Friday, May 29, 2020

Treasury informs governors of 89.2 billion peso reduction in support

The Secretary of the Treasury, Arturo Herrera, informed the governors, through a videoconference, that liquidity is essential to face the health emergency and protect the local economy.

The Ministry of Finance and Public Credit (SHCP) held a virtual meeting on Thursday with the National Conference of Governors (Conago) in which it communicated to the state leaders that they will receive 89.2 billion fewer Participations than those approved in the Budget of Expenditures of the Federation (PEF) 2020. At the meeting, the Treasury offered an overview of the economy and presented high-impact projects with the federal entities that will help economic recovery, while the governors stated the need for additional resources to attend the coronavirus health emergency. “In videoconference with Arturo Herrera Gutiérrez, head of the Ministry of Finance, and with the state leaders, we were informed that there will be a significant cut of 89 thousand mp, where unfortunately our state will be affected,” he wrote in his account of Twitter the governor of Nayarit, Antonio Echevarría. Minutes later, Herrera wrote on the same social network that “they were informed that federal participations to states and municipalities, derived from the Fiscal Pact, are fully guaranteed. Liquidity is essential to face the health emergency, protect the local economy and maintain the #welfare of the population ”.

The Governor of Tlaxcala, Marco Mena, said in his Twitter account that “we raise the need for additional resources for the states, with the sole purpose of dedicating themselves to facing the COVID-19 pandemic.” Meanwhile, the governor of Tamaulipas, Francisco Cabeza de Vaca, maintained on the social network: “I celebrate the coincidences of the governors who are part of the @CONAGO_oficial, raised today in a videoconference to @ArturoHerrera_G, of @Hacienda_Mexico. We exposed the lack of extraordinary resources before COVID-19 and the effects of the suspension of energy projects ”. In the PEF, 951 thousand 454 million pesos were approved for Participations to states, however, in the document Pre-General Criteria for Economic Policy (April 1), 76 billion pesos were cut due to lower oil and tax revenues. That amount was further adjusted downward in the Quarterly Public Finance Report to the first quarter of 2020 (April 30). “Derived from the fall in revenues of the Federal Government, a decrease in the payment of participations to the states and municipalities of 89.2 billion pesos is expected,” the Treasury’s quarterly report reads. This amount is the one that was notified to the governors today.

The Treasury said in a statement that Secretary Herrera expressed his appreciation to the efforts of state governments for their prompt response to the health emergency and the implementation of plans for economic mitigation, economic reactivation and protection of jobs, as well as the various austerity and savings measures implemented by them. The official reiterated the importance of targeting spending to where it has the greatest impact in the next stage of reopening social activities and reviving the economy. An example of this, he added, are infrastructure projects due to their multiplying effect on the economy by generating jobs and developing supply chains; the above in a framework of collaboration and coordination between the different levels of government.

The Treasury assured that the participants in the virtual meeting expressed their consensus to continue working in a coordinated manner and to follow up on the economic reactivation measures according to the proposals made and the needs of each state.

Source: El Financiero

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