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Two years after adopting some of the strictest COVID-19 measures of any U.S. jurisdiction, Puerto Rico is eliminating most of its restrictions amid falling infection rates and an aggressive vaccine campaign, Bloomberg News reported. Masks will no longer be required outdoors or indoors except in hospitals and at nursing homes, Governor Pedro Pierluisi said during a press conference Monday. In addition, all occupancy restrictions — including those on restaurants, bars and theaters — will be dropped. Events of 1,000 people or more, however, will still be required to follow special guidelines. Visitors from the U.S. mainland will no longer have to fill out a health declaration form upon arrival. The U.S. territory of 3.3 million took aggressive steps to stop the spread of COVID-19, imposing curfews, shuttering bars and restaurants, and adopting strict masking policies in March, 2020, before most U.S. states. Health Secretary Carlos Mellado said 83% of the population has been vaccinated, 53% has had a booster shot and that — between the vaccinated and those who have recovered from COVID-19 — a full 91% of the population has antibodies to the virus. Even so, Pierluisi warned that “the pandemic is not over” and that he would reimpose restrictions if officials detect a rise in cases.

Puerto Rico Governor Pedro Pierluisi said he’s in favor of renegotiating a 2019 deal that would pull the island’s public power company, Prepa, out of bankruptcy and repay billions to bondholders, Bloomberg News reported. During a meeting of the Financial Oversight and Management Board on Friday, Pierluisi said conditions in the U.S. territory of 3.3 million people had changed significantly since the restructuring support agreement, or RSA, was hammered out three years ago. In particular, the growth of electric vehicles and signs of economic recovery mean that some surcharges that the 2019 agreement contemplates might not be necessary, he said. “Nobody should tie themselves to the RSA,” Pierluisi told the board. “There are circumstances, it’s worth repeating, that require a renegotiation.”

Puerto Rico is poised to exit bankruptcy and begin paying bondholders again, a milestone that’s likely to boost not only the value of commonwealth debt but also other risky state and local securities, Bloomberg News reported. Puerto Rico stopped paying debt service in 2016 and then fell into the biggest bankruptcy ever in the $4 trillion municipal bond market the following year. Now Puerto Rico’s financial oversight board is set to execute a restructuring plan, approved by a court last month, that will slash $18.8 billion of commonwealth-guaranteed debt down to $7.4 billion. Prices on the newly restructured Puerto Rico securities are expected to increase following the debt exchange. That could help the high-yield municipal-bond market rebound from declining as yields have increased on anticipation that the Federal Reserve will raise interest rates. Below-investment-grade municipal securities and unrated state and local debt has dropped 3.5% this year and high-yield Puerto Rico debt has declined by 3.1%, according to Bloomberg Barclays Indexes.

Puerto Rico’s House of Representatives early Friday voted down an amendment to the current operating budget that would allocate billions of dollars to investors as part of the island’s debt-cutting plan, Bloomberg News reported. The legislation failed after midnight local time on Friday by 25 to 21, one vote short of passage. Still, the U.S. commonwealth’s debt restructuring can continue as the island’s financial-oversight board has the ability to allocate the necessary funds itself, Rafael ‘Tatito’ Hernandez, speaker of the House, said in a statement Friday. The chamber will take up the issue again on Tuesday, he said. Either the lawmakers or the oversight board must revise the current budget to incorporate debt-service payments and also allocate $10.8 billion in cash payments to bondholders, insurance companies and public workers. It’s part of Puerto Rico’s debt-restructuring plan, which will cut $18.8 billion of commonwealth-backed bonds down to $7.4 billion. Some lawmakers object to paying billions to investors at a time when teachers and other public workers are flooding the streets of San Juan to ask for higher wages. About 44% of island residents live in poverty.

Public school teachers in Puerto Rico called off a strike Thursday, after the government agreed to increase their base salary, make a new $1,000 a month raise permanent and engage in pension negotiations, Bloomberg News reported. “The commitment they made to us is that they will return to class and leave the streets,” Secretary of State Omar Marrero said after emerging from negotiations with teachers’ groups that have flooded Old San Juan for the last two days. Among the commitments, Governor Pedro Pierluisi agreed to boost teachers’ base salaries from $1,750 to $2,700 a month and build in wage hikes for those who get advanced degrees. On Monday, the government said it would use temporary federal funds to provide a $1,000 a month wage hike to all teachers starting in July. On Thursday, Marrero said that hike will also be made permanent. It’s unclear how the U.S. commonwealth — which is emerging from bankruptcy — will pay for the increases. When asked, Marrero said government payroll is a “top priority” in annual budget negotiations and therefore virtually guaranteed. In November, the federally-appointed board overseeing the island’s finances said the law that increases base salaries had merit but “proposes to spend money the Commonwealth does not have, without corresponding savings or new revenues.” Teachers, firefighters and other public-sector workers began taking to the streets last week demanding higher wages amid soaring consumer prices in the U.S. and the Caribbean island of 3.3 million people.

