Friday, January 19, 2018

Govt to draw down $1.7 billion from HSF

Port of Spain
The Government is making another billon-dollar draw down from the Heritage and Stabilisation Fund (HSF). The Ministry of Finance yesterday advised: “In the interest of full public disclosure” Cabinet on Thursday approved a draw down from the HSF in the amount of the US equivalent of TT$1,712,200,000 (US$251 million). 
“This draw down will be used for the financing of the 2017 budget, in particular, the Development Programme, also known as the Public Sector ­Investment Programme (PSIP),” the ministry said in a statement.
On May 13, 2016, the Government made its first draw down of US$375.05 million from the fund. At that time, the balance in the fund was US$5.796 ­billion and, after the ­withdrawal, the balance was US$5.420 ­billion.
“Since then, the fund has been able to recover through good management and good returns on investments. In fact, the balance in the HSF increased from US$5.420 billion in May 2016 to US$5.695 billion in March 2017. In other words, between May 2016 and March 2017, the HSF ­recovered US$274 million,” the ministry said.
After this latest draw down, the balance in the fund will be US$5.44 billion, “which is the same level that it was after the first draw down last year”, it added.
Budget deficit

The ministry recalled: “For clarity, in the 2016 mid-year review, it was stated that any budget deficit would be financed through a combination of borrowing and a draw down from the HSF.
“Further, in the 2017 budget statement, it was stated that ‘in 2017, core revenue, defined essentially as revenue from taxation, royalties and customs duties is only projected to be of the order of $37 billion, $20 billion less than just two years ago (2015). This leaves a fiscal gap in 2017 of over $16 billion, which must be financed by a combination of borrowings, and draw downs from the Heritage and Stabilisation Fund, and one-off sources of income, such as the sale of assets, dividends from state enterprises, repayment of past ­lending and so on’.”