(Photo Credit: Clifton Skelton/BVI Platinum News)
The BVI’s total public sector debt as of December 2018 was $232.69 million. Of the $232.6M, the Central Government debt was $151.79M and guaranteed debt was $80.9M. However, in the 2019 Budget, the public debt is allocated at $181.1 million, according to Ministry of Finance officials.
Head of the Macro Fiscal Unit, Ministry of Finance (HMFU), Michelle Richmond-Phillips revealed recently that the figure stated in the budget book would be lower than the figure stated above as it speaks to existing debt. She said that the $181.1M figure includes amounts for new debt.
With regards to the public debt stated in 2019 budget, the figure was calculated based on the assumption of the Government’s acceptance of the loan guarantee proposed by the United Kingdom (UK).
In 2018, there had been a noticeable change in the trend for debt servicing on the guaranteed debt side. Richmond-Phillips said that there had been a change from $16.5M in 2015 to $41.7M in 2016, which represents disbursements under the BVI Electricity Corporation’s Social Security loan.
She also referred to an additional disbursement of $50 million for the BVI Ports Authority loan. In addition, a disbursement of $2.1 million in 2018 for another BVI Ports Authority loan. And according to Richmond-Phillips, there are two additional disbursements still outstanding.
Minister for Health and Social Development, and Territorial Member, Hon. Carvin Malone inquired about whether the Government is going to remain in line with the ratios set up by the protocols for effective financial management and Richmond-Phillips responded in the affirmative.
The Minister asked if the Government would be able to maintain the ratios if it were to accept the loan guarantee from the UK. However, Richmond-Phillips responded in the negative.
Further asked if Government would be able to maintain the ratios if it were to accept the loan guarantee from the UK four or five years into the future, and Richmond-Phillips again responded in the negative.
However, Financial Secretary, Glenroy Forbes noted that the public debt figure stated in the 2019 budget is guided by the Medium-Term Fiscal Plan, which outlines the plan for borrowing up until the year 2021 that would keep the Government in line with the ratios outlined in the protocols for effective financial management.