News
Wednesday 13th December 2023.
December 12, 2023
The challenging economic environment, with excessive expenses and limited income, has put Laurentino Cortizo ‘s government in trouble to achieve fiscal goals and not exceed the deficit limit allowed by law.
At the end of November 2023, finally, accumulated current revenues totaled $7,295.2 million, reflecting a surplus of $25.1 million compared to the budget.
Thus, November breaks the streak of deficits, which in October was $366.4 million compared to the budget, according to the latest report from the General Directorate of Revenue (DGI).
The accounts register a deficit when income is not sufficient to cover public sector expenses.
On the other hand, when there is a surplus it is because the income was above the expenses that must be assumed.
“On this occasion, it is a temporary surplus, and is not recurring, due to the payment from Minera Panamá,” reaffirmed the former Minister of Economy, Dulcidio De La Guardia.
In October, the State received $567 million from Minera Panamá, as a result of the obligations established in the law contract declared unconstitutional, which will not be used by the Government and will be kept in a restricted account in the National Bank of Panama.
Of the total $567 million, the General Directorate of Revenue received the sum of $562.8 million from Minera Panamá. And additionally, the Ministry of Environment and the municipalities of Donoso and Omar Torrijos Herrera received $4.2 million that correspond to the payment of water use, surface fee and use and easement rights.
The tax report for the month of October was published on December 11, just when the November report was published, under the coincidence that it was the last report that marked a surplus.
In 2023, the Government also gained oxygen when it received funds from the sale of land to the Panama Canal Authority (ACP) for nearly $500 million.
With these resources, the entities are financing payments for expired terms, environmental emergencies and other obligations, ranging from fuel subsidies and digital vouchers to state advertising.
Tax revenues represented 74% of total current revenues.
According to the DGI report, the accumulated tax revenues as of November 2023 were $5.4 billion, which represents a deficit of $19.8 million, compared to the budget. Although compared to the previous year they increased by $604.8 million.
All sectors of the country are waiting for the amount of the General State budget to be revealed that should come into force next year, an electoral year with many fiscal challenges.
And, with less than 20 days until the end of the year, the final amount has been the best kept secret by the Ministry of Economy and Finance (MEF), who despite multiple inquiries by this newspaper, has not provided the amount thereof, nor the percentage reduction of the budget project initially sent to the National Assembly in the middle of this year and estimated at $32,754 million.
The aforementioned budget project was approved at the end of July by Laurentino Cortizo’s Cabinet and sent the following month to the Assembly, which began its discussion and even heard support from several entities.
However, the support was suspended and, immediately afterwards, the Budget Commission chaired by Benicio Robinson, sent a resolution to the Executive requesting the relocation of almost $800 million to the benefit of certain ministries, to the detriment of other agencies.
Then the crisis over the mining contract broke out, prompting MEF Minister Héctor Alexander to announce to the face of the country that the 2024 budget would no longer be for the amount originally proposed, but for “significantly less.”
And at this point the process has been blocked to give way to uncertainty. The MEF refuses to publicly announce how much the new “significantly smaller” budget it will propose is, if it ever proposes it, and the Executive has not said when it will call extraordinary sessions either. A MEF source announced that it will be after Christmas, which would practically reduce the discussion window to less than a week.
Has the Executive lost political capital in the Assembly? This question arises given the Government’s apparent inaction regarding an issue as important as the budget, pivotal because it is an electoral year whose use will be divided between two administrations, the outgoing Cortizo administration and the incoming one that wins the May 2024 elections.
The MEF’s initial proposal of more than $32 billion was also stated in another context: the MEF calculated it based on economic growth of more than 7% for this year, which has already been adjusted by several organizations and economists to less than 6%. %, something that should be reflected in the adjusted budget.
Economist Felipe Argote thinks that the minimum growth this year will be 4% “despite the corruption and inability of the PRD,” while economist Felipe Chapman calculated a growth of 5.5%, adjusted downwards from his original forecast. which was above 6%.
On the other hand, the initial proposal sought to return to the path of fiscal consolidation, reducing the proportion of debt from 64.7% of GDP in 2020 to 53.4% of GDP by 2024, a great challenge in the current circumstances.
Panama’s capital market is sensitive to the effects of local and international economic measures and anticipates risks.
The cessation of mine operations, added to the concern about a possible loss of investment grade, the fear that the fiscal deficit limit will not be met, in addition to the environment of high interest rates and a slower pace of economic activity will have an impact on the perception and mood of investors.
