Sunday, April 5, 2020

Extending the Moratorium Act not enough to operate the government

By on January 5, 2017

SAN JUAN – Less than a month before the culmination of the Puerto Rico Emergency Moratorium & Financial Rehabilitation Act, which authorizes the redistribution of government revenue to ensure the continuity of its operations, the administration of Gov. Ricardo Rosselló hasn’t clarified whether it will extend the validity of the measure presented by the past administration.

To questions from Caribbean Business about whether it is possible for the government to operate without extending the local moratorium law, the governor said doing so wouldn’t be enough to ensure the continuity of government operations.

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Gov. Ricardo Rosselló (CB/Juan José Rodríguez)

“If we do nothing, even if [the moratorium law] is extended, I cannot operate the government. That’s what I want to emphasize…. The problem is broader and we need other tools,” Rosselló answered; however, “We have the situation under control,” the governor stressed.

Through this law – and a series of executive orders issued under the statute pushed by former Gov. Alejandro García Padilla and that are still in effect – the government of Puerto Rico took control of several revenue sources previously destined to repay the public debt. Along with the suspension of the payment of a large part of the public debt, redistribution of these funds has prevented a government closure amid a liquidity shortfall, the past administration assured on numerous occasions.

Meanwhile, Rosselló reiterated that alternatives are also being explored to provide liquidity to the government in the short term through access to external financing with help from the federal government and the U.S. Treasury.

“If we can, for example, collaborate with the Treasury and the federal government in some of these efforts, if we can work with some of the resources we haven’t captured, the conditions to be able to have liquidity in the short term can be created, at interest [rates] that aren’t onerous,” the governor explained.

Asked by Caribbean Business about a possible extension to the moratorium law early next week, Ramón Rosario, La Fortaleza’s secretary of public affairs and public policy, said all possible alternatives were being evaluated, including extending the moratorium law.

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