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The Diplomat
7 days ago
- Business
- The Diplomat
Is the US About to Establish a Military Base in Thailand?
In my April column for The Diplomat, I argued that Thailand has downplayed the defense dimension in its tariff negotiations with the United States, so as to dodge tough questions of strategic alignment. And so, 'the moment defense becomes overt in talks with Trump could be the moment Thailand finds itself dangerously cornered.' That gloomy reality is materializing, with Thailand's tariff rate remaining unaltered at 36 percent despite the Pheu Thai government having spent 97 million baht ($2.99 million) on lobbyists, and the state-owned energy conglomerate PTT Group having inked a 20-year agreement with Glenfarne Alaska LNG to import 2 million metric tons of liquefied natural gas annually. Murmurs about security-related concessions are growing louder. But, contrary to my anticipation of arms deals, the buzz centers around the establishment of a U.S. base within the Phang Nga Naval Base on Thailand's southwestern coast. That the buzz refuses to fade regardless of repeated denials from Thai officials reflects two contradictory trends, which are sharpened by today's U.S.-China showdown. On the question of the U.S. basing rights in Thailand, American persistence competes with unyielding Thai resistance. Thailand's stance is not only shaped by its pursuit of strategic equilibrium, but also by its first-hand experience. The heyday of the Thailand-U.S. alliance during the Vietnam War saw a massive American military stationing across seven key bases on Thai soil. The number of U.S. troops in Thailand was 46,300 in 1969, and 27,000 in 1975, according to the U.S. Government Accountability Office. While the gradual troop reduction was America's doing, the catalyst for the Thai government to formally request that U.S. combat forces pack up and leave was domestic discontent. The problems around hosting the garrisoned presence of another nation are succinctly captured by the late Thanat Khoman, Thailand's esteemed diplomat and one of ASEAN's founding fathers. These include the erosion of sovereignty, direct or indirect interference in domestic politics, and the disruption of social stability, from psychological unease to the economic shocks triggered by sudden inflows and pullouts of foreign funds. Because these problems are structural in nature, even the closest, friendliest ally with shared objectives can still leave a negative footprint. One might assert further that the closer the alliance, the easier it is to overlook the problems for the host country, particularly the psychological imprint. A case in point is the U.S. deployment of the chemical herbicide Agent Orange to destroy jungle cover and crops in Vietnam. Its long-lasting health implications for the Vietnamese population and American veterans are well-recognized, rightfully so. Presumed exposure among U.S. veterans stationed in Thailand are also acknowledged. The U.S. Department of Veterans Affairs specifically acknowledges compensation consideration for veterans serving 'on or near the perimeters' of U.S. bases in Thailand between 1961 and 1975, which suggests that Thai civilians living around those bases should not be ignored in the broader discourse. Yet, to date, there appears to be no real policy or research focused on the possible exposure of Thai civilians. Since the relatively smooth U.S. withdrawal in 1976, Thailand has not hosted a permanent American or other foreign military presence. All U.S. military activities in Thailand – while still substantial, with greater depth and wider scope than Thailand's military engagement with other nations – are now joint or rotational on a case-by-case basis. Uncle Sam has not been discouraged, though, and the prospect of American basing at Thailand's U-Tapao air base is a recurring discussion. An offshore military base in Thai waters is another area of U.S. interest. The request to establish one reportedly dates back to 1997. The reason for the U.S. interest is simple: Thailand's ideal geographical location. A gateway to mainland Southeast Asia, Thailand is a springboard for U.S. power projection into continental Asia, which is currently lacking. Given that U.S. ground-based cruise and ballistic missiles have a reported range between 500 and 5,500 kilometers, shots fired at maximum capacity from central or eastern Thailand could threaten all of China's southern provinces (Yunnan, Guangxi, and Guangdong) and the western Xinjiang Region. Furthermore, America's maritime dominance would be underpinned by Thailand's close proximity to both the South China Sea and the Indian Ocean. The rumored U.S. push to secure an institutionalized foothold on Thailand's southwestern coast is most straightforwardly understood in the context of the intensifying competition in the Indian Ocean. The regional littoral power India, and distant powers China and Russia, are all ramping up their naval presence – the latter two in apparent accordance with the classic Mahanian thinking on sea power. Although America has a forward naval presence on Diego Garcia, it is quite a distance away. American access to Singapore, meanwhile, is limited and takes place on a rotational basis under an agreement that runs through 2035. Through Thailand's Phang Nga Naval Base, then, the U.S. would have a firmer hold near the Andaman Sea and the Bay of Bengal. If ever greenlit, a formalized U.S. access to Phang Nga would likely follow the Singapore model. When it comes to Phang Nga, however, Thailand's