The public sector in Costa Rica plans to spend $112 million on advertising and propaganda during the 2013, which is a drop of 12% compared to the previous year's budget.
A report by the Comptroller General of the Republic, has revealed that other items such as foreign travel or entertainment expenses will also be cut in 2013.
Among the largest advertisers in the public sector for 2013 are Banco Nacional, the Costa Rican Tourism Institute, Banco Popular, Banco de Costa Rica (BCR) and the Social Protection Board.
In Costa Rica an arbitration court has ruled that it is abusive to have no maximum interest rates while having fixed lower rates in a loan agreement.
A ruling by the Conciliation and Arbitration Center of the Chamber of Commerce of Costa Rica, has ordered the Banco Nacional to return $288,000 to a client, because it set a minimum interest rate for a loan.
From October last year to date, public banks in Costa Rica cut their average rate by almost 4.5%.
"In the last four months state banks made a sharp rate cut to place them below the average of other intermediaries and brush with near-zero real returns", reported Nacion.com.
"The banks reduced their rates so that they are now the lowest among the sector and real returns are close to zero.
Data for January 2013 shows that the arrears in loans in the three state banks in Costa Rica are close to the maximum allowable limit.
For the Banco de Costa Rica, the arrears indicator has reached 3.14%, exceeding the ceiling imposed by the Superintendent of Financial Institutions (Sugef), of 3%.
Nacion.com reports that "The delinquency indicator of the three state banks, together, came to 3.02% last month, up from the 3% allowed by Sugef.
Costa Rican Commercial banks closed 2012 with net income of $360 million, which is a 30% increase in nominal terms compared to 2011.
Those who reported the highest earnings were public banks, meanwhile private banks reported the highest growth last year in 2012, closing with $111 million, 32% higher than 2011. (This amount does not including the banks results from the banks Citibank, General, Bansol and Improsa).
Total P.E.T. Packaging has obtained a loan for $8.5 million from Banco Nacional for the New World Recycle company, which will build a PET recycling plant in the province of Cartago.
A statement from Total P.E.T. packaging reads:
Banco Nacional and New World Recycle sign loan agreement to build a PET bottle to bottle recycling plant
- Between 750,000 and 1 million plastic bottles per day will be recycled instead of polluting the environment.
- The new RPET resin can be used up to 100% in new containers.
The presidents of Costa Rican state banks said they "do not know why they are paying higher fees" than those paid by private banks.
EDITORIAL
The phenomenon of the nerve with which too many Latin American officials are flaunting their irresponsibility is increasing.
Television pictures showed a formal meeting chaired by the Chief Executive of Costa Rica, President Chinchilla, accompanied by her Vice-Minister of Finance, Central Bank President and other members of the economic team, and presidents and directors of the three main public banks in the country, the Banco Nacional, Banco de Costa Rica and Banco Popular.
The National Institute of Housing and Urban Development has announced the creation of a trust to finance housing for middle-income families.
According to an article in Nacion.com, the new CEO of the National Institute of Housing and Urban Development (INVU in Spanish), Alvaro Gonzalez, said three lots are available in the province of San José, where the plan is to build high rise condominiums, and another in the province of Guanacaste where blocks of houses will be built.
For the volume of assets and loan portfolios they manage, cooperatives together make up the fourth largest financial operator ivn the country.
In Costa Rica, the 30 cooperatives under the supervision of the Superintendent of Financial Institutions (Sugef) exceed in value the assets and loan portfolio of the "private bank BAC San José and are below the banks, Banco Nacional, Banco de Costa Rica and Banco Popular which are funded by public capital. "
The President of Costa Rica Laura Chinchilla criticized state-owned commercial banks for being directly responsible for the high interest rates plaguing the economy.
Nacion.com reports that "President Laura Chinchilla said yesterday that Costa Rican public banks "are over stepping their hand" with interest rates in colones which are hitting Costa Rican’s wallets."
An announcement has been made in Costa Rica for a tender for a project to give rural communities mobile and fixed telephone coverage, with funding from the National Telecommunications Fund.
The National Telecommunications Fund (Fonatel) is endowed with payments for operating licenses awarded to telecom operators such as Claro and Movistar, and currently has $190 million to be used to promote access to quality, timely, efficient, affordable and competitive telecommunications services, for the inhabitants of areas of the country where the cost of investment for the installation and maintenance of infrastructure for the provision of these services is not financially profitable.
The National Bank has $14 million from the System for Development Banking for small industrialists who have a capacity to pay, good credit and a clear plan of investment.
A statement from the Chamber of Industries of Costa Rica (ICRC) reads:
- Small Industries will have 7 billion colones for funding to improve productivity
- System for Development Banking will provide financial resources for the program.
State banks are leading this growth, although private banks still retain 61% of the total loan portfolio in the U.S. currency.
An article in Nacion.com reports that "The growth in dollar loans from public banks is striking because it is a market that traditionally is dominated more by private financial institutions."
As an explanation for the growth in dollar loans, one point mentioned is the lack of perception exchange risk due to the behavior of the exchange rate, which for a long time has been very close to the lower limit of the exchange rate band set by the Central Bank, this coupled with the relatively low interest rates for loans in foreign currency.
The company Beneficiadora de Occidente, dedicated to the production of coffee, has introduced a prepaid card to pay its coffee pickers.
The company, through an agreement signed with Banco Nacional de Costa Rica, is the first to incorporate this method of payment, which may be extended to other agricultural activities (pineapple and banana plantations).