Dhanpaul raises concern about increase in borrowing limit to $45b

OPPOSITION senator Vishnu Dhanpaul has expressed concern about the government's move to increase the statutory limit on external borrowing from $30.5 billion to $45 billion in the Finance Bill 2025.

He did so during his contribution to the debate on the bill in the Senate on December 9.

Dhanpaul is a former permanent secretary in the finance ministry and a former finance minister.

He told senators the limit had never been moved from the $30.5 billion figure by previous PNM or UNC governments.

Dhanpaul said the reason why this never happened was because this limit served as an important safeguard to ensure any government which wanted to borrow money over that figure had to come to Parliament to explain its reasons and allow the opposition an opportunity to scrutinise the decision.

He claimed that by taking the decision to increase the limit to $45 billion, the government will not have to justify to Parliament why it intends to borrow money under this new figure.

Planning Minister Dr Kennedy Swaratsingh piloted the Finance Bill 2025, which seeks to amend the External Loans Act to adjust the statutory ceiling to $45 billion.

Dhanpaul wondered if the government planned to borrow more money externally to fund projects under the Revitalisation Blueprint, a suite of infrastructural developmental projects recently launched by the government. He also cautioned government that unplanned increased borrowing could put Trinidad and Tobago on a path where it will require some kind intervention from the International Monetary Fund (IMF).

During the general election campaign earlier this year, the PNM warned the UNC would engage in reckless economic actions which could place TT in an IMF programme similar to what it experienced during the 1980's.

Dhanpaul told senators that many countries have public debts which are larger than TT's, but the size of the debt is not the important thing.

"It is the trajectory of the debt and the ability of a country to repay the debt."

He said this is something which international ratings agencies such as Moodys and Standard & Poors pay very close attention to when analysing the credit ratings of countries.

"This government is making an excellent case to have this country downgraded."

Dhanpaul urged Prime Minister Kamla Persad-Bissessar to reconsider government's decision to increase the external borrowing limit.

He also called for the Central Statistical Office (CSO) to remain the official provider of the country's financial information and not the Central Bank, as recommended by the legislation.

Dhanpaul made it clear he was not imputing improper motive against Central Bank Governor Larry Howai on this matter, referring to Howai as a gentleman.

He said his concern was about the governor's post being somehow used to present an inaccurate picture of TT's financial situation.

Dhanpaul added for years the CSO has fed financial data to the Central Bank and the bank used that data to determine its policies.

He repeated that the Central Bank has never been the competent authority for the provision of financial data.

Dhanpaul claimed under the legislation there is nothing to prevent any governor, politically appointed by a government, from manipulating any aspect of financial statistics. He said such a situation could be prevented by the creation of an independent national statistical institute as envisioned by the former PNM government.

Dhanpaul also repeated concerns by the opposition about non-public servants being appointed to serve on the Board of Inland Revenue and having access to people's private tax information.