In brief
In an effort to meet the current exigencies faced by Myanmar as a result of the COVID-19 pandemic, the Myanmar Government had, on 27 April 2020, launched the COVID-19 Economic Relief Plan (CERP). The CERP comprises seven goals, 10 strategies, 36 action plans and 76 actions, each with an estimated timeline and designated authority in charge, covering a range of fiscal and social measures. Key Takeaways
Businesses in Myanmar should consider the various financing options and tax deferrals/waivers that may be applicable to their operations but also be mindful of possible conditions attached to those relief measures. For example, it appears that companies applying for loans under the government credit guarantee scheme would have to undertake to retain or rehire their employees but there are currently scant details on whether the employers can adjust the salaries or the moratorium period in which they are prohibited from dismissing their employees.
Foreign investors who have been looking at the Myanmar market may take the opportunity to seek fast-track approvals of their investments into the country, in particular for reputable international firms as well as companies in the promoted areas of renewable energy and strategic infrastructure, delivery and logistics services, healthcare, including the manufacturing of medical-related products, and digital payment services. Contents
Goal 1: Improve macroeconomic environment through monetary stimulus
Under goal 1, monetary stimulus is triggered through the following measures by the Ministry of Planning, Finance and Industry and/or the Central Bank of Myanmar:
> Decrease of banks’ deposit and lending rate ceilings by 3.0%.
Decrease of the minimum reserve requirement on banks.
Credit auctions and reduction in treasury bonds/bill auctions.
Goal 2: Ease the impact on the private sector through improvements to investment, trade & banking sectors
Under goal 2, the measures to ease the impact of the pandemic on specific sectors are as follows: > To ease impact on private sector firms through:> Provision of low-cost funds by:> offering MMK 100 billion worth of one-year working capital loans focused on micro, small and medium-sized enterprises (MSME) and companies in the hotel and tourism sectors at an interest rate of 1% per annum. Ensuring access by microfinance institutions (MFIs) to low-cost funding. Expediting the merger between Myanma Economic Bank (MEB) and Myanmar Agricultural Development Bank (MADB) to facilitate the expansion of existing pilot commercial lending programs to affected townships.Government credit guarantee schemes of up to 50% for […]
