By NEIL HARTNELL
Tribune Business Editor
The Bahamas' national debt increased by $136.5m during the 2018-2019 fiscal year's first quarter, taking the total sum owed by this nation to around the $8bn mark.
The Ministry of Finance's "snapshot" report, its first effort at quarterly financial reporting, revealed that the rate of national debt increased slowed by 65 percent compared to the same period in 2017 when the Government added $378.9m in "red ink".
"To meet its operational requirements, the Government incurred a net increase in liabilities of $136.5m," the Ministry of Finance's report said. "A total of $143.5m was spent to repay (existing) debt maturing in the review period. Of this amount, $108.4m was for Bahamian dollar liabilities, and the balance of $35.1m settled foreign currency obligations.
"To finance the deficit and meet other funding requirements, the Government borrowed a total of $280m --of which $100m was by way of a Bahamian dollar bank loan. New domestic bond issuances aggregated $110m, and were partly used to refinance the $80m in maturing bonds.
"The Government also had recourse to short-term borrowings via an additional $70m in Treasury bill issuance. As a consequence, the direct charge on the Government increased to an estimated $7.382bn from $7.245bn at end-June 2018."
The addition of around $700m in contingent liabilities, not mentioned in the report but which the Government has guaranteed on behalf of corporations and agencies, takes the national debt through the $8bn mark when factored in.
Still, the Ministry of Finance's report showed that the Government's gross new borrowing for the first quarter represented a 42 percent decline year-over-year, with debt repayments amounting to a 24 percent rise.
A further $6.6m was added to the "sinking fund" set up to finance future debt redemptions, taking the total value allocated to three international bond issues and three local facilities to $107.8m and $9.6m, respectively.
The Ministry of Finance's report also confirmed, though, that a total 27 percent - more than one quarter - of first quarter government spending went on a combination of interest payments and subsidies to state-owned enterprises. This illustrates how The Bahamas' debt mountain, and loss-making public sector agencies and corporations, continue to bleed Bahamian taxpayers.
"Interest payment on the public debt was $73.2m, compared to $77.7m last year. Approximately $23.5m was on foreign currency obligations, and the balance of $49.7m was on Bahamian dollar debt," the Ministry of Finance said.
"Subsidies, mainly representing transfers to government-owned and/or controlled units which provide commercial goods and services to the public, amounted to $70.7m, up $10.4m from the same period in the prior fiscal year.
"Transfers to public non-financial corporations, at $68.1m, exceeded last year's spend by $8m," the report continued. "This outcome was primarily explained by higher assistance payments to the Public Hospital Authority ($14.9m), being offset by timing-related reductions in assistance to the national airline carrier and the Water & Sewerage Corporation.
"Transfers to private non-financial enterprises increased to $2.4m from a negligible level in the comparable period, influenced by timing-related payments made under specific arrangements with the cruise line operators and a hotel-related Heads of Agreement."