Gov’t Development Bank Receives Cash Influx
SAN JUAN — The Government Development Bank (GDB) received this week $11 million from the local Treasury Department, covering part of its $120 million budgetary assignment for fiscal year 2017, spokespeople for the bank and Treasury confirmed Thursday to Caribbean Business.
Moreover, the GDB is also slated to receive an additional $11 million, or half of the $22 million received monthly from the petroleum products tax, also known as la crudita.
As of this writing, La Fortaleza had yet to comment to Caribbean Business’ inquiries over the disbursement to the GDB of la crudita funds. The Highways & Transportation Authority, which is also experiencing financial hardship, is receiving the $22 million monthly, and plans call for having the public entity transfer half of the money to the cash-strapped bank.
The maneuvers would mark the first significant inflows of cash that the GDB receives following strict restrictions imposed earlier this year by Gov. Alejandro García Padilla to the bank’s operations, in a bid to stabilize the troubled institution.
As of August, the bank’s liquidity stood at $160 million, GDB President & Chairman Alberto Bacó Bagué told this newspaper during an exclusive interview.
He explained at the time that along with Treasury Secretary Juan Zaragoza, they decided to divide the GDB’s budgetary allocation in 11 monthly payments of roughly $11 million each.
Over the idea of funneling to the bank funds from la crudita, Bacó said: “[Zaragoza] reaffirmed as well that half the payments of la crudita, which are around $22 million [monthly], would continue to be destined to operational use at HTA, and the other half would go to the GDB. This will provide additional liquidity,” Bacó said.
Some of the GDB’s real estate remains on the market, as efforts continue to capitalize the cash-strapped bank, the GDB chief added.
Meanwhile, the bank has a $10 million interest payment due Sept. 1, but sources say that the García Padilla administration was leaning toward missing the payment, as it did last month with a $28 million payment on its debt.
“It is very difficult for the GDB to make that [Sept. 1] payment,” one government source said, pointing to the cash inflow situation at the troubled bank.