Panama’s Ministry of Economy and Finance confirmed that earthquake reconstruction funding requests from public institutions have reached nearly $80 million, while actual disbursements remain below $20 million of the $100 million allocated for recovery efforts in the Azuero region.
Finance Minister Felipe Chapman made the announcement during the November 10 commemoration in Los Santos province, detailing how the government is distributing resources following the seismic event that damaged homes and infrastructure across the region.
Slow Disbursement Process Raises Concerns
Chapman said the full $100 million sits in the National Bank of Panama, with funds released only as institutions submit formal requirements. The Ministry of Housing and Territorial Development and the Ministry of Public Works account for the largest share of pending requests.
Health and Education ministries have also filed smaller funding appeals. The gap between the $20 million actually disbursed and the $80 million in accumulated requests underscores the administrative hurdles facing affected communities waiting for repairs and reconstruction.
The minister acknowledged the disbursement pace remains relatively low compared to identified needs but emphasized that requests now total close to $80 million. Local officials in Los Santos have pressed for faster housing assessments, with more than 1,500 residents affected in that district alone.
Dual Trust Structure for Donations
Chapman outlined a two-track system for receiving external support. One trust at the National Bank of Panama accepts contributions from foreign governments and multilateral organizations. A second trust at Caja de Ahorros channels private sector donations.
For the private sector mechanism, Chapman explained the state acts as a liaison, providing information about affected areas and existing needs while facilitating the flow of corporate contributions. This structure aims to coordinate aid without direct government management of private funds.
Budget Priorities and Employment Strategy for Reconstruction
Beyond reconstruction, Chapman addressed Panama’s broader economic outlook and the 2027 state budget discussions. He argued that job creation depends less on public spending than on establishing conditions that generate confidence and attract private investment.
He cited the pandemic period as evidence, when unemployment exceeded 18 percent despite elevated government expenditure. The strategy, he said, should focus on creating a favorable environment for business investment and new employment opportunities.
Chapman also highlighted what he called an unprecedented reduction in interest rates the government pays on its debt over the past two years, even as international market rates trended upward. These remarks come as authorities weigh recovery priorities for earthquake-affected provinces against fiscal constraints in the upcoming budget cycle.