportedly violations in the construction process, resulting in accidents.

The Ministry of Construction asked the Vietnam Institute for Building Science and Technology to compile instructions on the design, construction and inspection of industrial buildings with large walls.

The quality management of those buildings would be more urgent to ensure safety and avoid further incidents in the coming rainy season, said deputy minister of construction Lê Quang Hùng.

Localities must also strengthen management on the capacity of investors, contractors and constructors of industrial buildings, he said.

On May 14, 10 workers died and 14 others suffered from severe injuries in a wall collapse at a factory of Av Healthcare JS Company located in Giang Điền Industrial Zone in southern Đồng Nai Province.

In March last year, six people died after a wall collapsed in a factory of Bohsing Company in Vĩnh Long Province.

In both cases, the wall collapses resulted from construction violations./.

Long An bans swift breeding in urban areas

The Cửu Long (Mekong) Delta province of Long An has banned the breeding of swifts in urban areas starting this month.

Its People’s Committee said the ban is also applicable in existing and proposed residential areas approved by competent agencies.

All other areas are allowed to breed the birds but those raising them have to ensure their nests are at least 300 metres distant from prohibited areas.

Individuals and organisations now breeding swifts have to stop or move to permitted areas by 2025.

Swift breeding establishments in permitted areas have to ensure their facilities comply with breeding regulations.

The birds are bred for their nest, which are rich in nutrients and are traditionally believed to be beneficial to health.

The province had more than 120 such establishments last year, according to the provincial Department of Agriculture and Rural Development.

Of them, 70 per cent are buildings specifically constructed for raising the birds while the rest are residential houses that were altered for the purpose.

Most of them lack licences, and affect the lives of people around them as breeders use loudspeakers to call to the birds around the clock.

They also cause environmental pollution and a risk of diseases./.

More loans to enjoy restructured repayment periods

The State Bank of Viet Nam is drafting amendments to a circular that restructures repayment periods, waives and reduces interest rates and fees and maintains debt classification to support people affected by the COVID-19 pandemic to ensure more receive the support.

According to the draft circular which was recently made public for comments, more loans could have repayments postponed until after the end of this year.

Restructuring of the repayment periods and maintaining debt classification would be provided to loans which required repayments to be made from January 31 to December 31, instead of from January 31 to three months after the Prime Minister announces the pandemic is over.

The draft circular also allows credit institutions and foreign banks’ branches to restructure repayment periods and maintain debt classification for loans disbursed from January 23 to April 24. Under Circular 01, restructuring of the repayment periods and maintaining debt classification were only provided to loans disbursed before January 23.

According to Can Van Luc, chief economist of the Bank for Investment and Development of Viet Nam (BIDV), expanding loans subject to the circular’s supports was essential to ease the financial burden for companies affected by the virus.

Financial and banking expert Nguyen Tri Hieu expressed concerns over maintaining debt classification.

Hieu said problems would arise if enterprises went insolvent but their debt classification stayed the same, which would not fully reflect the risks as some loans were becoming non-performing.

Hieu said it was necessary to raise details for classifying restructured debts which were not repaid following the restructured payment periods, which would help prevent risks for the financial market and improve the efficiency of the policy.

According to the State Bank of Viet Nam, credit institutions restructured payment periods for nearly 260,000 customers with total outstanding loans of nearly VND180 trillion and reduced interest rates for 421,000 customers with total outstanding loans of VND1.3 quadrillion. Credit institutions also provided new loans worth VND1.1 quadrillion to 240,000 customers with interest rates 0.5-2.5 percentage points per year lower than the pre-pandemic period. /.