An Investor’s Takeaway from the 2026 Trinidad and Tobago Government Budget

The newly installed government budget did little to curb the major structural issues of T&T- increasing debt load, low labour participation, energy sector dependence, stagnant energy production & prices and FX scarcity that would drive imported inflation. It is not all bad news- there is a start of a shift to sustainable strategies- increasing NIB rates and the pension age would eventually stabilize citizen's pensions at the cost of reduced purchasing power of the working public today. The eradication of 'make-work' programmes should help with reducing public spending but lead to unemployment- whether increased unemployment would be temporary would depend on the governments execution of its programmes to make full time sustainable opportunities available & the private sector’s ability to absorb. The expansion of the tax base to an asset tax on banks & insurance companies, landlord rental taxes, increased electricity rates for non-residential customers, increased duties on alcohol & tobacco, and the LPG price adjustment would help shore up revenues/reduce subsidies. This is offset by the promise of public sector wage hikes, drop in super gas prices and continued high budgeted spending (roughly same as the last two years). With budgeted energy prices higher than forecasted by major international organizations and a history of inefficient execution- there is a greater risk to the deficit (and credit rating and eventual standard of living of TT residents).

Local Stocks- Losers

Overall, there will be winners and losers from the budget- The West Indian Tobacco Company Limited (WCO), Angostura Holdings Limited (AHL), ANSA McAL Limited (AMCL) (through Carib) would see pressures from additional duties, landlords such as Endeavour Holdings Limited (EHL) could see increased taxes. The banks and insurance firms Republic Financial Holdings Limited (RFHL), First Citizens Group Financial Holdings Limited (FCGFH), Scotiabank Trinidad & Tobago Limited (SBTT), Ansa Merchant Bank Limited (AMBL), JMMB Group Limited (JMMBGL), CIBC Caribbean Bank Limited (CIBC), Guardian Holdings Limited (GHL) could see increased taxes with those heavier TT exposure seeing a higher impact (FCGFH, SBTT)- the mechanics of the asset tax calculations is yet to be released. Heavy industrial and commercial consumers of electricity like Trinidad Cement Limited (TCL) and AMCL (through manufacturing) would see an outsized impact vs the other listed names. Massy Motors could see pressure from roll on roll off suppliers.

Local Stocks- winners

As for winners, I don't see any glaring beneficiaries- productivity & consumption overall could be improved as skilled persons stay in the labor force for longer and pension & insurance providers could see an uptick in clients and AUM given the removal of taxes on private pensions. Also extending the retirement age could boost lending by the banks as mortgages are spread over a longer period and serve a boon for residential real estate. Once there is clarity on the OFAC license for Dragon, TTNGL could benefit from a reversal of last quarter's impairment of ~TT$85 million. Investor’s can also benefit from a wider opportunity set as a national REIT and another NIF bond was proposed- this is balanced by already high GOTT & GOTT associated exposures in the system.

Forward looking view

What remains true, is that GOTT spends more than it earns and continues to borrow to fund high spending (that is unsustainable in my opinion) and thus unless energy production picks up materially, all sectors of society would eventually pay the piper. This would likely come in the form of widening the tax base, increasing efficiency of current tax collections & enforcement, increasing tax rates and reducing subsidies. These are all inflationary to households and so I urge, as I’ve done in many budgets in the past, these few but powerful action items.

· Establish and fully fund an emergency fund- TTD & USD based on your liabilities

· Ensure you are adequately funding risk assets for retirement and other personal and family goals.

· Ensure adequate insurance and risk management for your family and business situation

· Hedge your TTD assets, convert and maintain a healthy hard currency mix where possible.

If you have any doubt on how to go about making these changes or want to share your thoughts, feel free to reach out to discuss personalized strategies and financial plans.