US$160.38M withdrawn from the Heritage and Stabilisation Fund

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US$160.38M withdrawn from the Heritage and Stabilisation Fund

USS$160.38 million ($1.09 billion) has been withdrawn by government from the Heritage and Stabilisation Fund on December 18, 2023, according to the report of T&T’s rainy-day wealth fund for the three months ended December 31, 2023.

The HSF quarterly report does not state what the US$160.38 million was used for, except that the withdrawal was done in accordance with section 15 of the HSF Act (2007).

That section states, “… where the petroleum revenues collected in any financial year fall below the estimated petroleum revenues for that financial year by at least ten per cent, withdrawals may be made from the fund as follows, whichever is the lesser amount:

a) either 60 per cent of the amount of the shortfall of petroleum revenues for that year; or

b) Twenty-five per cent of the balance standing to the credit of the Fund at the beginning of that year.”

The HSF quarterly report states that the withdrawal came from the fund’s liquid assets, further clarifying that “assets from the US short-duration fixed income mandate were sold to meet this obligation.”

Although US$160.38 million was withdrawn from the HSF, the value of the Fund at December 31, 2023, was approximately US$268.5 million higher than the previous quarter’s closing value of US$5.390 billion.

“The total net asset value of the Fund as at the end of December 31, 2023 was US$5.658 billion, compared to US$5.390 billion as at September 30, 2023. Of this total, the investment portfolio was valued at US$5.656 billion, while the remaining portion was held in operating cash accounts to meet the day-to-day expenses that arise from the management of the Fund,” according to the quarterly report.

The report said that during the quarter ended December 31, 2023, the HSF’s investment portfolio rose by 8.08 per cent.

“This positive performance was driven by strong gains within both the equity and fixed income mandates,” said the HSF report. For the quarter, the HSF’s US core domestic equities rose by 13.03 per cent and its non-US core international equities increased by 11.27 per cent.

The HSF 2023 annual report states that a deposit of US$182.21 million to the HSF was made on December 23, 2022.

According to the Auditor General’s report on the HSF’s 2023 annual report, the timing of the deposit of US$182.21 million is in contravention of the requirements of the act.

That report, which was signed by Auditor General Jaiwantie Ramdass on November 29, 2023, cited sections 13 (2) and 13 (4) of the HSF Act.

Section 13 (2) of the HSF Act states: “The deposits referred to in subsection (1) shall be made no later than the end of the month following the quarter in respect of which the deposit was calculated.”

Section 13 (4) states, “For the purposes of this section ‘quarter’ means a three-month period ending December 31, March 31, June 30 and Deptember 30.”

According to the Auditor General’s report, “A deposit to the Fund of US$182,213,278 was made on December 23, 2022. This deposit related to the quarter July to September 2022, and the date of calculation provided by the Ministry of Finance was October 26, 2022.”