Panama's Sovereign Fund

According to government projections, Panama's future sovereign fund will have $12.5 billion in assets by 2025.

Tuesday, February 28, 2012

This fund will be used to combat natural disasters or adverse economic circumstances.

"Every year, of the contributions generated by the Canal to the State, a portion will go to the National Treasury - the equivalent of 3% of gross domestic product (GDP) - and anything in excess of that amount will be saved" in the sovereign fund, explained Prensa.com.

"The sovereign fund was created in order to have a cushion to fall back on if the country suffers from a natural disaster or suffer a sharp economic slowdown, but it will not be used for just any circumstance."

The assets of the Trust Fund for Development, which have a value of between $1.2 billion and $1.3 billion, constitute the seed capital for the sovereign fund.

The Minister of Economy and Finance, Frank De Lima, will submit a draft on the fund to the cabinet which will then progress into development of a bill that, hopefully, will go to Parliament in April.

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More on this topic

A Sovereign Fund for Guatemala

July 2012

In order to accommodate the financing of major infrastructure projects, the government is proposing the creation of a fund made from oil and mining royalties, and contributions from state enterprises.

According to Ricardo Barrientos, the former deputy minister of Finance in the previous administration, "The idea is good but it needs more discussion."

Panama Savings Fund Approved

June 2012

The bill received final passage on its third reading in the National Assembly with 41 votes in favor, 19 against and zero abstentions.

A statement from the National Assembly reads:

Panama Savings goes to Executive for approval

With the enactment by the Executive Body, Bill number 483, which creates the Panama Savings Fund (PSF), will become law of the Republic, after it was approved with 41 votes in favor, 19 against and zero abstentions, on the third reading by the full National Assembly of ministers.

YES to Panama Savings Fund

May 2012

The Panamanian Chamber of Commerce supports the creation of a sovereign fund and recommends separate discussion of matters relating to limiting the fiscal deficit.

A statement from the Chamber of Commerce, Industries and Agriculture in Panama (CCIAP) reads:

The Chamber of Commerce, Industries and Agriculture of Panama, agrees with the establishment of a Savings Fund for Panama and recommends that the National Assembly have a separate debate over matters relating to the amendment to limit the fiscal deficit, which was incorporated into the bill creating the Fund.

Sovereign Fund Approved in Panama

April 2012

The Fondo de Ahorro de Panamá (Panama Savings Fund) aims to be a mechanism for economic stabilization and savings for natural disasters or economic crises.

"The Cabinet has approved a bill proposing the creation of a sovereign fund called the ‘Fondo de Ahorro de Panamá ‘(FAP), which according to a statement from the presidency will have two parallel objectives: National savings for future generations and economic stabilization in case of predetermined situations such as natural disasters or economic crises," reported Capital.com.pa.

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