$27.2 Million Loan from Multibank Cancelled by Panama City Hall
The Municipality of Panama City canceled the $27.2 million loan process with Multibank Inc. because the operation was tied to a highly controversial tax collection and debt contract. Originally stemming from a dispute over collection services, the financial maneuver sparked intense criticism for funneling municipal funds to pay a private contractor. While the municipality originally authorized Mayor Mayer Mizrachi, pictured above and below, to pursue the loan in September 2025, the contracting process was ultimately left without effect by mid-2026. The primary factors leading to the cancellation include:
- The Underlying Debt Origin: The loan was intended to pay off millions of dollars in accumulated debt owed to a private entity that had taken over municipal tax collection.
- Disproportionate Contractor Payouts: Public and legal pushback escalated when it was revealed the contractor’s compensation was drastically inflated through municipal addendums, allowing the firm to collect a lucrative percentage of the city’s actual revenue.
- Financial Restructuring: Complicating matters, Multibank Inc. was fully acquired and operationally absorbed by BAC, leading to administrative restructuring that disrupted the initial loan terms.
The Municipality of Panama City cancelled the contracting process to obtain a $27.2 million loan from Multibank Inc., a financial operation to settle a debt originating from a tax collection contract signed almost two decades ago. According to the resolution, the Municipal Treasury recommended suspending the process after holding meetings with the public financing team of the Ministry of Economy and Finance (MEF), which suggested evaluating credit alternatives with state entities to obtain better financial conditions.
The Mayor’s Office indicates that, following this analysis, the Savings Bank (Caja de Ahorros) presented a proposal considered ‘more favorable and convenient’ for the municipality.