apprehension goes beyond geopolitical balance and deep-seated sensitivities. Phang Nga is effectively a sister province of Phuket, bound by geographical proximity and a shared economic trajectory, from tin mining in the past to today's tourism. Phang Nga's internationally known resort zone, Khao Lak, is just a 30-minute drive away from the naval base in question. It must also be highlighted that Phang Nga, Phuket, and another neighboring province, Krabi, are undergoing a wellness-focused transformation under the national development agenda. An established foreign military presence in the area is at odds with that development priority. To cite Thanat Khoman once again, 'the criteria for allowing foreign forces to remain should rest on the national interests of the host country, or at least on the concord between the former and those of the foreign party.' The answer to the first criterion is clear, but the second one is murky considering that Thailand remains a formal U.S. ally. Perhaps unnoticed by many, there exists no mutual defense treaty between Bangkok and Washington. Instead, the Thai-U.S. defense alliance draws symbolic significance from the 1954 Manila Pact, which created the now-defunct Southeast Asia Treaty Organization. The alliance is reinforced by subsequent bilateral documents: the 1962 Thanat-Rusk communiqué, the Joint Vision Statements of 2012 and 2020, and the 2022 United States-Thailand Communiqué on Strategic Alliance and Partnership. None of these has binding provisions for basing rights. Ultimately, there is neither legal compulsion nor interest – and thus no political will – on Thailand's part to host an institutionalized U.S. military presence. More viable and desirable ways to boost the Thailand-U.S. alliance would be to expand military education and training, to co-develop or support indigenous defense capabilities, and to focus on strengthening a number of existing joint exercises, whether in bilateral or multilateral formats. The fact that there is no good outcome for Thailand on the trade front makes it even more unlikely that the ruling government would concede basing rights as part of its negotiations with the U.S. While a 36 percent tariff stands to devastate Thai exports and growth rate, Thailand offering zero tariffs on U.S. imports risks opening the floodgates to overwhelming inflows of American goods. This, combined with the already high influx of Chinese goods, will kill Thai-made products. The trickier business is determining the position of the Trump administration, which, on the one hand, has been relentless in bending others to its will. On the other hand, however, setting up a new base in Thailand seems to go against the administration's cost-saving agenda, especially as Trump himself has shown little interest in Southeast Asia. All things considered, an American base in Thailand remains a distant prospect.
Malay Mail
08-07-2025
- Business
- Malay Mail
PTT Oil and Retail Business Posts Record Q1 2025 Profit, Extends Regional Growth with ESG-Led Expansion
M.L. Peekthong Thongyai, CEO of OR, presents Q1/2025 results and strategic vision for regional and sustainable growth. BANGKOK, THAILAND - Media OutReach Newswire - 8 July 2025 - PTT Oil and Retail Business Public Company Limited (OR), the retail and lifestyle arm of Thailand's PTT Group, reported record earnings for the first quarter of 2025, signaling strong momentum from its cross-border expansion and ESG-driven strategy across energy and lifestyle company posted THB 182.4 billion in revenue for the quarter, with net profit rising to THB 4.38 billion—a 46% increase from the previous quarter and 17.6% higher year-on-year. EBITDA climbed to THB 6.48 billion, up 32.7% quarter-on-quarter and 5.0% year-on-year, driven by gains in its Global and Lifestyle businesses alongside cost discipline and margin improvements in key gross profit per liter and operational efficiency, particularly in Laos, the Philippines, and Cambodia, helped lift EBITDA by THB 311 million compared to the same period last year. Consumer resilience and sharper cost control also buoyed margins in OR's Lifestyle segment. While Mobility margins were pressured by softer spreads—especially in aviation fuel—overall performance held firm on reduced personnel and outsourcing investment gains added THB 657 million, contributing to the bottom line and further affirming the group's diversified growth engine."This quarter's performance reflects the resilience of our business model and the clarity of our long-term direction," said M.L. Peekthong Thongyai, Chief Executive Officer of OR. "We are expanding with purpose—delivering value for people, prosperity for communities, and care for the planet."At the center of that strategy is OR's People-Performance-Planet framework, which underpins its approach to investment, innovation, and regional expansion of EV Station PluZ, now present in all 77 provinces of Thailand, underscores the company's commitment to clean mobility. At the same time, OR's signature brand Café Amazon continues to scale across Southeast Asia, with 391 outlets outside Thailand and over 112 million cups sold in Q1 Global Business segment reported a 30.8% year-on-year increase in sales volume, with EBITDA rising 81.5%. The company now operates 415 PTT Stations and 391 Café Amazon outlets across Asia, including Cambodia, Laos, Philippines, Vietnam, Malaysia, Oman, Saudi Arabia, Bahrain, and Japan"This isn't just about selling fuel or coffee," Peekthong said. "It's about building platforms that empower local economies, foster entrepreneurship, and