Puerto Rico is bracing for a second day of protests Thursday as public-sector workers said they will continue to fight for higher wages and more pension guarantees as the U.S. commonwealth struggles to balance the demands of a historic bankruptcy against growing discontent, Bloomberg News reported. On Wednesday, several thousand people — including teachers, firefighters and labor unions — marched to the governor’s mansion in the heart of the Old San Juan tourist district, waving signs and banging pots and pans in one of the largest displays of discontent in more than a year. The move comes amid soaring consumer prices, including a sharp spike in the cost of housing. A teachers’ strike last week led the government to tap federal funds to give them a temporary $1,000-a-month raise starting July 1. On Wednesday, Finance Secretary Francisco Pares Alicea suggested more wage hikes are in the works.

The executive director of Puerto Rico’s financial oversight board, Natalie Jaresko, is resigning from her position, having steered a historic debt restructuring that put the U.S. territory on firmer financial footing amid criticism from across the political spectrum, WSJ Pro Bankruptcy reported. Jaresko notified the oversight board she would resign effective April 1, five years after she was hired to carry out its mission of overhauling Puerto Rico’s finances and resolving the largest municipal-debt default in U.S. history. Her resignation comes after a federal judge approved a debt-adjustment plan last month that writes down $30.5 billion in public debts, honors the pensions promised to retirees and restricts elected officials from resuming some of the fiscal practices that drove Puerto Rico to bankruptcy. Jaresko, who served as Ukraine’s minister of finance before her hiring in Puerto Rico, was the public face of the seven-member board and took the job knowing she would be attacked for pushing painful cutbacks in the government’s financial commitments. Her successor will arrive with most of Puerto Rico’s prebankruptcy debt already restructured. The U.S. government has committed tens of billions of dollars in disaster aid, Medicaid funding, tax credits and other federal transfers to Puerto Rico in coming years, easing the debt deal and averting deficits until 2048, according to board projections. Yet there are persistent economic problems. Labor-force participation lags well behind U.S. states, and poverty is high. The population is expected to continue its long-term decline.

The Biden administration and Puerto Rico Governor Pedro Pierluisi reached a deal on Wednesday to revamp the U.S. territory’s outdated electric grid and move it towards renewable energy, securing over $12 billion in federal recovery funds, Reuters reported. Three federal agencies — the U.S. Department of Energy, Homeland Security and Housing and Urban Development — said they were prepared to distribute the federal recovery and grid modernization funds for Puerto Rico’s energy sector. The three federal agencies added they implemented a memorandum of understanding to align federal investments with local policies to start transition into clean energy, with the goal of achieving 100% renewable electricity by 2050. Puerto Rico filed for protection under a bankruptcy-like law, known as Title III, in May 2017. In January, the judge overseeing Puerto Rico’s nearly five-year-long debt restructuring process approved a debt adjustment plan that is intended to revitalize the commonwealth’s economy and reduce its $135 billion in liabilities. The debt adjustment plan is expected to go into effect by March 15. The oversight board will remain in place until Puerto Rico has had four consecutive years of balanced budgets.

Pay raises for teachers, firefighters, corrections officers and other employees were included in a revised fiscal plan approved Thursday that will serve as Puerto Rico’s economic blueprint criticized by some as the island emerges from bankruptcy, the Associated Press reported. A federal control board that oversees the U.S. territory’s finances noted that many government workers have not seen a pay raise since 2014, a year before Puerto Rico announced it was unable to pay its more than $70 billion public debt load accumulated over decades through mismanagement, corruption and excessive borrowing to balance budgets. The fiscal plan was approved a week after a federal judge signed another plan to slash the island’s debt after a nearly five-year bankruptcy battle, marking the largest debt restructuring in U.S. history. It goes into effect March 15. “This is a very important moment for (Puerto Rico),” the fiscal plan stated. “For the first time in years, it can manage its resources without the cloud of uncertainty of bankruptcy.” Teachers will see an average increase of 27% compared with what they earned in fiscal year 2019, firefighters 17% and correctional officers 15%. Even medical residents will see a 20% increase, their first since 2003.

Puerto Rico can avoid budget deficits for the next quarter century because federal funds will help boost economic growth on the island as it exits bankruptcy, the commonwealth’s congressionally appointed financial oversight board said, Bloomberg News reported. The board Thursday is set to approve a revised multi-year fiscal plan that incorporates federal funds Congress approved in the last year and a new pension reserve trust that will help ease stress on the island’s budget. Those changes mean the commonwealth won’t face potential budget deficits until fiscal 2048, according to Natalie Jaresko, the board’s executive director. Earlier estimates pegged deficits to begin in fiscal 2036. The updated fiscal plan follows U.S. District Court Judge Laura Taylor Swain’s approval on Jan. 18 of Puerto Rico’s debt restructuring plan. That decision allows the island to begin exiting its more than four-year bankruptcy process just as it’s set to receive more than $40 billion in federal funds in the coming years. The updated fiscal plan includes payments to bondholders starting in the current fiscal year. That’ll be a first for Puerto Rico since defaulting on its general obligation debt in 2016. It also incorporates Puerto Rico directing $10.3 billion during the next 10 years to a new pension reserve trust. That new fund will ease future commonwealth budgets as the island spends about $2.3 billion annually to cover benefits to public workers because the retirement fund is depleted.
https://www.bloomberg.com/news/articles/2022-01-27/puerto-rico-s-update…