Government obtained the first approval from Congress to raise its debt ceiling

In the midst of a hot debate held this Tuesday – June 11 – the Third Committees of the Senate and Chamber jointly approved the bill presented by the Ministry of Finance to increase the Nation’s debt quota at US$17.6 billion to be able to better manage its financial obligations.

On the part of the National Government, the spokesperson for the defense and promotion of the initiative was in charge of the Minister of Finance Ricardo Bonilla, who explained that the requested guarantee is not to put the country further into debt, but that it will help to have a greater range of action in managing debts and in some cases being able to restructure debts.

Likewise, Bonilla González said that proof that things are being done well is the meeting that took place this weekend with the different ministries and entities of the Government, where the budget cut with which the It seeks to address the cash crisis facing the country.

In the Council of Ministers, Minhacienda asked portfolios to cut 5.6% of their budget

“It is a cut of $20 billion as a global item and all entities were given a deadline to submit their proposals and the details of where this cut goes, which corresponds to 5.6% of the operating and investment budget financed with national resources,” the official explained.

In this part, the Minhacienda made it clear that although operating expenses will be affected, there will be no changes in the General Participation System, nor in the Government’s payroll bases. As things stand, it is expected that the entire cutback plan for this year will be presented before the end of this week.

One of the points on which the Minister of Finance relied to justify the importance of the project that increases the debt quota is that, in his words, debt has been managed for some time, which undoubtedly It affects the Government’s ability to maneuver towards the future, a situation that they hope to correct.

“We are covering debt that comes from behind, between 2019 and 2020, the debt rose 11 points of GDP and that is what is being paid now and is what will continue to be paid in the coming years and that is why The debt limit is being expanded and we are additionally achieving compliance with the fiscal rule.

Labor reform: these are the first articles that were approved in Congress

The head of this portfolio recalled that Colombia must pay US$5,500 million in debt this year, US$8 billion in 2025 and US$7 billion in 2026; making it clear that these requirements exceed the current cash availability, which barely reaches US$2,000 million and justifies the need to expand the quota.

On the other hand, regarding how exactly the US$17,000 million that they are requesting as a quota application from Congress will be used, the Ministry of Finance explained that US$5,500 would be used in 2024, while in 2025 it would rise to US$8,800 million and in 2026, with a cut-off to August, the projection points to US$4,038 million.

Crisis at the National University: former rectors will not participate in the Superior Council

Although throughout the support of this project some congressmen were against the initiative, arguing that the entire Government’s request is a sign that it is not managing the State’s resources well.starting with the collection projections that Dian proposed at the time and were not met.

“There has to be a political person responsible for what we are experiencing in the country’s freezes and the only one who must answer for all this is the (former) Director of the Dian, Luis Carlos Reyes, because, if we see the country as a family “They promised her that they were going to take her on a trip, that they were going to change houses and live better and in the end they didn’t keep it and they rewarded this man with a ministry,” said representative Wadith Manzur.

Colombian economy, down: World Bank changes projections for the country’s GDP

On the other hand, congressmen such as Senator Karina Espinosa argued that “It is no secret to anyone that this increase in the quota is necessary because if not we have no way to finance the General Budget of the Nation and we would default on payments, which would be disastrous for Colombia’s image in the eyes of international banks.”

Senator Juan Pablo Gallo also joined the debate and said that we should wait a little longer to see if the endorsement is given or not, since “the big problem is the moment in which it is presented, is that we are going to approve this project without knowing the medium-term fiscal framework, without knowing what the deficit is going to be, we don’t know what the deficit is going to be, we don’t know.”

After the interventions and with several proposals for analysis in the second debate, which will be in joint plenary sessions of the Senate and Chamber, the debt quota project received the first endorsement in the Legislature and is getting ready for its second round, which must be completed before next June 20.