Puerto Rico gov’t works on cash reserve to avoid furlough
SAN JUAN – The Puerto Rican government has already identified $120 million of the $200 million it needs to fulfill a cash reserve requirement when the new fiscal year begins July 1. The latter would avoid a cut to public employees’ workdays and the elimination of their Christmas bonus this year, as required by the fiscal control board.
“We already have $120 million. We’ve been working on that,” Gov. Ricardo Rosselló said, while explaining that the information is part of the updated liquidity plan the administration submitted to the board on April 30. This document had to demonstrate how the government would have the reserve ready by June 30.
The government has said that this document—like the next general fund budget and the schedule for implementing the measures of the certified fiscal plan—will not be made public yet, as reported by Caribbean Business.
Meanwhile, Treasury Secretary Raúl Maldonado said the liquidity plan includes measures to address the financial needs the government historically has during the first months of a fiscal year.
During the past two years—after losing access to capital markets—the government borrowed money from certain public entities to cover its needs. However, that mechanism is no longer able to be used since the government has been unable to pay the nearly $400 million it obtained from three public entities last summer.
“The liquidity plan already contemplates the lack of funds during that period. What was done is that with the operational savings [reached], something additional […] to the $200 million is being separated,” Maldonado said, adding that the latter explains why the government’s current liquidity “exceeds a billion dollars.”
“It was specifically planned for that lack of liquidity [at the beginning of fiscal year],” the official said.