A 120 trillion VND package stalling, Deputy Prime Minister says ‘need to review policy mistakes’
At the conference on the deployment of the “Investment and Construction Plan for at least 1 million social housing for low-income people and industrial zone workers in the 2021-2030 period” on the morning of February 22, Minister Nguyen Thanh Nghi said that in terms of the actual development of social housing and housing for workers, only in the period from 2021 to now, there have been 499 social housing projects implemented throughout the country with a scale of more than 411,000 apartments.
As for the implementation of the 120 trillion VND preferential credit package, 28 provinces have currently announced a list of 68 projects qualified for borrowing under the 120 trillion VND Credit Program (with a capital demand of over 30,000 trillion VND). As of present time, there have been 6 social housing projects for about 415 trillion VND in 5 localities.
“The disbursement of the 120 trillion VND preferential credit package is still slow compared to the desires and actual needs of enterprises investing in social housing and housing for workers,” said the Minister of Construction.
Demand for social housing is high but implementation is low.
After hearing the opinions of the Ministry of Construction and businesses, Deputy Prime Minister Tran Hong Ha joked that in order to develop social housing, the “money problem” is extremely important.
“With the preferential credit package for social housing, we must look at why disbursement is slow,” said the Deputy Prime Minister. Accordingly, commercial banks need to be very “revolutionary” with this matter.
The Deputy Prime Minister also stated that with the 120 trillion VND package, the banks need to review and evaluate, not just follow their own will. “We need to review the policies that are wrong somewhere, and should not propose policies that are not in line with the market,” said Deputy Prime Minister Tran Hong Ha.
Lowest interest rates for real estate loans ever
Ms. Ha Thu Giang – Head of the Department of Credit for Economic Sectors, State Bank of Vietnam – said that the maximum interest rate applied to deposits without a term and with a term of less than 1 month is 0.5% per year.
The maximum interest rate applied to deposits with a term from 1 month to less than 6 months is 4.75% per year, and the maximum interest rate for deposits with Vietnamese dong at the people’s credit fund and microfinance organizations is 5.25% per year. The interest rate for deposits with a term of 6 months or more determined by credit institutions based on market supply and demand for capital.
Reduced interest rates for loans will stimulate people’s ability to buy houses.
According to Ms. Giang, as of January 31 this year, deposit and lending interest rates continue to have a decreasing trend; the average deposit and lending interest rates of new transactions by commercial banks have decreased by about 0.15% per year and 0.25% per year respectively compared to the end of 2023.
According to a survey conducted by PV, the lowest deposit interest rate in the market belongs to 4 big banks including Vietcombank, Agribank, BIDV, VietinBank. Among them, Vietcombank and Agribank have listed interest rates for 1-3 month terms at only 1.7% per year, the lowest in the system. Interest rates for 3-5 month terms at these 2 banks are only 2% per year; from 6 months to less than 12 months is 3% per year. Corresponding interest rates at BIDV and VietinBank are 0.2% per year higher than the above levels. For deposits with terms of 12 months or more, the advertised interest rates at the 4 major banks range from 4.7-5% per year. Meanwhile, private commercial banks are all below 6% per year.
‘Fully booked’ flights after Tet
To ensure demand, many empty flights from HCMC to cities across the country were operated to transport passengers back in the opposite direction. On February 18 alone, there were over 100 empty flights from Tan Son Nhat Airport.
By February 22, even though many companies and schools had returned to operation, the number of airline tickets available for passengers was still highly priced.
Passengers flying from Hanoi to HCMC still had to pay high prices. Photo: NIA.
According to a survey on the Hanoi – HCMC route on February 23, Vietnam Airlines reported that some night and morning flights were sold out. For the remaining available flights, ticket prices were mostly over 3.5 million VND. Although Bamboo Airways and Vietjet Air still had tickets, the prices were also around 3.4 million VND. On this flight route, ticket prices only dropped when entering March.
Tension is occurring on the Chu Lai (Quang Nam) – HCMC flight route, with airline tickets selling out quickly. On February 23, this flight route had no more direct flights available, and passengers could only transfer with a price of over 5.8 million VND. The scarcity of direct flights will continue until February 27. By February 28, this flight route will start to have more than 3 direct flights, mainly operated by Vietnam Airlines and Vietjet Air.
Bamboo Airways returns 3 aircraft early, soon discontinuing a highly sought after route
According to a representative of Bamboo Airways, after ceasing the operation of Boeing B787-9 aircraft since November 2023 and continuing to return the aircraft early, from April, the airline will only operate narrow-body aircraft (Airbus A320/321) on domestic and regional international routes.
