{"id":16642,"date":"2026-09-12T11:40:00","date_gmt":"2026-09-12T16:40:00","guid":{"rendered":"https:\/\/expat-times.com\/panama\/?p=16642"},"modified":"2026-09-11T21:14:24","modified_gmt":"2026-09-12T02:14:24","slug":"panamanian-minister-chapman-affirms-strong-investor-confidence-to-defend-investment-grade-status","status":"publish","type":"post","link":"https:\/\/expat-times.com\/panama\/business-economy\/panamanian-minister-chapman-affirms-strong-investor-confidence-to-defend-investment-grade-status\/","title":{"rendered":"Panamanian Minister Chapman Affirms Strong Investor Confidence to Defend Investment Grade Status"},"content":{"rendered":"\n

Panama’s international borrowing costs have fallen sharply over the past year, a trend that Finance Minister Felipe Chapman<\/a> says proves investor confidence in the country’s fiscal direction and its ability to maintain Panama investment grade<\/strong> status. During an investor forum hosted by Latinex on Thursday, Chapman pushed back against lingering skepticism from Moody’s<\/a>, arguing that daily market signals speak louder than credit rating agency timelines.<\/p>\n\n\n\n

\"Moody's
Moody’s is a global rating agency that assesses credit risk for governments and corporations to help financial institutions evaluate securities. By Moody’s.<\/figcaption><\/figure>\n\n\n\n

Market Confidence Signals Strong Backing for Panama Investment Grade<\/h2>\n\n\n\n

Chapman told attendees that the country’s risk premium “began to fall rapidly because investors believe we do what we promise.” He explained that this credibility allowed the government to retire a significant amount of debt and restructure maturities and costs. The finance minister pointed to a concrete benchmark: Panama now finances itself at lower rates than several countries that hold the same credit rating, which he called “an enormous vote of confidence” and a responsibility the administration takes seriously.<\/p>\n\n\n\n

The minister acknowledged his admiration for the professionalism of credit rating agencies, but he refused to treat their assessments as the sole barometer of national economic health. “Every day, markets issue an opinion about the country’s risk and set a price that defines country risk,” Chapman said. For Panama, that daily verdict has been consistently favorable. Demand for Panamanian sovereign debt in international markets has been strong, while yields have compressed, a dynamic that reflects renewed faith in the government’s commitment to spending discipline.<\/p>\n\n\n\n

\"Javier
Javier Reusche is Moody’s Vice President of Investment and one of the most recognized voices in the sector. By Moody’s.<\/figcaption><\/figure>\n\n\n\n

Moody’s Outlook Remains Tied to 2026 Mine Decision<\/h2>\n\n\n\n

Despite the market’s enthusiasm, Moody’s Ratings has not yet lifted its negative outlook on Panama, which has been in place since 2024. Jaime Reusche, vice president of the rating agency, explained during the annual Moody’s meeting that the committee expected to resolve the Panama investment grade<\/strong> question by 2026. But a new complication emerged. The government’s decision to postpone a final ruling on a major mining operation until late 2026 could push that resolution further out, prolonging uncertainty.<\/p>\n\n\n\n

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“Is or isn’t Panama investment grade? That is the question we will continue to evaluate until the end of 2026, when the mine scenario becomes clear,” [Translated from Spanish]<\/p>\n<\/blockquote>\n\n\n\n

Reusche did acknowledge that the current administration has restored credibility through financing strategies and fiscal discipline, including deficit reduction and debt stabilization. Yet he insisted that protecting Panama investment grade<\/strong> over the long haul requires continuity beyond a single government period. The agency wants structural reforms that strengthen fiscal sustainability, specifically in education, public spending, and wage allocation within the state sector. Those reforms, Moody’s noted, have not yet materialized.<\/p>\n\n\n\n

\"copper
The government’s decision to postpone a final ruling on a major mining operation until late 2026 could push that resolution further out, prolonging uncertainty. by MiAmbiente PA<\/figcaption><\/figure>\n\n\n\n

Fiscal Discipline Strategy Drives Debt Market Success<\/h2>\n\n\n\n

Chapman described the administration’s economic approach as centered on fiscal order, expenditure discipline, and responsible debt management. The results, he said, are visible in reduced risk premiums and improved financing conditions. Panama’s local capital market has also grown deeper, with increased participation by foreign investors in Treasury bill auctions. That domestic deepening complements the country’s ability to tap international markets on favorable terms.<\/p>\n\n\n\n

The minister told the Latinex gathering that Panama’s economy is showing signs of sustained growth with contained inflation and what he described as unprecedented private sector job creation. He framed the government’s philosophy as a virtuous cycle: fiscal discipline generates trust, trust attracts investment, investment fuels growth, and growth translates into employment and well-being for the population. “We do not believe there is a contradiction between growth and fiscal order,” Chapman<\/a> said. “Quite the opposite.”<\/p>\n\n\n\n

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The government’s immediate priority with the National Assembly is the budget, and that reality pushes broader reform measures into the next legislative session, which begins in January 2027. Por Javier Alonso.<\/figcaption><\/figure>\n\n\n\n

Legislative Calendar Shapes Reform Timeline<\/h2>\n\n\n\n

Chapman called Moody’s analysis “very good” and agreed that the recommended fiscal reforms are pertinent. But, he was candid about the political calendar. The government’s immediate priority with the National Assembly is the budget, and that reality pushes broader reform measures into the next legislative session, which begins in January 2027.<\/p>\n\n\n\n

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“We are committed to moving forward with as many fiscal reforms as they recommend, but right now our priority with the Assembly is the budget. If we could present the reforms, we would like to do so, but it would already be in the next legislature starting in January 2027,” [Translated from Spanish]<\/p>\n<\/blockquote>\n\n\n\n

The timing creates a delicate alignment. Moody’s wants to see structural changes before making its final call on Panama investment grade<\/a><\/strong>, while the government argues that current fiscal performance already justifies that status. Investors appear to side with the administration for now, but the coming months will test whether political consensus can deliver reforms ahead of the rating agency’s own decision window. The mine ruling expected in late 2026 now looms as the pivotal event that could determine whether Moody’s removes the negative outlook or takes more drastic action.<\/p>\n\n\n\n

Ultimately, the standoff reflects a broader tension in sovereign credit analysis. Ratings agencies weigh institutional continuity and long-term structural change, while governments point to real-time market pricing and hard numbers. Panama has made its case with falling yields, successful debt placements, and a stable deficit trajectory. Whether Moody’s accepts that evidence as sufficient for upgrading the outlook will depend on what happens in the months leading up to that critical 2026 deadline.<\/p>\n\n\n\n