The State maintains outstanding payments to suppliers for around $ 190 million, corresponding to obligations of 2019, and $ 300 million of 2020.
60% of the value of payment to suppliers is concentrated in the defense, health and education sectors. In addition, 27% of these arrears occur with the public sector and the remaining with the private sector.
Fabián Carrillo, vice minister of Economy and Finance, explained that the Executive has two payment methods to meet the obligations it maintains with public and private institutions, including providers of entities that are part of the General State Budget (PGE).
The first consists of the payment and investment of the canceled resources. The provider receives the pending securities from the State and immediately invests them in securities: State bonds and / or Treasury Certificates (Cetes).
According to Carrillo, the money is transformed into an investment that could give a return and access to liquidity through the stock market.
With this modality, between November 2019 and June 2020, securities were placed for $ 532.5 million. 76 investors nationwide took advantage of this option, of which 92% is from the private sector. These include the Guayaquil Charity Board, Solca, decentralized autonomous governments, the Social Security Institute of the Armed Forces of Ecuador and the Social Security Institute of the National Police.
The second modality is that of payment. The provider receives State and / or Cetes bonds for the outstanding balances.
This modality will also be used for the payment of obligations of financial exercises of closed budgets, judicial sentences and finalized awards.
For the modality of dation in payment, an amount of $ 500 million has already been foreseen in bonds.
This mechanism may be used for a maximum amount equivalent to 3% of GDP, that is, approximately $ 3,000 million.
Public and private institutions, including providers, can voluntarily take advantage of one of these payment methods by sending a request to the Ministry of Economy and Finance . The process lasts a week (see infographic).
“The complex fiscal situation determines that we have accumulated some outstanding amounts with different beneficiaries of PGE resources,” Carrillo said. He added that the application of these mechanisms will allow the State to promptly resolve its obligations.
These securities are tradable on the stock market at any time for entities to obtain the resources. They can be acquired by public and private institutions, even used by banks for minimum liquidity reserves.
Titles can also be kept and interest charged. These have terms of 3, 5, 7 and up to 10 years. The interest rate payments are semi-annual and vary between 4.5% and 6.7%. (I)