BMC struggling to repay gov�t loans
Isaac Pinielo | Friday June 23, 2017 14:30
The PDSF was established under the Ministry of Finance and Economic Development as a device to ensure that government would have a source of funds to service public debt.
The report on the audits of the accounts of the government for the financial year ended March 31, 2016, determined that the BMC holds two loans from the PDSF totalling P354 million.
According to the auditor general, Pulane Letebele, the commission is currently not able to honour the repayment instalments due on one loan because of its financial constraints.
“The interest income is therefore understated to the extent of the interest element on the unpaid instalment when due,” she said.
Letebele noted that while it is common cause that the BMC has financial constraints, which render it difficult to honour its loan repayments obligations, “I am still not aware what arrangements have been agreed to deal with these loans”.
As in the previous year, she said the repayment instalment due in the year under review has not been paid.
The report also revealed that the commission had not complied with the financial provisions of the BMC Act, which require taking one year with another, its revenues to be sufficient to enable the Commission to meet the outgoings of its properly chargeable to the revenue account.
In the year under review, the group and the Commission recorded a surplus of P337.22 million and P332.35 million, compared to a deficit of P13.87 million and P21.26 million, respectively reported in the previous year.
BMC received a government grant of P600 million that cushioned the rise in costs and the decline in revenue from sale of meat and allied meat products.
Income for the group increased from P1.37 billion in the previous year to P1.86 billion in the year under review, representing 35% increase, while expenditure on the other hand increased from P1.39 billion to P1.52 billion, representing a 10% increase.
Income for the Commission increased from P1.36 billion in the previous year to P1.84 billion in the year under review, representing 36% increase, while expenditure on the other hand increased from P1.38 billion to P1.51 billion, representing 10% increase.
Letebele said the ability of the BMC to continue as a going-concern is dependent on continued government support, as it had accumulated deficit of P591. 25 million during the year under review, compared to P893.31 million in the previous year.