The first quarter of Government’s new financial year ended with public entities owing their suppliers nearly $40 million in overdue payments.
Among those in arrears were the Queen Elizabeth Hospital (QEH), Barbados Water Authority (BWA) and Transport Board, leaving them and some other state-owned enterprises (SOEs) exposed to more “liquidity and operational risks”.
These financial obligations to creditors are detailed in the Quarterly Central Government Fiscal Operations Report for the April 1 to June 30 period prepared by the Fiscal Risk Unit of the Ministry of Finance.
The report stated that unsettled obligations of public bodies are not part of central Government fiscal operations, but were disclosed “because they could result in a call on the Consolidated Fund should the entities be unable to meet their obligations to creditors”.
Total payables of public bodies stood at $167.7 million at June 30, about $118 million of it at Transfer Monitoring Unit (TMU) entities, meaning SOEs that are being reformed and weaned from the public purse, and $49.7 from other public bodies. The overall overdue amount was $39.3 million – $29.6 million from TMU SOEs and $9.7 million from other public bodies.
“TMU arrears were under the established $30 million [Barbados Economic Recovery and Transformation programme 2026] limit at June 30, 2026. Arrears on the full basis were $29.6 million, and $21.7 million on the basis against which the limit is measured, which excludes the Barbados Water Authority,” the report stated.
“Of the full amount, the QEH ($10.1 million), the BWA ($8 million), the Transport Board ($3.9 million), the Caribbean Broadcasting Corporation ($1.4 million) and the National Conservation Commission ($900 000) accounted for $24.3 million, or 82 per cent.”
The Ministry of Finance document noted that “the concentration of arrears among these entities increases exposure to liquidity and operational risks within critical sectors, including health care, water and public transportation”.
“Given the essential nature of these services and their importance to social and economic activity, prolonged financial pressures could affect operational capacity, supplier relationships and continuity of service delivery,” stated the report.
It outlined the following “drivers” of the arrears:
• QEH arrears were influenced by reduced funding and operational challenges associated with procurement, payments and inventory management.
• The BWA continues to experience challenges in the collection of receivables, which have implications for cash flow management.
• The Transport Board has experienced liquidity constraints, resulting in challenges in meeting operational requirements.
The report also pointed out that historically, the BWA has accounted for a significant share of arrears among entities monitored under the TMU.
“Efforts to improve receivables management and strengthen collection mechanisms such as receivables factoring for BWA could support liquidity management and reduce financing pressures,” it added.
The first quarter of the 20262027 financial year was one where Government transfers to public institutions increased by $34.2 million to $294.6 million, according to the quarterly fiscal report.
This was driven by higher subventions to the QEH, National Sports Council, Barbados Defence Force, Barbados Cadet Corps and the newly-created Social Empowerment Agency.
“Advances of $9.7 million were issued in the quarter, of which $6 million was to start the 2026 sugar crop and $3 million to Business Barbados, with subscriptions to the International Maritime Organisation and settlement of debt to Storage Solutions Limited making up the balance,” the Ministry of Finance shared.
In addition, Governmentguaranteed debt, which primarily comprises the multilateral debt of SOEs enterprises, “rose by $300 000 over the year [June 2025 to June 2026] to $69.8 million”. (SC)
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