Bacó-Bagué Accepts Interim Presidency of Ailing GDB
SAN JUAN — Economic Development Secretary Alberto Bacó-Bagué has been appointed interim president of the Government Development Bank (GDB) effective Monday.
La Fortaleza confirmed to Caribbean Business Saturday night that Gov. Alejandro García Padilla had made the recommendation to the bank’s board, which unanimously accepted it Sunday afternoon.
Bacó-Bagué said his priority as head of the entity will be that “the GDB be reborn as an institution in the service of economic development, inserting itself and working in collaboration with the fiscal control board with respect to economic development.”
In a statement Sunday, Bacó-Bagué said, “I have consistently argued that the GDB had focused its efforts on addressing fiscal issues and that the vision of economic development within the institution had been relegated to a secondary role. I see an opportunity here to refocus and restructure the bank’s priorities to turn it into a more effective tool to generate economic activity and growth.”
When officially announcing the recommendation of Bacó-Bagué to the bank’s management Sunday, La Fortaleza said, “Bacó-Bagué possesses the know-how and necessary experience to lead the entity amid the critical period it is going through.”
CB sources had said the board approved the designation of Bacó-Bagué on an interim basis amid the departure of former GDB President & Chairwoman Melba Acosta, who officially left her post Sunday, having announced her resignation earlier this month.
CB’s sources added that Bacó-Bagué—who was already on the bank’s board—will only serve for at most a couple of weeks while La Fortaleza continues to vet potential candidates to preside over the bank permanently.
While participating in the Democratic Party’s national convention in Philadelphia this week, García Padilla told CB that his administration is “evaluating various candidates. We have talked to some of them and they are willing [to accept the offer].”
What’s more, when Acosta departs, the GDB board will be left with four of its seven seats vacant. In addition to Bacó-Bagué, Rafael Vélez Pérez and Carlos Bonilla Agosto are the only other board members and represent the private sector. As first reported by Caribbean Business, the under-the-radar appointments of Vélez and Bonilla were made by La Fortaleza on May 17.
Meanwhile, La Fortaleza has yet to announce whether the GDB will pay more than $20 million on interest due Monday, Aug. 1, despite a moratorium placed by executive order on the bank’s debt payments.
As previously reported, the bank’s board reconvened this week and gave the go-ahead to make the payment, as it has done so for the past few months—a move aimed at protecting local bondholders, who own mostly bank debt, officials have previously said.
On Thursday, García Padilla had told Caribbean Business that he was waiting to hear from the bank’s board before making the call. The governor needs to green-light any interest payment to be made by the public financial institution, as provided by the moratorium order.
The bank continues to see its liquidity levels dwindle—hovering around $200 million—and strict cash-outflow restrictions aimed at stabilizing the troubled bank imposed by the García Padilla administration a few months ago.