Panama’s Cabinet authorized the issuance of Treasury notes for $630 million to cancel the debt held by Panama's banks.  The resources will be paid through public debt securities to cancel debts for preferential interest granted by banks on mortgage loans and for tax incentives for restorations in the Old Town, reported President Laurentino Cortizo.  The banks will again receive public debt securities as part of the payment for the section of preferential interest granted on mortgage loans, as well as for tax incentives for restorations in the Old Town. 

In total, the banks will receive $651.5 million in these financial instruments, as reported by the President of the Republic, Laurentino Cortizo Cohen, on the social network X.  “I announced to bank representatives that the State debt of $651.5 million for preferential interest, and preferential interest for Restoration of the Old Town, will be canceled through Treasury Notes and via budget, without affecting the 2024 fiscal deficit,” the national leader said.  Later, the Presidency of the Republic reported that the Cabinet Council authorized the issuance of Treasury notes for an amount of up to $630 million for the payment of obligations derived from the preferential interest regime.  The Minister of Economy, Héctor Alexander, highlighted that with this operation, President Cortizo's administration leaves the debt with the banks "cleansed" in terms of preferential interest.  He recalled that when the president began his administration in 2019, he canceled the entire debt with the banks for more than $400 million. 

The funds collected in these issues of Treasury Notes will be for the payment of all tax credits validated by the Tax Incentives section of the General Directorate of Revenue as of January 31, 2024, to mortgage creditors with debts greater than B/.5.2 million of preferential interest derived from mortgage loans.  Part of the resources issued in securities will also be to recognize tax incentives for restorations in the Old Town of credit applications validated as of January 31, 2024.  This is not the first time that they have paid off the debt for the preferential interest tranches through securities.  In December 2023, the Government paid $208 million to the banks with treasury notes that were traded through an issue on the Latin American Stock Exchange Latinex.