Roadtown, Tortola - Government has revised its projected revenue collection for 2009 to $267 million but says residents continue to enjoy an enviable standard of living.

Premier and Minister of Finance Honourable Ralph T. O’Neal, OBE made this disclosure in a statement delivered during the 10th sitting of the second session of the First House of Assembly of the Virgin Islands today.

In March this year, when the 2009 budget was presented in the House, Government projected revenue of $279,841,000, “hoping to have stimulated the economy through the implementation of various infrastructural projects throughout the Territory.”

However, in his statement to the House today, the Premier acknowledged a possible shortfall of five percent.  “Barring any unexpected surprises therefore Mr. Speaker, and based on a revenue projection exercise that was completed just last week, we expect a shortfall in revenue of five percent (5%) when compared to the revenue projections we made for the budget of 2009,” he told members.

The Premier revealed that recurrent revenue now stands at $159,180,634 with operational expenditure at $163,903,255. He further disclosed that expenditure thus far from the capital fund has totalled $24,850,605 with revenue in that fund amounting to only $22,814,412. The shortfall here was financed from “loan funding and direct transfers from the operational fund, in addition to pre-existing balances.”

Honourable O’Neal said it is not unusual at this point in the fiscal cycle that “expenditure surpasses revenue, with revenues rebounding again in the last quarter of the year.

According to the Premier and Finance Minister, by year end, it is expected that Government will have outstanding loans in the region of $137,729,309 while the statutory bodies will hold combined outstanding loans totalling $25,661,469.

Although, Government’s exact cash balance has not been revealed, the Minister of Finance gave assurances that there is sufficient cash in the Territory’s coffers to facilitate three months of operations at current expenditure levels as stipulated in the financial principles and guidelines.

It was further revealed today that BVI’s net debt in relation to recurrent revenue is about 26.73 percent taking into consideration the House of Assembly’s approval of the motion for Government to borrow $45,000,000 for the completion of the new Peebles Hospital and other projects. The debt-service ratio, which is “Central Government’s debt service payments in relation to our recurrent expenditure, is about 5.37 percent. Both ratios are well within the Borrowing Guidelines agreed to by the BVI and Her Majesty’s Government placing a maximum of 80 percent on the net debt ratio and 10 percent on the debt-service ratio.

Providing more details on the Territory’s fiscal situation, the Premier stated that a “10 year projection indicates that with our current plans for development and bearing in mind other expansionary factors, we can expect a noticeable, though not alarming decrease in our cash balances during the next two years that is expected to rebound by the year 2012.”

Based on this projection, Honourable O’Neal expressed the opinion that if “expenditure is controlled and utilized on initiatives and operations that make the most of the highest value and long term benefit for our citizens, we will come through this storm relatively unscathed.”

The Premier is optimistic that despite the economic downturn, “the Government of the Virgin Islands has thus far been able to maintain the standard of living of its citizens at enviable levels, and intends to continue to strive to keep it this way.”

It is Government’s vision that the Virgin Islands will be a socially cohesive and prosperous society, governed by a good government that will ensure a strong economy that is adaptable to change.