Panama debt continues upward surge

PANAMA’S Non-Financial Public Sector (NFPS) debt increased by $1.037 billion in a single month, according to the latest report from the Public Credit Department of the Ministry of Economy and Finance (MEF).
According to the report, in April 2017 the debt totaled $21,922.8 billion and, a month later, it amounted to $22,959.5 billion .
In May 2017, external public debt stood at $18,098.2 billion and domestic public debt at $4,861.3 billion, said the report.

Market instability
According to the MEF, during the fifth month of the year there was great instability in the capital markets, due to investors’ concerns about the results of the French elections, the continuing clashes between the United States and North Korea and the risks associated with the political tensions of the United States, after President Donald Trump fired the FBI director, James Comey, that affected the yields of the United States Treasury Bonds.
The rise in the rate of the US Federal Reserve for the month of June means that the cost of Panama’s public debt could be increased in the short, medium and long term.

Total debt
With the increase of the NFPS debt of the NFPS in May 2017,the new balance of the total debt of public entities and companies associated to the public sector that are known exceeds $30.059 Billion.
In addition to the debt of the NFPS, which amounted to $ 22.96 billion in May 2017, the Government has other financial commitments.

Until April 2017, national government debt due to financial commitments of institutions and companies that were separated from the NFPS amounted to $2,259 billion, accounts payable of turnkey projects were$1,130 billion and commitments to pay for sentences executed and arbitration where the State was condemned were at $93 million.
In addition, Panama Canal liabilities totaled $3,618 bllion in September 2016, according to international auditors Ernst & Young.
The Panama Canal Authority notes that the Panamanian State is not responsible for the Panama Canal debt.
For the turnkey debt , the MEF only presents accounts payable until 2019. After that Metro Line 2 and others State works will be paid through this financial mechanism.
It is also important to note reports La Estrellz that the Panama Canal has several demands that could impact its liabilities . TheGrupo Unidos por el Canal, contractor’s claims for the design and construction of the third set of locks, totaled about $3.4 billion. This means that the total debt of public entities may exceed the published figures.