Press Release
The Fondo de Ahorro de Panama is strengthened with the approval of Law 51
Panama | October 10, 2018
The National Assembly approved today Law 51 of 2018, which introduces changes to Law 38 of June 5, 2012, which creates the Fondo de Ahorro de Panama ("FAP" or "Fund"), regarding its accumulation rule, among other changes. The main changes in the law related to the Fund are:
Strengthens the Fund with the contributions from the Panama Canal Authority ("PCA") under the following conditions: a) for 2018 and 2019, when the total contributions of the PCA to the National Treasury exceeds 2.5% of nominal Gross Domestic Product (GDP), and b) for 2020 and beyond, when the total contributions of the PCA to the National Treasury exceeds 2.25% of GDP.
Allow the capitalization (reinvestment) of future returns until the Fund’s patrimony exceeds 5% of the nominal GDP of the previous year.
Abdiel A. Santiago, Secretary of the Fund, commented that “these modifications to the Fund’s Law provide clear strategic steps towards the institutionalization, development, and strengthening of the Fund, and as an anti-cyclical tool for the benefit of future generations of Panamanians. In practical terms, and based on current estimates, the Fund could receive approximately B/. 150 million in new contributions over the next three years as a result of these changes to the Law.” (Note: B/. 1.00 = 1.00 USD.)
José N. Abbo, Chairman of the FAP’s Board of Directors, expressed that “for the Board these changes represent an important achievement. After six years since its creation, the Fund will finally be strengthened through organic growth and the entry of new contributions from the PCA. We believe that it is important to continue to explored for additional sources of new contributions to the Fund, such as: a) assets sales from the Administrative Unit of Reverted Property; b) profits, dividends, or other distributions from the Panamanian State’s equity participation in partially government-owned enterprises; c) concessions that the Panamanian State has granted in different services or economic activities (e.g. mining, telecommunications, etc.).”
About the Fondo de Ahorro de Panama
The Fund was created by Law 38 of June 5, 2012, whose main objectives are:
Establish a long-term savings mechanism for the Panamanian State; and
Establish a stabilization mechanism in case of a state of emergency (declared by the Cabinet’s Council) and economic slowdowns.
Contact: Administration, +507-394-5776/5706, administrador@fondoahorropanama.com
For additional information visit www.fondoahorropanama.com
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