deliver long-term, sustainable growth."The strategy echoes OR's "They Grow, We Grow" philosophy, which emphasizes empowering local partners as the foundation of international the energy sphere, OR continues to sharpen its lifestyle and digital businesses. Non-oil operations contributed 27.5% of Q1 EBITDA, led by strong performance in retail, food & beverage, and franchising. The company is also investing in circular economy models, digital platforms, and sustainable products to reinforce long-term value ahead, OR is positioning for entry into the virtual banking sector, leveraging its wide-reaching commercial network and extensive customer database to offer personalized, accessible financial services. The move is seen as a natural extension of its strategy to become a daily-life platform for company's financial health remains solid. TRIS Rating reaffirmed OR's corporate credit rating at AA+ with a stable outlook for the third consecutive year, reflecting both financial discipline and strategic with that momentum, OR is pushing deeper into ASEAN and new frontier markets through a blend of organic expansion, joint ventures, and strategic alliances. The ambition to transform from a national champion into a future-ready regional enterprise at the nexus of energy, retail, and #OR The issuer is solely responsible for the content of this announcement. About OR PTT Oil and Retail Business Public Company Limited (OR) is a leading Thai energy and retail company with operations across 10 countries. OR operates through four core business groups: Mobility Business, providing energy solutions via PTT Station, PTT Lubricants, PTT LPG, and EV Station PluZ; Lifestyle Business, featuring Café Amazon, one of Asia's largest coffee chains, along with convenience stores and space management; Global Business, driving international growth with over 415 PTT Stations and 391 Café Amazon outlets; and OR Innovation Business, developing new ventures and sustainable solutions through technology and innovation.
Zawya
08-07-2025
- Business
- Zawya
PTT Oil and Retail Business Posts Record Q1 2025 Profit, Extends Regional Growth with ESG-Led Expansion
BANGKOK, THAILAND - Media OutReach Newswire - 8 July 2025 - PTT Oil and Retail Business Public Company Limited (OR), the retail and lifestyle arm of Thailand's PTT Group, reported record earnings for the first quarter of 2025, signaling strong momentum from its cross-border expansion and ESG-driven strategy across energy and lifestyle verticals. The company posted THB 182.4 billion in revenue for the quarter, with net profit rising to THB 4.38 billion—a 46% increase from the previous quarter and 17.6% higher year-on-year. EBITDA climbed to THB 6.48 billion, up 32.7% quarter-on-quarter and 5.0% year-on-year, driven by gains in its Global and Lifestyle businesses alongside cost discipline and margin improvements in key segments. Higher gross profit per liter and operational efficiency, particularly in Laos, the Philippines, and Cambodia, helped lift EBITDA by THB 311 million compared to the same period last year. Consumer resilience and sharper cost control also buoyed margins in OR's Lifestyle segment. While Mobility margins were pressured by softer spreads—especially in aviation fuel—overall performance held firm on reduced personnel and outsourcing costs. Equity investment gains added THB 657 million, contributing to the bottom line and further affirming the group's diversified growth engine. "This quarter's performance reflects the resilience of our business model and the clarity of our long-term direction," said M.L. Peekthong Thongyai, Chief Executive Officer of OR. "We are expanding with purpose—delivering value for people, prosperity for communities, and care for the planet." At the center of that strategy is OR's People-Performance-Planet framework, which underpins its approach to investment, innovation, and regional growth. The expansion of EV Station PluZ, now present in all 77 provinces of Thailand, underscores the company's commitment to clean mobility. At the same time, OR's signature brand Café Amazon continues to scale across Southeast Asia, with 391 outlets outside Thailand and over 112 million cups sold in Q1 alone. OR's Global Business segment reported a 30.8% year-on-year increase in sales volume, with EBITDA rising 81.5%. The company now operates 415 PTT Stations and 391 Café Amazon outlets across Asia, including Cambodia, Laos, Philippines, Vietnam, Malaysia, Oman, Saudi Arabia, Bahrain, and Japan "This isn't just about selling fuel or coffee," Peekthong said. "It's about building platforms that empower local economies, foster entrepreneurship, and deliver long-term, sustainable growth." The strategy echoes OR's "They Grow, We Grow" philosophy, which emphasizes empowering local partners as the foundation of international expansion. Outside the energy sphere, OR continues to sharpen its lifestyle and digital businesses. Non-oil operations contributed 27.5% of Q1 EBITDA, led by strong performance in retail, food & beverage, and franchising. The company is also investing in circular economy models, digital platforms, and sustainable products to reinforce long-term value creation. Looking ahead, OR is positioning for entry into the virtual banking sector, leveraging its wide-reaching commercial network and extensive customer database to offer personalized, accessible financial services. The move is seen as a natural extension of its strategy to become a daily-life platform for consumers. The company's financial health remains solid. TRIS Rating reaffirmed OR's corporate