Puerto Rico Gov. Alejandro García Padilla said he was opposed to amending the Puerto Rico constitution to allow restructuring of its debt.
García Padilla's statement was relayed in a release from the Government Development Bank for Puerto Rico Friday afternoon.
Early this week three legislators in his party introduced measures in the Puerto Rico House of Representatives that would, among other things, amend the Puerto Rico constitution to allow the restructuring of its debt.
Article VI, section 8 of the constitution reads, "In case the available revenues including surplus for any fiscal year are insufficient to meet the appropriations made for that year, interest on the public debt and amortization thereof shall first be paid, and other disbursements shall thereafter be made in accordance with the order of priorities established by law."
GDB president Melba Acosta Febo said, "GDB strongly opposes any constitutional amendment to undermine long-standing constitutional protections provided to holders of the Commonwealth of Puerto Rico's debt. GDB's near-term priorities are to strengthen central government finances and GDB's liquidity."
As an example, Acosta Febo pointed to the planned sale of a bond from the Puerto Rico Infrastructure Finance Authority to repay loans from the Puerto Rico Highway and Transportation Authority to the GDB.
On Wednesday and Thursday, Puerto Rico Senate President Eduardo Bhatia Gautier called for the restructuring of the commonwealth's debt. His office didn't respond to requests for details.
On Friday the El Vocero news site quoted Puerto Rico Senator Ram-n Luis Nieves as saying during the current discussion of reforming the commonwealth's tax system, the restructuring of the debt is "the big white elephant" in the room. "This is an opportunity for us to understand that the Puerto Rico we believe that we live in no longer exists because we live in a country that ceased to exist and it is about time we had some new priorities. We will have the strategic privatization of agencies and corporations because we cannot pay their expenses. The ideological ties must yield to the pragmatism of the crisis."
Luis Nieves is a member of the Popular Democratic Party with Bhatia Gautier and García Padilla.
