Director General of Bureau of the Budget (1959-1961)

In 1959, the Bureau of the Budget was established under the jurisdiction of the Office of the Prime Minister, separating budget work from the Comptroller-General’s Department. Dr. Puey, was appointed its first director on 14 February 1959. His first assignment was to remake the law governing budget procedure by repealing all existing budget laws and promulgating the Budget Procedure Act, 1959, brought preparating and administrating of the budget in accordance with international standards. He also improved important other treasury rules and procedures:

  1. The budget procedure combined ordinary and extraordinary expenditures, to be called the fixed expense statement and separate from the investment expenditure, the investment expenditure statement analyzed expenditure categories such as the economy, education, public health, and defense, to get a clear picture on allocations as to benefit the country.
  2. In the past, budget requisition was a slow process causing private companies to sell goods and services to the government at inflated prices. Dr. Puey improved the rules on money requisition by imitating the British system to decentralized authority in different ministries. Each ministry appointed its own civil servants to verify requisitions instead of the Comptroller-General’s Department being responsible. Each ministry may make payments by producing vouchers to be signed by the permanent secretary and its treasury officers. These vouchers may be cashed or deposited by private sectors, received at banks, without submitting agencies them to. Thus facilitated the requisition process.
  3. For state revenue, Dr. Puey suggested that the government collect more direct taxes in other categories. If government relied solely on indirect revenue, particularly customs tax and duty, when economic conditions of trading partners deteriorated, revenues would decrease. He proposed simplifying the taxation system, making tax rules concise, lowering taxes to discourage tax avoidance, improving discipline and practice of tax and duty officers and making state enterprises, focus on investment and profit/loss account of all state enterprises within the annual government budget.

Dr. Puey resigned from this position on 30 September 1961 after successful in implementing his system.

In 1959, during a trip to attend the International Tin Council meeting in London, there was a crisis involving the Minister of Finance who was Governor of the Bank of Thailand.

“When Khun Joti Khunakasem had to leave the position of Minister of Finance, I was still in the midst of an I.T.C. meeting in London. Field Marshal Sarit Thanarat sent me a telegram asking me to assume the position of Minister of Finance. At that time, he was very powerful and capable of deciding life-and-death matters. I was not certain what would happen if I were to refuse him, but I had to refuse. I replied by telegram that I could not accept because I had made a vow upon joining the Free Thai Movement that I would not accept any political position until retirement from the government service (to ensure that I had not joined the Free Thai Movement for personal interest). The field marshal sent another telegram pressing me to accept the position. ‘The country is in a critical situation, only you can help me…’ and again I replied by telegram that I was willing to help the country in every way, but not as a minister. His Excellency certainly would not want his minister to betray a vow. He stopped asking me and appointed someone else. Upon my return from the I.T.C. meeting, the field marshal appointed me as governor of the Bank of Thailand.”

Governor of the Bank of Thailand (1959-1971)

On 11 June 1959, Dr. Puey became the seventh governor of the Bank of Thailand. He served for 12 years, the longest tenure in the history of the Central Bank. He resigned from the position on 15 August 1971. His tenure as Governor made the Bank of Thailand free from political influence. Powerful positions and bankers were worry of him, trusting in his abilities and integrity. Strong confidence in baht flourished domestically and overseas. Its value was at 20-21 baht per U.S. dollar throughout the 12 years of his tenure.

Dr. Puey played a vital role in preserving economic stability by implementing prudent monetary policy consistent with fiscal core in looking after the national economy. At one time, he was a governor of the Bank of Thailand and director general of the Fiscal Policy Office. He used monetary and fiscal policy to create and preserve economic stability. He used what he called the Theory of Balloon with Three Pistons, according to which in any change system three factors financial economies:

  1. Fiscal pump: Input/output as income/expenditure;
  2. International finance pump: Inward payment/outward payment from trading/transfer for other purpose;
  3. Domestic finance pump: The Bank of Thailand directly controls in pumping the money supply into and out of the economy, while credit expansion of the banking sector results in more money input into the system. As a consequence, the balloon will become bigger, creating, and may fly away.

All three pumps, fiscal, international finance, and domestic finance, must be put into action through appropriate fist and monetary measures for suitable money supply according economic conditions, avoiding inflation and deflation.  Should domestic or external factors cause instability, measures under the pumps must be properly applied to bring the situation back to stability.

Dr. Puey initiated the development of the bond and treasury bill markets. He stipulation guidelines for implementing monetary policy measure in looking after the money supply consistent with economic conditions and prescribing Thai baht parity to facilitate international balance of payments and guarantee  sufficient international reserves. He introduced implementation of monetary policy measures in the style of developed countries and raising performance standards of the Thai Central Bank to be on par with those of international standards.

