98% of assets in the Trust Fund for Development (FDD), are held outside of Panama, giving low yields: 6.02% in 2010, and 4.19% in 2011.
An article in Martesfinanciero.com, reported that "The Ministry of Economy and Finance (MEF) is working on an amendment to the law governing the Trust Fund for Development (FFD), a financial instrument powered from its inception in 1995 with money generated by the sale of properties in the repossessed areas and privatization of public services initiated by former President Ernesto Perez Balladares. Faced with a turbulent international economic context, the MEF has decided to take action on the matter and start working on a project to reform the legislation (Law 20 of May 15, 1995). Changes being worked on by the authorities revolve around four main axes: Allow the fund to invest in joint ventures, develop infrastructure in the repossessed areas that have yet to be sold, invest in sectors considered strategic and modernize the policy for investment in financial instruments. "
The views on this draft reform of the financial industry are mixed, with some analysts expressing alarm and others optimism about its potential impact on the economy.
Source: martesfinanciero.com
More on this topic
September 2011
A fund will be created to use part of the proceeds collected after 2015 to address government debt
The Minister of Economy and Finance announced that the measure must be accompanied by a tight fiscal policy, in order to keep the balance of the debt under control.
Although the proposal is still in its initial phase of creation and analysis, it is expected that the fund could also reduce the debt / GDP ratio, as the implementation of the fund would go hand in hand with greater expenditure control measures.
February 2010
FFD sold a number of 2027 Panamanian Sovereign Bonds in $441.3 million; it had bought them for $362.9 million.
The transaction netted “Fondo Fiduciario para el Desarrollo” (FFD), a state entity, proceeds for $78.2 million, after legal costs.
FFD had $902.2 million in Panamanian sovereign debt (73% of its investment portfolio). The face value of the sold bonds was $351.6 million.
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