House Passes Bill to Increase Borrowing Provisions of Loan Act

The House of Representatives, yesterday (Oct. 7) passed an Act to amend the Loan Act, in order to increase the borrowing authority under the Act, from $700 billion to $920 billion.
“Since the last time that the ceiling was raised to $700 billion we have had an increased reliance on both the domestic and international capital markets, for debt financing for the budget, as a results of short falls in revenue and the capitalisation of interest, which accrued debt securities issued to the Bank of Jamaica for FINSAC related obligations,” Finance Minister, Audley Shaw explained, while piloting the Bill in the Lower House yesterday (Oct. 7).
He added “these have meant increased growth in borrowings although at a slower rate than before.”
“I should indicate to you that the purpose for this, what appears to be a substantial increase of $220 billion in the loan ceiling is to project a three year programme” Mr. Shaw said.
He added that in addition to bringing on board the substantial obligations of the Bank of Jamaica in relation to FINSAC related issues, “we have also projected into the deficit financing over the next three years, such other significant obligations as Air Jamaica.”
Opposition Spokesperson on Finance, Dr. Omar Davies noted he had “no issue” with the amendment.