Thai cabinet approves Asian bond guarantee plan

BANGKOK, Nov 10 (Reuters) - Thailand's cabinet agreed on Tuesday that the country should contribute $14 million to an Asian credit guarantee and investment mechanism under the Asian Bond Market Initiative (ABMI), a deputy government spokesman said.

"The Finance Ministry needs cabinet approval so that it can go ahead with this," Watchara Kannikar told reporters after a weekly cabinet meeting, adding the plan would also need parliamentary approval.

The guarantee, expected to be worth a total $700 million for local currency corporate bonds issued in the region, is part of the ABMI to promote the regional bond market, Watchara said.

China and Japan will each contribute $200 million to the guarantee fund, South Korea will invest $100 million while the Asian Development Bank (ADB) is expected to contribute about $100-150 million, according to a statement given to reporters.

Five of the 10-member Association of South East Asian Nations (ASEAN) -- Indonesia, Malaysia, the Philippines, Singapore and Thailand, which have more developed bond markets -- will each contribute $14 million to the guarantee, the statement said.

ASEAN also includes Brunei, Cambodia, Laos, Myanmar and Vietnam. ($1=33.30 Baht) (Reporting by Kitiphong Thaichareon; Writing by Orathai Sriring; Editing by Alan Raybould)