credit rating at AA+ with a stable outlook for the third consecutive year, reflecting both financial discipline and strategic continuity. Armed with that momentum, OR is pushing deeper into ASEAN and new frontier markets through a blend of organic expansion, joint ventures, and strategic alliances. The ambition to transform from a national champion into a future-ready regional enterprise at the nexus of energy, retail, and sustainability. Hashtag: #OR The issuer is solely responsible for the content of this announcement. About OR PTT Oil and Retail Business Public Company Limited (OR) is a leading Thai energy and retail company with operations across 10 countries. OR operates through four core business groups: Mobility Business, providing energy solutions via PTT Station, PTT Lubricants, PTT LPG, and EV Station PluZ; Lifestyle Business, featuring Café Amazon, one of Asia's largest coffee chains, along with convenience stores and space management; Global Business, driving international growth with over 415 PTT Stations and 391 Café Amazon outlets; and OR Innovation Business, developing new ventures and sustainable solutions through technology and innovation. PTT Oil and Retail Business Public Company Limited (OR)
Bangkok Post
08-07-2025
- Business
- Bangkok Post
Thai corporates' high leverage a concern
Several major Thai corporate borrowers have high leverage relative to their Asia-Pacific peers following a long period of large debt-funded investments and weak growth, according to Fitch Ratings. The average ratio of net debt to Ebitda (earnings before interest, tax, depreciation and amortisation) for Thailand's 10 largest bond issuers was 3.8 times at the end of 2024, according to Obboon Thirachit, senior director for corporate ratings at Fitch Ratings (Thailand). That rate was much higher than 2.1 times for all Fitch-rated Thai corporates and 2.4 times for Asia-Pacific peers, Mr Obboon told the recent Thailand Corporate Credit Outlook event in Bangkok. While PTT Group had the lowest leverage of 1.6 times, the other largest issuers had leverage ratios ranging from 3.8 to 15 times, he said. Any ratio greater than 3 is considered worthy of close monitoring. Prolonged high leverage and consistent negative free cash flow mean companies are more reliant on debt funding than on cash flows derived from operations, according to Fitch. This could result in a vulnerable capital structure that faces higher refinancing and liquidity risks, particularly during periods of market volatility. Weak corporate governance, such as inadequate board oversight, opaque group structures and poor disclosure, are other red flags of financial deterioration, noted Fitch. Resilient sectors, such as telecoms, should continue to benefit from less competition. Infrastructure development should also support earnings growth in the cement and building materials sector, said the ratings firm. The earnings of packaging companies should remain strong, supported by robust demand. However, petrochemical companies continue to face earnings pressure due to a prolonged downturn caused by weak demand and increased supply. Power companies are increasing investments and acquisitions as they seek to transition to renewable energy sources, which could worsen their already-high financial leverage. Fitch expects earnings for oil and gas companies to moderate from a high base alongside an expected softening in oil and gas prices, although earnings should remain robust.
The Sun
07-07-2025
- Business
- The Sun
Thailand offers zero tariffs on US goods in new trade proposal
BANGKOK: Thailand has submitted a revised trade proposal to the United States, offering to eliminate tariffs on a significant number of American imports. The move aims to prevent the US from imposing a 36% levy on Thai goods after a temporary 10% cap expires on July 9. Finance Minister Pichai Chunhavajira confirmed the updated proposal, which includes commitments to increase imports of US products and achieve trade balance within a decade. The US is Thailand's largest export market, accounting for 18.3% of shipments worth $54.96 billion in 2023. However, Washington reported a $45.6 billion trade deficit with Thailand, prompting threats of higher tariffs if negotiations fail. Pichai stated that the new proposal addresses US concerns while protecting Thai interests. 'We adjusted the proposal based on their feedback, focusing on areas of mutual benefit,' Pichai said. 'We are offering zero tariffs on a substantial number of items, though not across the board.' The US Trade Representative acknowledged Thailand's efforts but suggested minor refinements. Key Thai exports to the US include computers, telecommunication equipment, and rubber products, while major imports from the US are crude oil, machinery, and chemicals. Pichai highlighted plans to boost imports of US natural gas and reduce tariffs on American corn, currently taxed at 73%. In June, Thailand's PTT Group signed a 20-year deal to purchase 2 million metric tons of liquefied natural gas annually from the Alaska LNG project, a $44 billion initiative supported by former US President Donald Trump. Thailand's economy faces challenges, including weak consumption, rising debt, and trade uncertainties. The central bank projects 2.3% growth in 2024, down from 2.5% last year. Pichai warned that US tariffs could further limit growth to just over 1%. Trade discussions are expected to continue beyond the tariff pause, as negotiations involve multiple stakeholders. 'It's not just about tariffs but expanding trade opportunities,' Pichai added. - Reuters
