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Panama splits quake money into two trust funds

Panama's Economy and Finance Ministry (MEF) has set up two separate trust funds to pay for earthquake recovery, finance minister Felipe Chapman said on Tuesday 13 October, with coverage continuing into Wednesday. Public money and multilateral donations will sit in a trust at Banco Nacional de Panamá. Private company gifts of cash and building materials will go into a second trust at Caja de Ahorros under private-sector governance. Chapman stressed that the two pots will not be mixed. The design sits alongside MEF's earlier line that Panama will not ask the Assembly for a fiscal-rule waiver and will not tap the Fondo de Ahorro de Panamá for this emergency.

How the two trusts work

  • Public trust (Banco Nacional): already has Contraloría General refrendo and an open account. MEF is the settlor and assigns funds. First inflows are meant to be non-reimbursable donations from multilaterals (BID, CAF, BCIE, IMF, World Bank) plus payouts from the state's catastrophic insurance policies. Banco Nacional said the money would sit in immediate-liquidity deposits so it can move fast (La Prensa; Panamá América; Nexo).
  • Confirmed donation announcements so far total about $750,000 ($500,000 BID + $250,000 CAF). Contingent credit lines discussed as a backup if gifts fall short include roughly up to $300 million from BID and about $50 million from CAF (Nexo citing MEF briefing and prior bank announcements).
  • Who can draw from the public trust: MOP (roads and bridges), MIVIOT (housing), MEDUCA (schools), IMA (food logistics), and juntas comunales that file justified requests under Contraloría purchase rules (La Prensa; Panamá América).
  • Private trust (Caja de Ahorros): created because many firms offered cash, materials and labour. The government chose not to take those gifts into state accounts. Private governors will manage the fund for repair, rehabilitation and new homes for families who lost a house or cannot return to one. Donor names and amounts were not yet public at publication time (La Prensa; Chapman quotes).
  • Transparency: MEF said a public webpage would show each public disbursement in near real time, with Contraloría audit. A final report is due when the emergency ends (Panamá América; Nexo).
  • Fiscal frame: Cabinet authorised up to $100 million under the 10 October national emergency. Chapman said spending was still "very far" from that ceiling. Viceminister Fausto Fernández has put the early damage cost below 0.1% of GDP (about $90 million in Nexo's conversion). The Fondo de Ahorro de Panamá only opens if losses exceed about 0.5% of GDP (around $450–452 million under Law 38 of 2012). Chapman said this emergency is nowhere near that bar, so FAP stays closed and the 3.5% deficit target for 2026 stands (Panamá América; Bloomberg Línea; Nexo).

What it means for expats

  • This is the money-plumbing story behind reconstruction. It does not cut your income tax or ITBMS tomorrow, but it explains how Panama plans to rebuild roads, schools and homes without a fiscal-rule waiver.
  • If your home in the interior was damaged, help can arrive through MIVIOT / Sinaproc / junta channels fed by the public trust, or later through the private housing trust. Keep registering damage on MIVIOT and Panamá Conecta. Do not wait for a personal wire from either bank.
  • Businesses that want to donate cash or materials should watch for the Caja de Ahorros private-trust account details. Until that account is public, gifts are still being coordinated through government and industry channels, not through a published IBAN.
  • Readers watching Panama's credit story after Ecofin and MEF's no-waiver stance get a concrete mechanism: ring-fenced gifts first, contingent cheap credit only if needed, FAP and fiscal dispensa off the table for now.

Sources

  • La Prensa - Government announces second trust for private donations - 13 Oct 2026
  • Panamá América - MEF details the two trust structures for reconstruction - 13 Oct 2026
  • Nexo - Quake trusts at Banco Nacional and Caja de Ahorros - 13 Oct 2026
  • Bloomberg Línea - Panama launches two trusts for aid and reconstruction - 14 Oct 2026