Fiscal team details plan of action to restructure Puerto Rico debt

The Government of Puerto Rico is in the process of presenting its new fiscal plan to address the economic crisis, now for the first time since the appointment of the Financial Oversight and Management Board for Puerto Rico. The missing audited statements from 2015 are still making an impact, and will likely remain a topic of contention.

As part of the “Perspectives and Agenda on the Debt” panel, the Fafaa official and the governor’s representative before the Fiscal Oversight & Management Board, Elías Sánchez, emphasized the importance of validating the government’s numbers, which were last audited time in fiscal year 2014.

“The dates imposed by the board [to present the fiscal plans] are very aggressive. Is it realistic to present a 10-year fiscal plan—with the macroeconomic impacts it entails—in 28 days? Perhaps it isn’t the best timetable. Does this process without audited statements for 2015 and 2016 have credibility? That is a good question,” Sánchez said during the panel.

However, the official added that the administration will publish the pending audited states as soon as possible, while it works “hand in hand with the board” to obtain accurate numbers that will allow the government to achieve consensual agreements with its creditors.

Meanwhile, Government Development Bank (GDB) President Christian Sobrino assured that the entity is looking for ways to stabilize and maximize the institution’s value, identifying a consistent and realistic cash flow for the bank, within the central government’s fiscal framework.

Reacting to those who say the GDB “should close now,” Sobrino warned that such a decision can’t be made “in a week” because that would entail millions of dollars in losses for both the government and the bank’s creditors.

Politically, expect a continuing debate over austerity measures demanded by the Oversight Board and a middle class squeezed by tax increases and stagnant wages.