Sovereign Fund Approved in Panama

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.

Wednesday, April 25, 2012

"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.

The initial capital will come from, according to the project, the absorption of the total assets of the Trust Fund for Development ($ 1.2 billion), which subsequently disappears. Later contributions will come from funds to be raised after the enlargement of the canal, starting from the year 2015.

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More on this topic

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.

The Lesson of Sovereign Funds

May 2012

Governments should act as good parents, thinking about the welfare of future generations, not just about the next election.

Governments should act as good parents, thinking about the welfare of future generations, not just about the next election.

In his article in Martes Financiero, Oscar Castaño Llorente discusses the rationale of the proposed creation of the Panama Savings Fund (FAP in Spanish), not only in its philosophical scope, but also from a practical point of view, present and future.

Panama's Sovereign Fund

February 2012

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

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.

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