Trinidad gov't to tap Stabilisation Fund again for budget support
The Trinidad and Tobago government has hinted at the possibility of drawing down more money from the Heritage and Stabilisation Fund (HSF) even as opposition legislators questioned the Rowley administration's management of the country's finances.
In a statement, the Ministry of Finance confirmed that the Cabinet approved a US$251 million drawdown from the HSF to "be used for the financing of the 2017 budget, in particular, the development programme also known as the Public Sector Investment Programme (PSIP)".
Trinidad had made its first drawdown on the fund established in 2007, when on May 13, 2016, it took US$375 million, then leaving a balance of US$5.42 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$5.42 billion in May 2016 to US$5.695 billion in March 2017," the Ministry of Finance noted.
It reiterated that the savings and investments from surplus petroleum revenues in the HSF "be used where necessary to cushion the impact on or sustain public expenditure capacity during periods of revenue downturn whether caused by a fall in prices of crude oil or natural gas" or generate an alternate stream of income so as to support public expenditure capacity as a result of revenue downturn caused by the depletion of non-renewable petroleum resources".
The HCF is also used to provide a heritage for future generations, of citizens of Trinidad and Tobago, from savings and investment income derived from the excess petroleum revenues.
The Ministry of Finance said as the "country continues to experience severe revenue shortfalls as a result of depressed petroleum prices, the HSF will be carefully used by the government to ensure the country's financial stability".
But former planning and development minister Dr Bhoe Tewarie said the opposition is concerned with the way the government is managing the country's finances since coming to office in 2015.
He told a news conference that the government is failing to take decisions that will lead to stimulation of investment, reversal of recession, restoration of growth and creation of jobs in the economy, while increasing the country's debts.
"This is in addition to about TT$11 billion already borrowed during their term so far, a worsening debt-to-GDP ratio as borrowings increase and the GDP continues to decline," said Tewarie.
"We are very worried and concerned about how our country is going to repay such high debt in the absence of confidence in the absence of economic growth and with prosperity nowhere near on the horizon," he said, while querying whether the PSIP had been financed in the past five months.