Complications arise with Puerto Rico’s finances
The clashes between the Financial Oversight and Management Board for Puerto Rico and creditors are not new, but recently the clashes are becoming more visceral and frustrating to both sides. Recently the creditors have been making claims that the approval of a Puerto Rican government centric budget plan is unfair and unethical of the board. The holders are claiming that while they will be receiving some pay that the government has more to pay with than they are letting on. According to the debt holders the approval of this plan breaks good faith. This is putting not only the Puerto Rican legislators and Governor Rosselló at odds with the bondholders, but also with the board. On top of this problematic complaint, Popular Democratic Party House minority leader Hernandez Montanez also sent a letter to Congress indicating his unhappiness with current financial plans asserting that it is markedly unfair to Puerto Rican business holders to keep them in limbo like this where they have no idea whether they will be inundated with new taxes or relieved of taxes.
The Rosselló administration has responded to allegations saying that they were concerned about the letter and that the accusations made by the bondholders was troubling and that it “ignored the good faith efforts” that the administration had made. The bondholders claim that there has been and will continue to be a complete lack of transparency in the dealings unless congress steps in to take control of the board and the administration and reveal the declarations and intentions of each part of the process. So far there has been an order to complete a creditor matrix by June 30 and complete list of creditors by August 30. Though no discrepancies have been found so far the debtors are determined to receive a better deal on their investments.
This is on top of the deteriorating relationship between the administration and the board in regards to the boards belief in the strength and resolve of the administration to redirect the islands out of poverty. From the administration has stated that similarly to the creditors statement above that they have acted with unwavering commitment to the crisis. The board has become nervous about furloughs, and Christmas bonuses but the Rosselló administration is reminding them that under the approved plan this would not be an issue.