To supervise the financial institutional system, he deemed that financial institutions should be intermediaries help realization efficient savings and investments and also to help reduce dependence on foreign investments. For the economic systems to grow with stability, the monetary system must be strongly developed.

The commercial bank system must be reinforced, particularly Thai-owned banks were amended. Laws and the governing commercial banks and the Commercial Bank Act, 1962, passed granting the Bank of Thailand authority to supervise and control commercial banks operations by international standards. Creating the framework of a modern commercial banking system, the foundations of Thai banking were made more secure.

To prevent foreign commercial bank expansion from the Thai dominating economy, the Commercial Bank Act, 1962, provided that only Thai commercial banks were able to open branches in Thailand. It laid the groundwork for Thai commercial banks to grow rapidly and commanded the market share on the Thai economy more over foreign commercial banks. 

As governor, Dr. Puey seriously oversaw the stability of Thai commercial banks. When the Thai Development Bank (or Thai Pattana Bank) rapidly expanded and experienced of near bankruptcy, he asked other Thai commercial banks to join in increasing its capital and supervising operations for this bank until it recovered.

As governor Dr. Puey handled all aspects of administration. For the workplace, he made arrangements so that Bangkhunprom Palace became the property of the Bank of Thailand. It remains its headquarters. He improved rules and regulations on personnel salary and welfare. He founded the Thai banknote printing office opening a printing office in 1969.

He also prepared a qualified workforce. He initiated a scholarship program for high school graduates for study abroad in fields required by the Bank of Thailand to obtain wide - ranging knowledge. Later, more scholarships were granted undergraduates, in Thailand and abroad, for master’s degree and Ph.D. studies.

These graduates were hired by the Bank of Thailand and countinued as key members of the Central Bank until today. Four former students have served as governor of the Bank of Thailand.

Director General of the Fiscal Policy Office (1962-1967)

Prior to the founding of the Fiscal Policy Office, the Fiscal Economy and Statistics Divisiona within the office of Permanent Secretary of the Ministry of Finance, acted as the technical arm for the ministry. In 1959, government agencies were reorganized. In October 1961, the Act of Reorganisation of Agencies in the Ministry of Finance established of the Fiscal Policy Office under the jurisdiction of the Ministry of Finance. It assisted the Minister of Finance of study trends and treasury issue, providing advice and technical assistance, with recommendations on fiscal policy to the minister.

On 1 October 1962, Dr. Puey was appointed first director of the Fiscal Policy Office 23 civil servants were transformed the Fiscal Economy and Statistics Division, of the Office of Permanent Secretary of the Ministry of Finance to work in this new agency. Under his leadership, the Office of Fiscal Policy became a center of prominent economists:

Mr. Chanchai Leethavorn (Minister of Finance, 1979-1980)

Mr. Nukul Prachuabmoh (Governor of the Bank of Thailand, 1979-1984 and Minister of Transport, 1991-1992)

Mr. Pundit Bunyapana (Permanent Secretary of Finance, 1992-1993)

Mr. Aran Dharmano (Permanent Secretary of Finance, 1993-1995)

Mr. Chamlong Tohtong (President of the Bank for Agriculture and Cooperatives, 1976-1989)

Mr. Kraisee Jatikavanij, Mr. Manus Leevirabhand, and Mr. Suntorn Sathirathai (Civil servants at director-general level at the Ministry of Finance)

A new generation of foreign-educated technocrats climbed on to the bandwagon. One was M.R. Chatumongol Sonakul, taken the Permanent Secretary of Finance, 1995-1997, and Governor of the Bank of Thailand, 1998-2001.

Dr. Serm Vinijchaikul, formerly Permanent Secretary of Finance, commented, 

“Only Khun Puey could hold this group of young people intact.”

Not really, Dr. Puey laid down foundations for the Fiscal Policy Office in every aspect of fiscal discipline. Form controlling government expenditure and debts by limiting government borrowing annually to 20% of expenditure budget. This principle became an effective means to prevent successive governments from incurring excessive debt. He also laid down guidelines for recommending fiscal policy appropriate to the national economical situation, still observed today.

Ramon Magsaysay Award

His services from 1949 to 1965, Dr. Puey was given the Ramon Magsaysay Award for government service

Puey Ungphakorn

1965 Ramon Magsaysay Award


Government Service

in recognition of dedication, unquestioned inlegrity

and a high order of professional skill brought to

the management of Thailand’s public finance.