Starting from April, Bamboo Airways’ passenger aircraft fleet will consist of 8 A320/321; expected to increase to 12-15 aircraft of the same type by the end of this year if financial conditions and favorable market allows. This is in line with the Bamboo Airways’ restructuring plan that was reported to the government at the end of November 2023.
According to the airline’s representative, in this restructuring period, all or part of the Embraer E190 aircraft routes will be discontinued, including from Hanoi and HCMC to Con Dao, Hue, and from Hanoi to Dong Hoi.
Along with returning Embraer E190, Bamboo Airways will also discontinue the Hanoi – Con Dao route.
Assets of 28 leaders of the Ministry of Industry and Trade to be verified
On February 23, the Ministry of Industry and Trade held a random draw to determine the officials who will have their assets and income verified for the year 2024. There are 28 leaders and 125 other individuals who are civil servants and officials without leadership positions from 28 units to have their assets and income verified for the year 2024.
Representatives of the Inspectorate drew lots to select persons whose assets and income will be verified at various units.
The drawing is conducted by the Ministry of Industry and Trade with the Inspection Department as the head to implement the verification of assets and income – carried out according to Decision No. 280 dated February 5, 2024 of the Ministry of Industry and Trade on issuing a plan to inspect and verify assets and income for 2024.
At the draw, Mr. Le Viet Long – Chief Inspector of the Ministry of Industry and Trade – said that the selection of persons for asset and income verification is carried out according to the procedures and regulations specified in the Law on Corruption Prevention and Control and the regulations on control of assets and income of persons holding positions and powers in agencies, organizations, and units.
Thanh Hoa: Freezing FLC Sam Son’s account
On February 22, 2024, Vice Chairman of Thanh Hoa Provincial People’s Committee Đầu Thanh Tùng signed a decision to forcibly deduct money from the account of FLC Sam Son Golf & Resort Co., Ltd. The decision stipulates that the forced deduction of money from the account is to implement the decision of the Chairman of Thanh Hoa Provincial People’s Committee on administrative violations in the field of social insurance, unemployment insurance, health insurance for FLC Sam Son Golf & Resort Co., Ltd (located on Ho Xuan Huong Street, Quang Cu Ward, Sam Son City, Thanh Hoa)
The amount of money to be deducted as an administrative fine is 200 million VND and the fine for late payment counted up to the deduction date.
The reason for the deduction is that the deadline for paying the fine has passed, but FLC Sam Son Golf & Resort Co., Ltd has not yet paid the fined amount according to the administrative fine decision in the field of social insurance, unemployment insurance, health insurance (dated January 15, 2024) of the Chairman of Thanh Hoa Provincial People’s Committee.
Many people ‘hunting’ for real estate after Tet
Since the beginning of the year, investors have been making plans to borrow money amidst the lowest interest rates for purchasing real estate.
People have started to go “hunting” for real estate amidst the lowest interest rates in history (photo: N.M).
With around 3 billion VND ready for investment, Ms. Bich Phuong (in Thanh Xuan, Hanoi) said: “After Tet, every weekend, my husband and I visit various neighboring projects, villas, and land outside Hanoi. Even in other provinces such as Hung Yen, Phu Tho, Bac Giang… At present, low-interest rates make me restless about savings. I have determined that real estate is something worth buying and waiting for it to increase in 1-2 years.”
According to data recently released by the research unit PropertyGuru Vietnam, after the Tet holiday, the level of interest in real estate has quickly increased. Before that, the search for real estate nationwide started to rise from the 2nd day of Tet and maintained a strong growth rate, reaching a 124% increase compared to the week before Tet by the 10th day of Tet.
Proposal to increase pensions from July 1
Vietnam Social Security has a report evaluating the impact of new wage policies on the implementation of social security policies.
According to Vietnam Social Security, when applying the new wages policy, the expected average wage level to use as a basis for social insurance contributions will increase by about 54.89% and the social insurance contribution rate will be 25%. When applying the new increase, the additional social insurance collection amount in 1 year is 31,728 billion VND.
Vietnam Social Security proposes an 8% increase in pensions from July 1, 2024.
Vietnam Social Security believes that with the method of calculating the average wage level for social insurance contributions to calculate pensions, one-time allowances as proposed, the average 5-year pension of the workers will increase by about 1.5%, not considering the inflation factor. The pension of retirees after July 1, 2024 will only increase by 0.13% compared to those retirees in June 2024.
In practice, the salary adjustment in 2004 and 2005 was only about 10%. Therefore, together with considering the inflation factor into pension adjustment and economic growth in 2023, Vietnam Social Security proposes an adjustment of pension from July 1, 2024 for about 8% is appropriate.
