In the midst of Puerto Rico debates about austerity and bond restructurings, the territory’s central government bank account balance rose to $3.6 billion in mid-November.
The $3.6 billion figure for the Treasury Singular Account, reported by the Puerto Rico Department of the Treasury for Nov. 16, is up from $2.65 billion on May 4. And that $2.65 billion figure was $211 million more than the government had anticipated in early July 2017, despite devastating hurricanes hitting in September 2017.
The $3.6 billion figure is equal to 41% of the $8.76 billion approved General Fund budget for the current fiscal year. The Treasury said that compared with the year-to-date in the prior fiscal year, General Fund revenues are ahead by $530 million.
This was primarily due to $186 million greater revenues from corporate income taxes, $171 million more in individual income taxes, and $100 million more in motor vehicle fees. The Treasury said these increases were due to the “impact of post-hurricane recovery efforts.”
“Having more cash than expected is better than the opposite, but month-to-month financial reports in 2018 are less important than questions about the commonwealth’s ability to minimize its economic contraction and restrain spending over the next 30 years,” said Municipal Market Analytics partner Matt Fabian.
Additionally, “Investors need to assume at least a half dozen or more major storms within the next 20 years," he said. "There are surely not going to be fewer.”
Puerto Rico's central government is accumulating cash now because it is not paying its general obligation and other central government paid debt, said Chapman Strategic Advisors Managing Director James Spiotto.
In a posting on Monday to the Electronic Municipal Marketplace Access website, the Puerto Rico Fiscal Agency and Financial Advisory Authority said that the central government and all of its public corporations had a total of $12.1 billion on hand as of Oct. 31, up from $11.6 billion on Sept. 28.
Included in the Oct. 31 figure are: $3.25 billion in restricted accounts generally subject to Title III bankruptcy proceedings, $1.69 billion in non-Treasury Singular Account central government holdings, $0.58 billion in pension related accounts, $2.85 billion in public corporation and legally separate entity accounts, and $3.78 billion in the Treasury Singular Account.
