The Government is moving to tighten management of the Heritage and Stabilisation Fund currently at US$4.7 billion and projected to reach US$5 billion by the end of this financial year end, says Finance Minister Larry Howai.Howai detailed the fund's status at yesterday's post-cabinet media briefing. He said the fund has been in existence for the past six years.He said the annual review for the last year was being completed and the ministry was doing its own review. Suggestions for management and operation of the fund would be tabled in Parliament later on, he added.
Audits have been completed for the fund up to the last year (last September) and the fund has a total value of US$4.7 billion, an increase of $628 million over the previous year, Howai said.
Growth in the fund is based on transfers on an annual basis, based on the price of oil and gas and the fund's earnings.Howai said the last year was a good year for the fund since the rate of return was 10.73 per cent."An exceptionally good return given the low interest rate in the international market," he said.Most of the growth came from the growth and equity portfolio which at end of last year was $1.7 billion. Howai said this was up from $1.3 billion the year before.He said the fund's fixed income portfolio was US$2.9 billion at the end of last year, compared with $2.5 billion the year before.
He said the Government was now reviewing the performance for the first half of this year to determine transfers to the fund for 2013."We expect by end of the year it will close with more than US$5 billion," he said.He said foreign exchange reserves did not include HSF figures.Howai said reserves remain strong and is a major source of T&T's high rating and that is expected to continue as the price of oil and gas remain above projections in the 2013 budget He said the Government is reviewing tighter management process of the fund which has overseas managers.Several issues were being examined to broaden rate of investments. He said it was preferred that the fund remain with a conservative investment policy and tighten up the process to ensure a significant degree of protection for the fund and a rigorous procedure for accessing it.
Howai also said the fuel subsidy issue is still being reviewed. He said talks with Caricom heads on the fuel subsidy issue may take place when leaders come to T&T next week for the visit of US Vice President Joe Biden.
