Once again a warning has been given that without a fiscal agreement the country is at high risk of falling into debt default and losing access to international funding.
Elsalvador.com reports that "...Pedro Argumedo, from the Department of Economic and Social Studies at Fusades, said it is important to reach a Tax Agreement, as failure to do so would lead to consequences that would be 'terrible', and time is growing ever shorter."
After a failed attempt at restructuring, the process that began in September 2014 with the cessation of payments by the financial company La Generosa today ended with a judicial declaration of financial bankruptcy.
Prensa.com explains that"...The measure involves the seizure of all assets belonging to the company, the appointment of a executor and José Luis Ford being banned from leaving his home where the bankruptcy was finalised, which is effectively an impediment to him leaving the country. "
The government looks like it will be unable to cope with its obligations in the second half of the year, because "there is no money to make it to the end of the year."
Figures from the Salvadoran Foundation for Economic Development (Fusades) indicate that the current balance of government debt (Treasury bills) now exceeds $900 million, and to meet its obligations in the second half of the year $500 million more is needed, which will have also have to be borrowed.
A $2.7 million issue made by the UHR Development Company which intended to build a boutique hotel in the area of Bella Vista has been declared overdue.
In 2013 the company attempted to raise $12 million on the Panamanian stock market, but apparently, the issue was not attractive enough and they ended up raising only $2.7 million. Three years later, the issue has been declare past due, and should have been honored by UHR Development on 22 February 2016.
Creditors of the manufacturer of flexible packaging Yanber, agreed to receive the company as payment for debts owed to each of them in order to keep the business going.
The Yanber Corporation requested use of the Preventive Convention in order to suspend payments in June 2015 , with the aim of reaching a settlement with its creditors, in order to avoid falling into bankruptcy and to continue operating. With the current agreement, the company will become the property of a trust-owned by its creditors.
The manufacturer of flexible packaging and films which has a presence in several countries in the region and in Colombia, has filed for an agreement of suspension of payments in Costa Rica in order to avoid going bankrupt.
An article in Nacion.com reports that the company spokesmen said that the intention "...
Costa Rica is looking more and more like the European countries that still have not been able to resolve their critical tax situations.
Greece, Ireland , Portugal, Spain .... and Costa Rica. The current situation of Costa Rican public finances is starting to look more and more like that of the aforementioned countries, who five years after the outbreak of the crisis in Europe have still not been able to resolve their critical tax situations.
Today Ecuador became the first Latin American economy to be in default, following the global financial crisis that started in September.
The Andean country's risk shot up more than 4,000 points. The government of Rafael Correa says that they have the funds but do not want to pay as yet, since they are investigating "illegalities" in the contract for the debt that expires tomorrow.