Executive Enacts Public Financing Law
31 julio 2020

On July 24, the Executive Branch enacted the Organic .Law on the Regulation of Public Finances, empowering the Ministry of Economy to limit public sector spending, and proposing an insurance policy to cover oil price volatility and a savings fund to deal with eventual emergencies. The measure is already in force.

These new regulations allow the State to create a savings fund to mitigate the negative impact of fiscal risks on public finances. This document will be attached to the Budget Proforma. In turn, each year the Ministry of Finance must prepare and issue a “policy to prevent, mitigate and manage fiscal risks” covering the Non-Financial Public Sector and Social Security. 

The Ministry of Finance will be in charge of issuing the guidelines on global, institutional and spending budgetary limits, taking into account institutional priorities, their alignment with the objectives enshrined in the National Development Plan, and the progressivity and guarantee of constitutional rights.

It is worth mentioning that July 15 was the deadline for the National Assembly to respond to the partial objection presented by the Executive, meaning that the Law was enacted using the wording proposed by the Executive.