Home' Trinidad and Tobago Guardian : May 11th 2018 Contents news A3
Friday, May 11, 2018
Imbert paints brighter mid-year picture
Economy turning around
STORIES- GAIL ALEXANDER
After two and a half years of financial ad-
justment, Government’s now seeing its
The economy is turning around, revenue
collection is up, the energy sector’s boom-
ing and the non-oil sector is also growing,
Finance Minister Colm Imbert announced
“From all indicators, we’re on the
road to economic revival. In the words of
Johnny Nash: ‘I can see clearly now, the
rain is gone.’”
“If I’m allowed some artistic license:
“Under this PNM Government, it’s going
to be a bright sun-shining (sic) day’.”
Imbert painted a glowing picture of an
economic turnaround as the highlight of
his mid-year review of the 2018 Budget in
Parliament. (See full speech on Pages
In a 51-minute address he added, “We’re
not out of the woods yet, but after the sac-
rifices and prudent fiscal management of
the last two and a half years, our economy
is turning around. Our core revenues from
taxation are still fragile and still below $40
billion, while we’re running a $50 billion
economy, but we’re finally experiencing
growth and recovery in 2018.”
This, following adjustment over recent
years to extreme reductions in energy
prices resulting in a $20 billion revenue
Imbert said, “After a long, discouraging
period of economic decline, we’re now
witnessing a welcome upturn. Early esti-
mates are indicative of a growth forecast
of 2.0 per cent in 2018 and 2.2 per cent in
2019, rising to 2.5 per cent in 2020.”
He said the turnaround is being driven
by economic expansion in both the en-
ergy and non-energy sectors. Apart from
energy sector production expansion, he
said adjustments to the oil/gas regime is
“already bearing fruit, from a revenue out-
“The pick-up in the energy sector is
having a knock-on effect on growth in
the non-energy sector, where that sector
is projected to break even this year, after
years of decline,” he said.
Instead of negative growth of minus 2.6
per cent in 2017, the actual growth figure
will be closer to minus 1 percent, he added.
He said revenue projections for 2018 are
“When deposits in the suspense account
at the Treasury are taken into account, we
have collected in excess of $19.5 billion in
current revenue up to the end of March
“Our projected capital revenue, largely
due to come from the recovery of debt
from CL Financial and its subsidiaries,
hasn’t yet fully materialised. But we’re
making significant progress towards the
launch of the National Investment Fund in-
tended to monetize the assets transferred
to the Government from Clico and CIB.”
He said the actual fiscal out-turn for 2018
will depend heavily on that fund.
As a result of revenue and expenditure
adjustments, the overall 2018 Budget
deficit is now being projected at approx-
imately $4.2 billion or over $500 million
lower than originally projected, he added.
However, Imbert said high oil prices cre-
ate a requirement for a high fuel subsidy.
“If oil remains at US$70 a barrel, the fuel
subsidy could reach as high as $900 mil-
lion in 2018, which wasn’t budgeted for,”
“It’s imperative, therefore, that in addi-
tion to transforming Petrotrin into a viable
profitable organisation, we must also com-
plete the work on an appropriate formula
that allows the price of fuel at the pump to
move up and down with the movement of
the price of refined petroleum products.”
It’s intended to have this in place by the
end of 2018, Imbert said, but he didn’t en-
visage oil/gas prices changing significantly.
See full mid-term budget review
speech on Pages A15, A16, A25 and A26.
of Clico firms
coming in June
Finance Minister Colm Imbert said yesterday
that the debt owed by Clico to Government is
finally being settled.
“As an initial step, we’re monetizing approxi-
mately $4 billion of that debt with an Initial Pub-
lic Offering of 49.9 per cent of the shareholding
of a newly-incorporated company: National In-
vestment Fund Holding Company.
“Into this will be transferred the selected as-
sets of Colonial Life Insurance Company (Trini-
dad) Limited (Clico) and Clico Investment Bank
(CIB) in liquidation, as well as an appropriate
shareholding of Trinidad Generation Unlimited
The initial public offering is in June 2018, Im-
bert said, adding he projects realising revenue
from this by the end of July 2018.
On the recovery of $23 billion pumped into
the 2009 Clico bailout, Imbert said, “To date, as
part of the first distribution of assets from Clico
Investment Bank, a total of 42,475,362 shares of
Republic Bank, valued at $4.3 billion, have been
transferred directly to the Corporation Sole
and/or state enterprises and Clico, for onward
transfer to the Government.
“This represents 26 per cent of Republic Bank.
A further 25 per cent of Republic Bank was al-
ready held by the Clico Investment Fund. In
addition, 23 per cent of One Caribbean Media,
valued at $200 million, has been transferred to
the Corporation Sole and/or state enterprises
and Clico for onward transfer to Government,
as well as 29.9 per cent of Angostura valued at
$1.07 billion, 5.4 per cent of WITCO valued at
$402 million and 19.5 million shares of Home
Construction, valued at $476 million.”
He added, “Government has also recovered
TT$3.8 billion in cash so far from Clico since
September 2015 and lands in Tobago valued at
$186 million for the proposed Sandals Resort.
“Government is also actively pursuing the sale
or acquisition of shares held in Methanol Hold-
ings International Limited, valued at over $2
billion, as well as the recovery of $500 million
in bonds. There remains a further 40 per cent
of Angostura held by CL Financial and/or Clico,
among other assets to be recovered. “
He said a selected portfolio of these assets will
be placed in the National Investment Fund for
an offer for sale to the public in 2018.
“We anticipate that in the first instance, the
value of the shares that will underwrite the
fund will be between $8 billion and $10 billion,
of which we plan to offer up to 49.9 per cent in
this year 2018.
Also, he said seven years after it was placed in
compulsory liquidation, Clico Investment Bank
has made its first dividend distribution to its
creditors, including Government.
Minister in the Ministry of the Attorney General and Legal Affairs, Fitzgerald Hinds, right, congratulates Finance Minister Colm Imbert
following his mid-term budget review in Parliament yesterday.
PICTURE ANISTO ALVES
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CURRENT $$$ GROWTH:
•Non-oil sector revenue up to April - $4.9
• Petrochemical sector corporation tax
moved from $371 million (2016-2017) to
$1.2 billion (2017-April 2018).
• Non-energy sector corporation tax
increased between 2017 and April 2018 by
$500m to $2.3 billion.
• Total net collections of corporation tax in
all sectors are up year-on-year for the period
October to April by $1.3 billion.
• Collection of petroleum profits tax and
supplemental petroleum tax, excluding
royalties, is up by $500 million for the first 7
months of 2018.
• Royalties, excluding Petrotrin, on target to
reach $2 billion.
• Expenditure by the end of March 2018
estimated to be $21.69 billion - 15 per cent
lower than the originally projected mid-year
• Net public sector debt to GDP ratio was 55
per cent, down from 62 per cent in 2017.
• External financial savings were US$8.11
billion - or import cover of over nine months
at the end of April.
• Small increase in foreign reserves between
• Heritage and Stabilization Fund was
US$5.87 billion at the end of April 2018
- over US$200 million higher than at the
end of September 2015 despite total
withdrawals of US$637m.
• No retroactive Property Tax. The waiver
concerning payment of Property Tax will be
extended to the end of December 2017.
• Legislation for the T&T Revenue Authority
requires special majority votes and will be
sent to a Joint Select Committee.
• Review of Gaming/Gambling legislation
now on, towards finalising the legislation
by the end of 2018 and implementation by
• Procurement regime operational shortly.
• Mobile scanning technology for Port-of-
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