Despite falling liquidity, gov’t to pay Christmas bonus
The government will pay out $120 million in Christmas bonus checks through Tuesday.
With an estimated $700 million in the Government Development Bank’s coffers and a Treasury Department that reported $488.6 million in revenue collections in November, Gov. Alejandro García-Padilla announced Sunday public sector employees will receive their Christmas bonuses, as established by law.
The payment represents a disbursement of $120 million, and will be made within three days, through Tuesday. The compensation required by Law 34 of 1969, was due by Dec. 20 and the administration made the announcement a few hours before the deadline expired.
With this, the administration complies with its legal obligation to satisfy public-sector employees with the compensation earned as a result of having provided services to the government for at least six months — in the case of a regular employees — and 960 hours in the case of irregular employees, within a 12-month period.
That means that not all public employees qualify for the extra cash. However, those that do will receive $600.
The Christmas bonus payout had been on the line for weeks, as government officials warned there was no money available to cover the expense.
“The government has many commitments. These will be complicated weeks, with payroll for December coming up, which represents more than $200 million,” GDB President Melba Acosta said late last week.
Aside from its operational expenses, the government is also facing a $902.5 million debt service payment on Jan. 1, of which $331.6 million are in General Obligation bonds, which are protected by the island’s Constitution and must be honored.
To shore up liquidity, the administration has implemented a series of revenue-generating measures that include withholding payments to contractors and tax refunds to citizens, as well as effecting the “clawback” clause to redirect bond repayment sources to the central government’s coffers.
“We’re not paying contractor as we should, nor sending out refunds, but those aren’t permanent decisions, and you have to pay at some point because if you don’t you’re affecting the economy,” Acosta said.
“We knew December was going to be difficult and there’s still uncertainty about the payments coming up in January,” she added.
