Puerto Rico's governor says he plans to boost the U.S. territory's economy by overhauling the tax system and reducing government spending after two credit rating agencies slapped the island with downgrades last week.

Gov. Alejandro Garcia Padilla spoke Monday as Puerto Rico prepares to re-enter the bond market and seeks to reassure investors that it will not default on $70 million in public debt.

Garcia said he expects to reform the tax system within a year and evaluate whether a current 7 percent sales-and-use tax is effective. He also plans to reduce government spending by $800 million, crack down on tax evaders and reduce government agencies' budgets by 2 percent.

Economist Gustavo Velez praised the tax reform plan but said the government should take more aggressive steps to reduce spending.