The deputies of the Finance and Special Budget Commission issued three favorable opinions, one to provide funds to the Crecer Juntos Institute (ICJ) and to start its operation; the second, so that the Office of the Attorney General of the Republic (FGR) can have its own building; and the third deals with the management of liabilities by the Ministry of Finance (MH).
In the first place, the parliamentarians endorsed presenting to the Legislative Plenary a proposal to reform the Budget Law 2023 corresponding to the branch of Education, Science and Technology, after receiving the general director of the MH Budget, Carlos Salazar, who explained the purpose of this process: Incorporate $10,436,980, which will be allocated to the ICJ so that it can start its work.
If approved by the plenary, the Treasury may disburse the resources so that the ICJ provides specialized technical assistance services in the field of comprehensive care for Early Childhood, being a reference to said subject.
In addition, this fund will be used to support activities related to the articulation and provision of comprehensive care services for girls and boys in their early childhood, as well as the execution of family strengthening programs and the generation of strategic alliances that promote full development. .
“The main beneficiaries of the start-up of this institute will be the boys and girls from their gestation to the age of four”Salazar commented. “Through the execution of family strengthening programs and the generation of strategic alliances, they will help promote their integral development”he added.
According to the delegate, by granting the requested amount, tools would be provided to the institute of care and attention for children and this money would come from tax collection.
On June 22, 2022, the deputies approved the Grow Together Law for the Comprehensive Protection of Early Childhood, Childhood and Adolescence, which entered into force on January 1 of this year.
Article 175 of said regulations establishes the creation of the ICJ, with legal personality, its own patrimony, its own law and autonomy in the technical, financial and administrative matters regarding early childhood.
“By granting this money, the ICJ would be working from June to December of this year and would be attached to the Education branch”Salazar pointed out.
A building to centralize the FGR
The second opinion has to do with the need for the Prosecutor’s Office to have a building that concentrates all its units in the same sector. For this reason, the parliamentarians listened to the head of the Legal Department of the General Directorate of Internal Taxes of the MH, Gerardo Ramos Díaz, who argued the use that the Public Ministry would give to the funds.
Ramos Díaz requested the issuance of Special and Transitory Provisions of a tax nature for the project called “Construction, Equipment and Modernization of the Central Offices of the Attorney General of the Republic (FGR)”.
The purpose of this is to establish the special tax regulatory framework that allows managing the acquisition of goods and services for the realization of the aforementioned project, which would be around $70 million, which would be managed with the Central American Bank for Economic Integration (CABEI).
“The Prosecutor’s Office will enjoy an exemption in terms of VAT and Import Tariff Duties (DAI) for contractors, subcontractors, suppliers, consultants that are related to this building project, because it currently has divisions and in buildings in rent”said Ramos Diaz.
Regarding this project, the deputy president of the commission, Christian Guevara, pointed out that currently “There are many State resources that are spent on leases and it is better for an investment to remain in a building that will be part of the patrimony of the institution and of Salvadorans”.
In addition, the parliamentarian said that this building was announced since 2015, when the FMLN party governed, but “They let time go by and today they are going to come to criticize it if it is approved.”
“When the construction of said building is carried out, the State will have savings in the future and in the long term, the conditions will improve the work of the FGR. We hope that this building will be focused on serving the citizens”said the deputy Giovanny Zaldaña.
Liability management operations
The third approved opinion refers to the approval of the “Special Law that authorizes the carrying out of operations of liability management, by conversion of short-term debt, to medium and long-term debt”.
The general director of Investment and Public Credit, Marlon Herrera, commented that The conversion of medium or long-term debt requires the Ministry of Finance to manage the obtaining of resources up to the sum of $1,000 million, through the issuance of Credit Securities to be placed indistinctly in the national, regional or international market.
The request also includes the power to manage a bridge loan that serves as a tool to develop this operation, it will be fully paid when the issuance is completed.
For his part, Luis Sánchez Castro, Director of Economic and Fiscal Policy of the Ministry of Finance, said that by the end of 2022 the fiscal situation had improved considerably, with positive primary balances for the first time after the pandemic, around 2%, the fiscal deficit was reduced from -5.6% to -2.7% and the debt has decreased by around 60.8%
Both directors reached an agreement that the Government has made progress in its liability management strategy to continue improving the state of public finances and contribute to the country’s fiscal balance.
This expertise has had conclusive results, such as the early purchases of Eurobonds made in 2022, which generated savings of almost $300 million in amortizations and interest.
Therefore, following the development of this policy, the conversion of short-term debt to medium and long-term is proposed, this consists of taking a debt issued with an interval of a maximum year and then transferring it.
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