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Government Responds to Oversight Board’s Extension Conditions

By on January 23, 2017

SAN JUAN — The governor’s representative before the Fiscal Oversight & Management Board, Elías Sánchez, sent another letter to its chairman, José Carrión III, in reply to the conditions established upon the request for extension to present the fiscal plan.

The New Progressive Party (NPP) politician listed a series of aspects recommended in the Board’s missive, among them, that the government’s commitment is to work toward a “‘once and done’ approach that achieves structural balance.”

Elías Sánchez, the government's representative before the Fiscal Oversight & Management Board. (Juan J. Rodríguez/CB)

Elías Sánchez, the government’s representative before the Fiscal Oversight & Management Board. (Juan J. Rodríguez/CB)

Sánchez stated that this “once and done” approach may not be appropriate for a 10-year fiscal plan. He argued that fiscal planning documents are subject to change due to economic fluctuations and other variables, but that the administration was willing to adopt a second fiscal plan that extends for a longer or additional term.

The official assured that Gov. Ricardo Rosselló’s administration is committed to working alongside the Fiscal Oversight & Management Board toward developing and approving a fiscal plan that is consistent with requirements established by the Puerto Rico Oversight, Management & Economic Stability Act (Promesa), which established the oversight board.

He reiterated that the governor hasn’t requested, nor will he consider, short-term liquidity loans or near-term financings that could restrict fiscal options, opting instead for structural reforms and budget cuts.

See also: Rosselló says he has a ‘clear difference’ with Fiscal Oversight Board approach

Sánchez also assured that the administration is currently elaborating and applying a liquidity plan to address anticipated cash shortfalls throughout the duration of Promesa’s stay as approved by the board, “by no later than January 30th including the Government’s protocol for priority of payments and its public disclosure.”

In the meantime, the Puerto Rico Fiscal Agency and Financial Advisory Authority (FAFAA) is developing a liquidity plan with its advisers that complies with Promesa’s conditions, set to be released Jan. 27, and a 13-week “rolling cash flow forecasting report for substantially all government budgets should be put in place and delivered to the Board within two weeks and weekly thereafter.”

“In summary, we believe that this letter answers and satisfies all remaining conditions for the Board to provide the Government’s requested extensions, which are in the interest of the Government and people of Puerto Rico, as well as all Puerto Rico creditors,” Sánchez said at the end of his letter. “We believe that the Board shares the Government’s desire to achieve a consensual resolution of the issues facing Puerto Rico, and wishes to aid the Government in promoting growth and achieving the Island economic sustainability. We look forward to continue in this collaboration,”  he added.

Read Elías Sánchez’s letter to the oversight board here.

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