Taxpayers now stand to inherit $96.1 billion in public sector debt, based on figures in the Central Bank's Economic Bulletin for January 2014.The $96.1 billion recorded at the end of December 2013 is an increase of $4.3 billion from the $91.8 billion at the end of November 2012.
"Preliminary data showed that total public sector debt stood at $96.1 billion at the end of December 2013, equivalent to 55.3 per cent of gross domestic product (GDP). Excluding treasury bills, notes and bonds issued for open market operations (OMOs), public sector debt as a per cent of GDP was 40.6 per cent at the end of December 2013," the bulletin said.
The Economic Bulletin for the previous year had said: "Total public sector debt is estimated to have increased marginally during the first two months of fiscal year (FY) 2012/13. Preliminary data show a 0.4 per cent increase in the debt stock from $91.3 billion at the end of September 2012 to $91.8 billion at the end of November 2012, bringing the estimated debt to GDP ratio to 46.7 per cent."
The 2013 bulletin also said: "The small increase in public debt outstanding was mainly on account of new contingent liabilities. In October 2012, the government guaranteed a $213 million fixed-rate domestic bond issued by the Urban Development Corporation of Trinidad and Tobago (Udecott).
Two loans amounting to US$32 million were also contracted for improving the communications system for the Police Service but disbursement on the facilities have not yet commenced. Disbursements from other external loan arrangements amounted to US$22.6 million while principal repayments were recorded at US$13.6 million. As a result, the external debt outstanding increased from US$1,858.8 million to US$1,867.8 million at the end of November 2012."
The money the country owes in US$ rises
During the fourth quarter of 2013, the government re-entered the international capital markets for the first time since June 2007 and raised a Eurobond of US$550 million in December 2013. This bond was issued at a fixed interest rate of 4.375 per cent with a ten-year tenor. In addition, the central government received disbursements of US$30.6 million from the Inter-American Development Bank (IDB) which included the first disbursement of US$29.3 million from a US$246.5 million loan contracted in December 2012 for a Multi-phase Waste Water Rehabilitation Programme.
Total external debt repayments amounted to approximately US$16.0 million during the fourth quarter of 2013 and mainly went towards repayment of the helicopter loan from ANZ Banking Group Limited, the loan from BNP Paribas for the six fast patrol vessels, as well as multilateral loans particularly from the IDB.
The Eurobond combined with new loan disbursements resulted in the central government external debt outstanding increasing by approximately 41.1 per cent during the first quarter of the fiscal year (October-December 2013) from US$1,597.7 million at the end of September 2013 to US$2,161.5 million at the end of December 2013. As a result, the external debt increased to 7.5 per cent of GDP at end-December 2013 from 5.7 per cent of GDP at end-September 2013.
Central government domestic debt (excluding OMOs and contingent debt) declined marginally by 0.5 per cent during the first quarter of the 2013/2014 fiscal year. This represented repayments of $72.6 million on existing government bonds. Government's contingent liabilities, showed a marginal fall (0.1 per cent) to $28.1 billion at the end of December 2013. However, this balance currently excludes a $1 billion bond issued by the National Insurance Property Development Company Limited (to finance the Programme for the Upgrade of Road Efficiency (PURE) and a $3.5 billion bond issued by the Urban Development Corporation of Trinidad and Tobago to complete the Government Campus Plaza. Inclusion of these two bonds would result in a sharp increase in contingent liabilities and in total public sector debt.
In other developments, contract agreements for three new loans were finalised with the IDB during the quarter ended December 2013 for a combined value of US$158 million. These were made up of a US$120 million loan for the Flood Alleviation and Drainage Programme, a US$20 million loan for Strengthened Information Management at the Registrar General's Department and US$18 million for the Global Services Offshoring Promotion Programme.