Manila on 31 August 1965

 An excerpt from the announcement during the Magsaysay Award ceremony:

“Dr. Puey’s career confirms that a single individual can make significant contributions to the progress of his country, despite a tendency toward official corruption evident in many developing lands. Thailand’s relative prosperity and steady growth matched by stable finances are a measure of his accomplishment.”

Dean of Faculty of Economics, Thammasat University (1964-1972)

H.S.H. Prince Naradhip Bongsprabandha, then Rector of Thammasat University wrote a memoir:

“I sought a dean of the Faculty of Economics and deemed Dr. Puey Ungphakorn to be the most suitable person. I am not sure he would accept the position owing to numerous government service duties, all of them important. I thought I would have to ask him at least three times, explaining the importance of the position before he would accept, but to my surprise, he agreed at my first request. He showed himself to be an educator, seeing the importance of education and being interested in education…”

  • Throughout the eight years of his tenure as dean, Dr. Puey greatly improved the Faculty of Economics:
  • Increasing full-time faculty members from 6 to 60, seeking grants of scholarship for studying abroad, encouraging faculty members to engage in other duties such as research, consulting for agencies and assisting external social services;
  • Improving undergraduate curriculum in economics as the first Thai high standard curriculum and opening a night-class degree program in 1966;
  • Opening an undergraduate English program in 1966 and establishing master’s degree English program in 1968. Thammasat’s Faculty of Economics was one of the best economic faculties in Asia. Later, the Thai program master’s degree was also improved.
  • Founding the library Faculty of Economics, opened for service in April 1965 to collect academic papers promote studies and research by students and faculty. It grew up into the largest economic textbook and research paper collection in Thailand eventually renamed Puey Ungphakorn Library.

Dr. Puey expanded the falsity board of directors to include representatives of faculty, civil servants, and alumni. He also faculty led staff overseeing a new building. Providing academic knowledge, he also emphasised ethics and morals. He warned ‘Cheating in any exam results in absolute dismissal

Rector of Thammasat University (1975-1976)

Few recall that Dr. Puey’s main concerns were education and rural development, act politics. He wanted to raise academic standards and lead the university to benefit the people though involvement in rural development. He used to say:

“Whoever said that I had no ambition in life? In fact, my lifelong goal was to become the rector of Thammasat University.”

He was the first true child of Thammasat to become its rector.  For one year, eight months and eight days in this position, he was the most industrious administrator in the history of Thammasat.

Important foundations laid down by Dr. Puey:

  • Expanding university to Rangsit as a second campus by exchanging area with the Bangchan Industrial Estate. This project was proposed in the fourth National Economic and Social DevelopmentPlan (1977-1981) for development over 20 years;
  • Improving academic structure. Thammasat already provided education in social science; the next step was expanding into science as mutually supportive subject.
  • The concept of university autonomy was initiated by establishing as task force to study ways to separate Thammasat University from the government service;
  • Improving basic curriculum, and allowing for a broader base of subjects selected by students.
  • Revising admission criterion to admit more students from rural communities Khunying Nongyao Chaiseri, as rector, later introduced the White Elephant programme to attract talented students from rural communities.
  • Enabling faculty members to translate and product of Thai textbooks for teaching in different subjects.

Thammasat’s social improvement goals were inspired by his starting that the university owed its existence to taxpayers and public subsidies. Therefore, the university’s duty was to provide academic services to serve societal needs:

  • The Faculty of Law brought law to rural communities;
  • The Faculty of Social Administration opened kindergarten and elementary schools in the Khlong Toei slum area;
  • Graduate Volunteer Project;
  • Rural development Project in Mae Klong River valley, cosponsor by Kasetsart University and Mahidol Universities.
  • Education Reinforcement Project inspired by Dr. Puey’s idea on continuing education and education for life. Those lacking educational opportunities took non – degree classes.

Following the events of 14 October 1973, Thammasat became a center of political activities of activist. At the same time, counter movements against students formed, such as the New Power Group, and the Red Gaur Group, Dr. Puey made every effort to calm the students and prevent unfortunate events. On 4 October 1976, the demonstration at Sanam Luang (Royal Cremation Ground) moved into Thammasat. A poster for a stage play showed an actor hanged to protest the hanging of two political activists in neighbouring Province of Bangkok. The picture of the actor was altered by one newspaper to make it look alike H.R.H. the Crown Prince, to cause public outrage against the students. One army armored unit radio station broadcasted this news, provoking violence against students and others on the Thammasat campus. Security and police forces arrived demonstrators at Thammasat during the night of 5 October 1976 and 6 October 1976, Village scouts tried to lynch the rector of Thammasat University. Dr. Puey deemed it useless for him to remain and resigned his position on 6 October 1976 spend the rest of his life left Thailand that night to in England.