GLOBAL ECONOMY

Puerto Rico governor not certain about $355M debt payment, but will try to pay bonuses

Puerto Rico Governor Alejandro Garcia Padilla.

Puerto Rico Governor Alejandro Garcia Padilla.  (2013 Getty Images)

Debt-burdened Puerto Rico is struggling to make a looming $355 million bond payment.

Gov. Alejandro Garcia Padilla said Monday he can't yet say for certain whether the Government Development Bank will make payments due Tuesday. He also said his administration is doing everything in its power to pay year-end bonuses to government workers — even when government coffers are empty.

“The law states I have until Dec. 20 and I have to do everything possible to collect that money," he told reporters, according to El Nuevo Dia

“The Christmas bonus is law. It is not a question of paying it or not paying,” he added. “It would be breaking the law if it’s not paid.”

As for the Development Bank for Puerto Rico's (GDB) debt, the governor said any development depends on what comes out of negotiations with island creditors.

“There is more than one alternative,” he added, according to El Nuevo Dia. “It is a rather complex banking issue and once the analysis are done, I must to decide what is best for Puerto Ricans.”

The GDB has been warning for weeks that it was in danger of running out of money by the end of the year. The government has been withholding payments to suppliers and tax rebates to preserve cash flow.

Failure to make the payment would be an ominous turn for the territory. The island has a shrinking economy and a total public debt of $72 billion that Garcia has previously described as unpayable without a restructuring.

Based on reporting the Associated Press.

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