The public debt of Panama closed June 2026 with a balance of $61,526.8 million, representing a decline of $344.8 million, amounting to 0.6%, as against $61.871.6 million registered at the end of May, according to the monthly report published by the Ministry of Economy and Finance.
The document details that during June a disbursement of $180.5 million was recorded through Treasury Letters.
Nevertheless, this increase was offset by an exchange rate change of $294.3 million that reduced the balance as well as amortiations made during the month.
The latter includes $120.9 million in Treasury Letters, $98.8 million for multilateral agencies, $5.1 million for bilateral debt and $6.2 million for foreign commercial banking.
The Minister of Economy and Finance, Felipe Chapman, has stated several times that the government’s strategy is to reduce the rate of debt growth but admitted that it’s inevitable that it will continue to rise.
“Many say: ‘Well, Panamanian debt remains rising.’ Yes, it will continue to rise but every year less. Can we have stopped debt growth? Yeah. But stopping debt growth would have resulted in tens of thousands of public sector people being fired and cut subsidies, including those that go directly in money assistance to people, but also those of electricity, fuel, tanqueca of gas and, finally, all that about public transport,” said Chapman on 1 July as part of the opening of regular sessions of the National Assembly.
In a year, public debt increased by $5.229.2 million or 9.3% from $56.297.6 million in June 2025 to $61.526.8 million at the end of June 2026.
When comparing June 2024, as the balance was at $51,812 million, just as Nito Cortizo’s previous government closed and José Raúl Mulino’s first two-year increase began in July, an increase amounting to $9.714.8 million, or 18.75%.
Details of debt
The MEF’s debt report at the end of June indicates that Global bonds continue to represent Panama’s main source of public debt with a balance of $31,96.7 million, equivalent to about 50.5% of total debt.
Loan with multilateral agencies that have reached $9.825.1 million or about 16% and commercial banking with $9.692.4 million, representing about 15.8% of the total balance.
In the domestic market, the balance of Treasury bonds was found at $3,864.2 million while Treasury bills represented $2,683.2 million and the Treasury notes, other $2.628.7 million.
To these commitments are added $1.002.9 million with official banks, $732.7 million bilateral debt and $0.9 million private financing.
With respect to the servicing of foreign debt during June, payments to multilateral agencies amounted to $170.3 million while commitments to foreign commercial banks totaled $18.9 million and payments related to bilateral creditors were about $5.31 million.
On the domestic debt side, payments were made amounting to about $121 million in Treasury Letters, $20 million in Treasury Notes, $40.4 million in Treasury Bonuses and $9.2 million in official banks.
Economist Carlos Araúz warned that “the debt will continue to rise” and that under the current structure, its growth will be difficult to stop without a change of background.
He noted that the country needs a reconfiguration of liabilities and assets, as well as a profound and comprehensive fiscal and fiscal reform.
Although he recognized that debt was not growing at the same rate as in previous administration, he emphasized that the challenge remained to contain financial costs and to avoid interest payments from bringing public finances to an end.
Araúz argued that debt control necessarily goes through “austerity, expenditure monitoring and accountability”, with an increased performance of public investment.
He believes that Panama should maintain its focus on recovering the level of investment and improving the perception of risk ratings with the aim that the risk premium will continue to fall and the financial costs will not end up overwhelming the country.
He also stated that the 2027 budget should contain administrative expenditure while accelerating production investment and project implementation.
The MEF’s public debt report also indicates that during June prices of Panama’s most liquid international debt securities have been reduced while their yields have increased on average 5 basis points as against May.
The instruments put onto the local market followed a similar trend with a fall in prices and an average increase of 6 basic points in their yields.
At the end of June, the performance of Panamanian securities continued to be above the US Treasury bonds (UTS) as the best-risk reference.
The differential responds to an additional bonus required by investors to maintain Panamanian debt to US instruments.
Another indicator used to measure sovereign debt risk perception is EMBIG (Emerging Markets Bond Index Global).
That indicator measures the performance differential, expressed at core points, between a country’s public debt instruments and US reference points as risk free assets.
The lower the EMBIG, the lower the risk premium required by the market to invest in the country’s debt and a higher level means an increased perception of risk.
At the end of June, Panama’s EMBIG stood at 115 basis points under the average of Latin America with 268 points and the global indicator, at 217 basis points.
It was also found under Mexico with 202 points, Colombia with 190 points and Brazil with 177 points.
Within the countries listed in the comparison, only Peru with 109 points and Chile with 84 points have had a lower differential than Panama.
That puts Panama with the second lowest EMBIG among the six Latin American countries shown in the report, and indicates that, despite an increase in their bonus yields during June, the risk premium required by investors remains considerably lower than the regional average, and this puts them in a favourable position.
