Thursday 6th June 2024.

June 5, 2024


President José Raúl Mulino will assume his mandate facing a monumental financial challenge: more than $14,000 million are required to cover pension payments in the next 10 years.

A revealing report from the Actuarial Technical Board , dated May 31, delivered to the Ministry of Economy and Finance (MEF) and the board of directors of the Social Security Fund (CSS) , reveals the serious situation of the exclusively benefit subsystem defined Disability, Old Age and Death (IVM).

The report, to which La Prensa had access , indicates that “time has run out and decision-making for the Disability, Old Age and Death regime cannot be delayed. Postponing the decision will have serious economic, political and social consequences for the country .”

This report is based on the 2021 financial statements, but was carried out in 2024 in the absence of one of the three actuaries who must make up the board.

On January 12, the outgoing president, Laurentino Cortizo, appointed Lineth Rodríguez as actuary, whose position expires in 2029. After her arrival, and with a full actuarial board, the report was made.

The economic team of President-elect José Raúl Mulino is supposed to already have this report, when they meet on Tuesday, June 4, with Minister Héctor Alexander.

Without a doubt, the pension crisis is one of the great challenges that the Mulino government will face, who inherited a dragging problem that was not resolved by any of the last three governments: neither that of Ricardo Martinelli, nor that of Juan Carlos Varela, nor the by Laurentino Cortizo.

The purpose of the actuarial report is to alert both the CSS board and the central government of the financial situation of the pensions.

The crisis is more alarming as the years go by. Both the current report, based on 2021 data, and the past actuarial analyzes (from the years 2018, 2019 and 2020) show the “financial fragility” of the subsystem.

Actuaries Luis Pimentel, Eduardo Rodríguez and Lineth Rodríguez come to the conclusion that the financial gap is so large that it is not possible to see the magnitude of the IVM deficit if measures are not taken to balance it.

“After 10 years we see that the growth of the deficit is accelerating, going from $2,511 million per year to levels of more than $5,617 million per year, in 2049.

The Actuarial Technical Board indicates that both its projection scenarios and those of the CSS Actuarial Department reach the most important conclusion of the report: the reserves of the exclusively defined benefit subsystem and the trust were exhausted between the last quarter of 2023 and the beginning of 2024.

The end of the reserves is the most critical moment for the CSS. As payments to retirees increase each year and the income from the worker-employer quota designated for this program is not sufficient to meet these commitments, money is taken from reserves or savings to pay pensions.

The suspension of the tender for the construction of phase 1 of the new National Cancer Institute (ION) was lifted by the General Directorate of Public Procurement (DGCP) .

The decision of the DGCP was adopted after resolving the claims presented to the public event and after the Ministry of Health (Minsa) , the bidding entity, sent Addendum No. 4 to said address, by which corrective measures are applied to the specifications. of charges.

The date of presentation and opening of the proposals is scheduled for June 25, as stated on the Panama Compra portal.

The tender for phase 1 of the new ION was published on February 15 on the Panama Compra portal, and companies were expected to present their proposals last April. Meanwhile, the prior meeting and approval was held on March 22, with the participation of 22 company representatives, who requested an extension of time to prepare their proposals, however, complaints arose.

The cost of phase 1 of the project amounts to $72,737,233, an amount requested by health authorities during the discussion of the 2024 budget. However, the budget assigned by the Minsa for this year for the work is only $20 million. The next government administration of José Raúl Mulino plans to continue with the bidding. This was stated by the president-elect during a visit to the ION on May 31.

Mulino said that “his visit confirms and reiterates the commitment to this hospital that is so important for the country.” He also reiterated the commitment in his mandate – which begins on July 1 – to build the new Oncology hospital.

José Ruiloba Pineda , former candidate for deputy of the Democratic Revolutionary Party (PRD) , and Alejandro Pérez , former candidate for deputy of Realizing Goals (RM) , paid in cash the $25,000 of the bonds necessary to challenge elected deputies in their circuits.

Ruiloba Pineda, nephew of PRD deputy Raúl Pineda, challenged the four deputies of the Vamos coalition in the 8-2 San Miguelito circuit : Eduardo Gaitán , Luis Duke , Alexandra Brenes and Yarelis Rodríguez.

Pérez, who inherited the candidacy for deputy from former president Ricardo Martinelli, attacked the five elected deputies of the 8-4: Roberto Zuñiga and Jorge Bloise , from Vamos; Grace Hernández and Ernesto Cedeño , from the Otro Camino Movement; and Javier Sucre, from the PRD.

“For me, the issue of challenges has the purpose of ensuring that we (the independent deputies) are not present on the day of the vote to choose the president of the Assembly. And it catches my attention to see in the file the way the bail was paid, in cash. “It’s something that really catches my attention,” Alexandra Brenes, one of those contested in the 8-2, told La Prensa .

On July 1, the day a new Assembly is installed and José Raúl Mulino takes office as president of Panama, the new board of directors of the Legislature will be chosen. Luis Eduardo Camacho , elected representative of the 8-2 circuit for Realizing Goals, is seeking votes for the presidency of the Assembly.

Panama won an arbitration claim filed before the International Center for Settlement of Investment Disputes (ICSID) by a Dutch investor, which demanded compensation of at least 60 million dollars, for the intervention and liquidation of a brokerage house, reported this Wednesday the Panamanian Government.

The international investment arbitration claim was filed by Dutch investor Jochem Bernard Buse, founder, CEO, president and majority shareholder of the Panama Wall Street (PWS) brokerage house.

Buse sued Panama in 2017 under the Bilateral Investment Treaty between the Netherlands and Panama, arguing that the inspection, intervention and liquidation of PWS by the Superintendency of the Securities Market (SMV) violated the aforementioned agreement and deprived it of its investment, explained a statement from the Ministry of Economy and Finance (MEF).

Buse, who accused Panama of allegedly failing to comply with its obligation to provide fair and equitable treatment, “claimed compensation of at least $60 million, plus interest and moral damages.”

“After a multi-year arbitration procedure, which included the presentation of multiple rounds of briefs, precautionary measures, documentary production phases, a hearing held in November 2021 and a second closing hearing in March 2022, Panama achieved a resounding victory. for the State, getting the Court to completely dismiss all of Buse’s claims, and denying him the requested compensation,” the MEF indicated.

Currently, the Ministry of Economy and Finance (MEF) is working on a bill to remove one balboa coins, known as “martinellis,” from circulation.

This was announced this Wednesday, June 5, 2024 by the general manager of the National Bank of Panama (BNP), Javier Carrizo Esquivel , who said that this project is being addressed as a matter of urgency.

The measure would be due to the counterfeiting of these coins.

Carrizo Esquivel specified that the designated minister of the Ministry of Economy and Finance, Felipe Chapman, is already aware of this issue and the results would be seen in the coming months.

“The MEF is working on a bill to withdraw these coins quickly. In the meantime, keep them in the piggy bank,” she commented. The coins mentioned by the BNP general manager were issued in 2011.

Carrizo Esquivel will continue as manager of the BNP by appointment of the elected president José Raúl Mulino, whose term begins next July 1. His statements were given in an activity organized by the BNP, where the entity detailed the achievements and results of the 2019-2024 five-year period.


More articles