Financial Oversight and Management Board for Puerto Rico releases 2025 annual report

The Financial Oversight and Management Board (FOMB) for Puerto Rico has released its 2025 Annual Report. It claims that PROMESA (Puerto Rico Oversight, Management, and Economic Stability Act) has generated $76 billion in savings for the islands through debt restructuring, spending controls, and avoided legislation. PROMESA is a 2016 US federal law created to help Puerto Rico manage its massive debt crisis by establishing a federally appointed board, FOMB, to enforce fiscal discipline and provide a path for debt restructuring. This act created a form of territorial bankruptcy, giving the board significant power over Puerto Rico’s budget and financial decisions, fundamentally overriding local governance in fiscal matters to achieve stability and access to capital markets. According to the report, these measures reduced Puerto Rico’s annual debt service from $4.2 billion to $1.15 billion, stabilized government finances, and eliminated years of structural budget deficits. 

FOMB attributes these savings to 12 completed debt restructurings, which cut nearly 60% of total public debt, and strict oversight of budgets and legislation. The report states that government spending has been held to a growth rate well below US state averages and that Puerto Rico now maintains emergency and disaster reserves exceeding $2 billion. This is a sharp contrast from the near-empty treasury the islands faced when PROMESA was first enacted.

Beyond debt reduction, the Board emphasizes investments it helped shape, including expanded Earned Income Tax Credit (EITC) benefits and increased funding for healthcare, education, transportation, and public safety. These investments, according to the report, aim to boost labor participation and improve essential public services while avoiding a return to deficit-driven spending.

Still, the report makes clear that fiscal recovery remains fragile. Puerto Rico continues to rely heavily on non-recurring federal funds, particularly disaster and pandemic aid, which currently represent a significant share of government revenues. As these funds begin to expire, FOMB warns that sustaining balanced budgets will require stronger internal fiscal discipline and long-term planning by the local government.

Transparency also remains a concern. In March 2023, Senator Rick Scott (R) emphasized improving the transparency and accountability of the FOMB through legislation to support a more prosperous Puerto Rico and increased oversight of taxpayer dollars. Audited financial statements have been issued with long delays, limiting public oversight and making it difficult to independently verify claims of fiscal progress. FOMB acknowledges that many of the reforms it imposed—from budget controls to debt management policies—must still be fully institutionalized to prevent a reversal once federal oversight ends. 

Critics of PROMESA argue that while macro-level savings are substantial, many Puerto Ricans continue to feel the effects of austerity, like economic contraction, drastic cuts to public services, and increased poverty and inequality through strained public services and reduced local decision-making power. A major critic of the FOMB is the Acre Institute, which claims, “The Board’s debt restructuring plans are unsustainable and, even based on the Board’s own estimates, would result in deficits as early as 2036.” FOMB counters that its operational costs, approximately $1.5 billion since 2016, amount to less than 1% of total government spending and that each dollar invested in PROMESA has generated an estimated $38 in financial benefits.

As Puerto Rico approaches the next phase of its fiscal recovery, the question is no longer only whether PROMESA stabilized the government’s finances, but whether that stability will translate into durable economic growth, democratic accountability, and tangible improvements in the daily life of the people of Puerto Rico.