Press Release

Bill Modifying the Law that Created the Fondo de Ahorro de Panamá 

Panama | April 4, 2024

The Board of Directors (the “Board”) of the Fondo de Ahorro de Panama (the “FAP” or “Fund”), Panama’s sovereign wealth fund, acknowledges the Ministry of Economy and Finance's (“MEF”) initiative to revise the legal framework governing the FAP, especially given its pivotal role during the pandemic, including a significant disbursement (learn more here and here) of B/. 105 million to address the urgent national needs prevalent at the time. Such contribution highlights the FAP's essential role as a financial safety net in crisis situations.

While recognizing the MEF's authority to propose modifications to the FAP's structure, we believe that major changes, such as altering the direct linkage between Panama Canal surpluses and the FAP's funding, warrant careful consideration. This includes the proposed conditions for future contributions to the Fund based on subjective fiscal deficit assessments. Consequently, we urge that the MEF's proposed legislative changes undergo thorough public debate and consultation with pertinent stakeholders.

The Board believes the pandemic's economic impacts, which justified the FAP's usage, ended in 2022. We therefore argue that decisions to waive outstanding contributions for fiscal years beyond 2020 to 2022, impacted by the pandemic, should be clearly justified. We affirm the necessity of fulfilling the obligations for 2018 and 2019 contributions to uphold integrity of the Fund's law.

As fiduciaries committed to the FAP's growth, continuity, and capital preservation, the Board champions an inclusive dialogue. We are convinced that such a collaborative approach will ensure the proposed law not only addresses the MEF's immediate fiscal concerns but also upholds the FAP's long-term viability and foundational aim of benefiting future Panamanian generations.

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.

For additional information visit www.fondoahorropanama.com

* The financial figures presented are expressed in Balboas, the currency unit of the Republic of Panama (B /.), Which is at par and freely exchangeable with the United States dollar (USD or US Dollar), considered the functional currency of Fondo de Ahorro de Panamá.

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