Press Release

The Supervisory Commission of the Fondo de Ahorro de Panama issues its Opinion Report for the Fiscal Year 2019

Panama | June 29, 2020

The Supervisory Commission (the “Commission”), the representative body of civil society, issued in June 16, 2020 its Opinion Report for the Fiscal Year 2019 (the “Report”) regarding the administration of the Fondo de Ahorro de Panama (“FAP” or “Fund”).

The Report – per the provisions of Law 38 of June 5, 2012, that creates the FAP (the “FAP’s Law”) – is issued annually to evaluate the Fund and its management model, corporate governance, financial results, and main strategic goals (access the 2019 Opinion Report here, in Spanish only).

In the Report, the Commission concluded that the Board of Directors and its Executive Team’s management of the Fund has been performed in accordance with the spirit and objectives defined in the FAP’s Law (and subsequent modifications). In particular, the Commission observed that the Board of Directors continues to apply sound prudential criteria in the management of the Fund’s investments, in accordance with the directives established by the Ministry of Economy and Finance, representative of the Republic of Panama and owner of the FAP's assets. The Commission highlighted that the Board’s actions not only protect the Fund, but also help grow its Foundational Capital (initial capital).  

The Commission, chaired in the current period by the Representative of the National Council of Private Enterprise, expressed that “this Report seeks to provide the Government with an objective perspective of the Fund’s value proposition to the Panamanian people, and the importance of continuing to strengthen the Fund’s through organic and new capital growth.”

Regarding the national economic crisis as a result of the current COVID-19 pandemic, the Commission recognizes in the Report that the FAP was created to attend precisely this type of national emergencies; nevertheless, the Commission points out that the possible use of the Fund’s assets to address the current emergency should be done in a way that broadly impacts the majority of Panamanians. The Commission further stressed that any potential use of the Fund to address the crisis should be accompanied by adequate guarantees from the government that the amounts used are returned to the Fund according to a set schedule.

The Report considers other aspects of the Fund’s management, among others:

  • New Capital Growth: the incorporation of new capital to the Fund through the contributions from the Panama Canal, the sale of partially sate-owned enterprises, and certain real estate assets around the Panama Canal.

  • Organic Growth: allowing the Fund to reinvest its earnings.

  • Risk Mitigation: purchasing catastrophic insurance coverage to hedge the contingency risk derived from the financial exposure inherent in natural disasters.

Members of the Commission
The Commission is composed of representatives of the following organizations:

  • The Association of Certified Public Accountants of Panama;

  • The Association of Economists of Panama;

  • The Ecumenical Council of Panama;

  • The National Council of Organized Workers; and

  • The National Council of Private Enterprise.

 

About the Fondo de Ahorro de Panama
The Fund was created by Law 38 of June 5, 2012, whose main objectives are:

  1. Establish a long-term savings mechanism for the Panamanian State; and

  2. 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
 
 
###