New Government: Optimism in the First 100 Days

The gradual abolition of price control, the creation of the PPP regulatory framework and greater flexibility in preferential interests in the housing market are the advances recognized by Panamanian businessmen in the first 100 days of the Cortizo era.

Tuesday, October 8, 2019

Laurentino Cortizo of the Democratic Revolutionary Party (PRD) won by a narrow margin, concentrating 33.2% of the vote, with a promise to create more favorable conditions that would allow the economy to reactivate at the beginning of May. He was followed by Romulo Roux of Democratic Change with 31%, independent candidate Ricardo Lombana with 19.1% and in fourth place official José Isabel Blandón only managed to capture 10.6%.

Cortizo's electoral victory took place against a backdrop of economic slowdown in Panama, given that in 2018 the country's Gross Domestic Product reported a 3.7% year-on-year growth, far from the 11.3% and 9.8% increases reported in 2011 and 2012, respectively.

One of the first actions taken by the Cortizo administration was to gradually abolish the price control system, since at the beginning of July it decided to reduce from 22 to 14 the number of products whose transaction values are regulated.

According to Jorge Juan de la Guardia, president of the Chamber of Commerce, Industries and Agriculture of Panama (CCIAP), in these first 100 days of government, "... there has been an important boost to tourism and to the initiatives on laws that, like those of Public-Private Associations (APP) and the presentation of the project of reforms to the law of Public Contracting, they are directed to stimulate our economic dynamics."

The expansion of benefits in the real estate market is another of the actions that has been well received, since in September a bill was approved that establishes that, for the purchase of homes worth between $120,000 and $150,000, the government will assume 2% of the bank interest, and in the case of real estate between $150,000 and $180,000, the exoneration will be 1.5%.

The CCIAP statement adds that "... During this period, the fulfillment of promises made by the President of the Republic has taken place in different aspects, several of them aimed at promoting the reactivation of the national economy, such as the management of funds for pending payments with contractors and agricultural producers; we expect to know in the coming days how the payment schedule will be given to other suppliers."

More on this topic

Real Estate Fair: Optimism for Changes in Law

November 2019

Encouraged by the recent expansion of the sales price range of homes that apply preferential interest rates, Panamanian businessmen remain optimistic for the Expo Inmobiliaria Acobir 2020.

At the end of September 2019, Laurentino Cortizo gave the go-ahead to the law that establishes that for the purchase of homes with a value between $120,000 and $150,000, the government will assume 2% of the bank interest, and in the case of real estate between $150,000 and $180,000, the exoneration will be 1.5%.

Approval for PPPs

September 2019

After passing the three debates in the National Assembly, President Cortizo sanctioned the law creating the Public-Private Association regime in Panama.

According to the Law that came into the hands of the Executive, companies that are delinquent in the payment of fines for breach of contracts, will have limitations to participate in these public concession model.

Construction in Panama: Better Expectations

July 2019

President Cortizo announced the implementation of a plan that contemplates expanding the preferential interest rate for homes with prices of up to $180,000.

During his inauguration, Laurentino Cortizo announced that he will implement a plan to reactivate the construction industry, which includes the extension of the preferential interest in different ranges for housing up to $180,000, the presentation of a real estate leasing bill and exemption from transfer tax for the current inventory of housing, among other actions.

The Cortizo Era Begins

July 2019

Laurentino Cortizo, who came to power after promising a campaign to reactivate the economy, make constitutional reforms and make structural changes in several entities, assumes the presidency of Panama on July 1.

Laurentino Nito Cortizo Cohen, a member of the Democratic Revolutionary Party, won the presidential elections by a narrow margin at the beginning of May, concentrating nearly 33% of the votes.

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