Report: Venezuela to raise interest rates on PetroCaribe oil
Published:Sunday | August 4, 2013 | 12:00 AM
The Venezuelan government is set to increase the interest rate it charges to finance oil purchases by Central American and Caribbean countries under the PetroCaribe oil facility.
According to reports from online financial news agency Platts, the increase stems from higher administrative and maintenance costs of the loans.
Since the creation of PetroCaribe in 2005, member countries who are signatories to the agreement have enjoyed an annual interest rate of one to two per cent on the portion of the oil bill that is treated as long-term loans.
But as of October, that will rise to 2.4 per cent.
The source said the planned increases are permitted under the agreements Venezuela signed with the participating countries.
The report states that Venezuela is unlikely to reduce or suspend oil shipments to the debtor countries given the political value it sees in the oil alliance.
The next PetroCaribe summit is set for September.
In reacting to news of the planned increase, Jamaica's Energy Minister, Phillip Pauwell, said he was not aware of this move. However, the Opposition Jamaica Labour Party's (JLP) Spokesman on Energy, Gregory Mair, said he was not surprised.
real concern
"Because of the precarious financial situation that Venezuela is in, I'm not surprised, but what is of real concern is what we could see in the future a tightening of the terms and conditions of the PetroCaribe agreement, meaning that they could reduce the credit lines, and probably, we would have to find more US dollars to pay them on a monthly basis, which would put more pressure on the foreign exchange rate for us here in Jamaica."
PetroCaribe members include Antigua & Barbuda, Honduras, Bahamas, Jamaica, Belize, Nicaragua, Cuba, Dominican Republic, Dominica, St Kitts & Nevis, Grenada, St Vincent & the Grenadines, Guatemala, St Lucia, Guyana, Suriname, and Haiti.
- CMC
Mortgage arrears climbing again at NHT
The National Housing Trust (NHT) has indicated that arrears on mortgage loans have deepened, this time across all income brackets and in all parishes.
The delinquent accounts now stand at an estimated 16.7 per cent of total loan accounts as at June 2013, and data supplied by the trust indicate that the nominal value of the arrears has accelerated.
The arrears at June 2013 were J$1.05 billion compared to J$784 million at June 2012 and J$718 at June 2011.
The NHT expects to earn J$7.3 billion from interest on loans to its beneficiaries this fiscal year, according to Finance Ministry data. Its total portfolio of mortgage loans was valued at $113 billion earlier this month.
Delinquent accounts are those said to be in arrears for 90 days or more.
While mortgage holders in the parishes of Kingston, St Thomas, Clarendon, St Elizabeth, and Hanover reduced arrears in the past two years, delinquencies again worsened in all the parishes and all income bands in 2013.
"All areas showed increases in non-performing loans," the Trust said.
Government workers, who account for just about 33 per cent of loans, have the best payment record, but they, too, have faltered on loan servicing.
Public sector mortgagors' accounts in arrears make up 4.7 per cent of the arrears portfolio," the Trust noted.
The Trust, which now has loans out for 97,993 borrowers, expects those numbers to grow by 2.25 per cent in the current fiscal year.
"The net growth in the portfolio for 2013-14 is projected at 2,200 loans," it said.
Open market loan products continue to be the best- performing category of mortgage accounts, followed by loans for construction.
Account holders who fail to restructure their debt are being faced with forced sales via auction and private treaty. Since the start of the year, 35 homes have been auctioned while nine were sold by private treaty.
Last year, 72 homes were sold by auction and seven by private treaty, while 72 were sold at auction and 41 by private treaty in 2011.