This is what capital market spokespersons consider, indicating that in 2024 investors will be more cautious when issuing and placing issues, in addition to the fact that the cost of funding or financing will be higher.
“The impact of the crisis has been felt. It remains to be seen how this process concludes. The list of issuers has been contained. Others who have continued with the process and some have not made placements due to the issue of the increase in rates and because they are seeing how the process will end,” admitted Olga Cantillo, president of the Latin American Stock Exchange (Latinex), in a meeting with the media about the capital market outlook.
The National College of Pharmacists presented this December 12 a criminal complaint against the director of the Social Security Fund (CSS), Enrique Lau Cortés , and the administration officials who are involved in the actions by commission or omission in which they have incurred and who intend to divert to health professionals, doctors, pharmacists, among others, the loss of fentanyl vials, a controlled use drug, in the institution.
As will be remembered in this case, the director of the CSS filed a complaint with the Public Ministry and audits were carried out both by the institution itself and by the Ministry of Health (Minsa), which led to more than 110 officials being under investigation. administrative.
The pharmacists’ complaint arises days after it was learned that a new position of compliance officer was created at the CSS in the facilities’ pharmacies, following recommendations from the Drug Enforcement Administration (DEA).
The National College of Pharmacists considers the de facto creation of an official called “compliance officer” as an administrative interference, given that it is not approved within the structure of the institution and that, by law, this function corresponds exclusively to the National Directorate of Pharmacy and Drugs of the Minsa.
Furthermore, the union, in response to the participation of the DEA in the CSS investigations into the fentanyl case, within the complaint is requesting the Public Ministry to certify that this permit had the approval of what the Treaty provides. of Mutual Legal Assistance, given that, if this has not been the case, there has been interference in the internal affairs of our country.
The World of Coffee , one of the most important trade fairs, will take place in Panama from October 23 to 25, 2026.
It will be the first time that this event will be held in Latin America, reported the Chamber of Commerce, Industries and Agriculture of Panama (Cciap).
It will take place at the Panama Convention Center , located on the Calzada de Amador.
“This coffee commercial exhibition includes an area for a business conference, training sessions where workshops and a specialized congress will be held on various topics, such as trends in the industry, preparation methods, sustainability, innovation and more,” detailed the business union.
The international barista competition will also be held, where coffee professionals from all over the world will participate.
“World of Coffee is Europe’s leading coffee gathering and one of the world’s preeminent coffee events, bringing together thousands of coffee professionals and enthusiasts over three days for a celebration of specialty coffee,” the chamber added.
This event is organized by the Specialty Coffee Association. Recently, Cciap, the Specialty Coffee Association and the Specialty Coffee Association of Panama (SCAP) signed a memorandum of understanding to organize the World of Coffee in Panama.
“This is an excellent opportunity, that our country has been selected for the first edition of the World Of Coffee in Latin America, where Panamanians will be able to show the world the great potential of the exportable offer that we have and promote our high-altitude coffee, which It is a source of pride, particularly in recent years, when he has had positive behavior with the specialized geisha,” said Adolfo Fábrega, president of the Chamber.
According to the union, coffee represents 0.4% of the Gross Domestic Product (GDP) of Panama. However, Cciap detailed, thanks to the production of specialty coffees, which in 2021 was priced at a record price of $2,568 per pound in an electronic auction, the country has entered the luxury coffee market.
In 2021, Panama imported $11.2 million in coffee, becoming the 88th importer of this grain in the world, the organization said.
Passenger traffic through Tocumen International Airport reached 16.2 million travelers between January and November, which represents an increase of 13.2% compared to the 14.3 million passengers transported in the same period of 2022.
In November the number of passengers who traveled through the Panamanian terminal increased 10.3% to reach 1.5 million people, compared to the 1.3 million transported in the same month last year.
Raffoul Arab, general manager of the Tocumen International Airport, said that in the first 11 months of 2023 they equaled the historical passenger record of 2019. “Everything indicates that at the end of December we will register a new annual record of more than 17 million passengers.” “, said.
The markets with the greatest regional movement in November were South America with 46%, followed by North America with 27%, the Caribbean 12%, while Central America contributed 11%, and European markets contributed with a 4% share.
Currently, 31 airlines operate in the air terminal, of which 15 operate cargo and 17 transport passengers.
As of November, there were 87 international destinations between cities in America and Europe. 73% of the passengers who traveled through the terminal did so via connection and the rest exited and entered the country.