PANAMA CITY, Panama – The National Assembly of Deputies has approved the 2026 General State Budget, a $34.9 billion fiscal plan that includes an $11.2 billion investment program. The legislative body passed Bill 293 in its third and final debate, marking a critical step in the nation’s fiscal planning.
The approved budget represents a significant increase of $4.18 billion compared to the modified 2025 budget. According to official statements, this increase is driven by unavoidable state obligations, including public debt payments, interest, and extraordinary contributions to the Social Security Fund (CSS). The final amount was modified after the Assembly’s Budget Committee issued recommendations on the allocations requested by various government entities.
Felipe Chapman, the Minister of Economy and Finance, stated that the budget’s approval resulted from a democratic process characterized by extensive debate and exchange of ideas between the Executive and Legislative branches.
“The debate has allowed us to adopt an effective tool to boost human development and the country’s economic growth,” explained Chapman [Translated from Spanish].
He also acknowledged the deputies’ efforts in conducting a high-level and constructive debate, demonstrating that despite differences, it was possible to find common ground for Panama’s well-being.
Budget Allocations Prioritize Key Sectors
The 2026 fiscal plan prioritizes critical sectors including health, education, and agriculture. This strategic allocation reflects the government’s focus on social development and economic fundamentals. The substantial investment program, valued at over $11 billion, is expected to fuel infrastructure and public works projects across the nation.
Following its approval in the third debate, the budget bill must now be sent to the Executive branch to be sanctioned and published in the Official Gazette, at which point it will attain legal force. This final step is considered a formality, as the bill has successfully navigated the primary legislative process.
The budget’s structure underscores the government’s commitment to managing its fiscal responsibilities while funding essential services. The significant allocations for debt service and social security contributions highlight the ongoing financial pressures facing the state, even as it seeks to invest in long-term growth.
Economic Context and Future Projections
The budget approval comes amid broader discussions about Panama’s economic trajectory. Analysts have pointed to several key factors influencing the country’s financial future. The nation’s economy has the potential for 6% annual growth, but achieving this requires addressing critical issues, according to economic assessments.
Ernesto Bazán, founder of the firm EB Ratings, recently highlighted the need for Panama to resolve the situation surrounding the Cobre Panamá mine, ensure its removal from discriminatory financial lists, and combat corruption to attract investment. The resolution of the mina cobre panam contingency is seen as particularly crucial by international investors.
Bazán noted that while opposition to the mining operation has decreased since the mine’s closure in November 2023, no societal consensus exists. He suggested that the issue should be submitted to a popular consultation, but also acknowledged that restarting operations could recover thousands of jobs and increase the Gross Domestic Product (GDP). The potential for international claims against the Panamanian state, valued at over $15 billion, adds further urgency to finding a resolution.
The newly approved 2026 budget represents the government’s primary tool for navigating these complex economic challenges. By prioritizing human development and economic growth, as Minister Chapman stated, the administration aims to stabilize public finances while laying the groundwork for future prosperity. The focus now shifts to the implementation of this substantial fiscal plan and its impact on the Panamanian economy in the coming year.