Government will comply with the contributions of the FAP, says the Minister of the MEF

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By LatAm Reports Editor

According to Hector Alexander, the current administration will give the contributions of 2018, 2019 and 2023, for an amount that exceeds $375 million

The Minister of Economy and Finance, Hector Alexander, reiterated that the government will comply with the contributions of the Panama Savings Fund (FAP) of 2018, 2019 and 2023, for an amount that exceeds $375 million. 

According to Alexander, these resources will be given – despite the fact that the economic crisis resulting from the pandemic and other external factors have made it difficult to make funds available to address these commitments.

The statements were given on Monday, April 22, during his speech in the Committee on Economy and Finance of the National Assembly, in which he went to support Bill No. 1141, amending article 3 of Act No. 38, 2012, which establishes the legal framework of the FAP and seeks to exempt the Government from the payment of contributions to this fund for: 2020, 2021 and 2022.

The FAP, with a $1.4 billion estate, has remained unused during the current crisis. But, as the law is established, instead of providing resources to the country in times of need, it demanded that the National Government inject funds into it, making it even more difficult for the economic situation to go through, the minister explained.

Although the meeting of the Committee on Economics and Finance scheduled for Monday did not take place, Alexander stressed the importance of addressing this proposal.

I am confident that the debate will take place and the bill will receive the approval of the deputies, he said.

He stressed the need to reform the management of the FAP to ensure that it is aligned with its original purpose: to provide financial support in times of difficulty. This review seeks to ensure that the Fund is prepared to meet future economic and social challenges more effectively.

The head of the economy explained that thanks to an initiative proposed by him, it was possible to eliminate from the current FAP law, that since the assets of this fund were more than 5% of the gross domestic product, all the income it will generate would pass in favor of the general budget of the State to be used.

He added that the philosophy of the fund must be how it is capitalized in the best way to increase its heritage and that precisely in difficult times there can really be significant sums for them to be used by the government.

He rejected those opinions that spoke that the FAB had been used for political purposes, because the law only allows the use of these resources in specific situations. First of all of us have never used it politically. The law allowed us to take all the resources out of the FAP to use them in difficult times and we didn’t, he defended.

He stressed that the main concern has always been the capitalization of the FAP and has worked together with the Fund’s directive to find viable solutions, since it has increased by only $200 million in the last 29 years, when the Development Trust Fund was established. 

This article has been translated from the original which first appeared in Lapaginac