Mexico has up to 18,000 million pesos (about 983 million dollars) to respond to natural disasters such as Cyclone Otis, which hit this Wednesday as a category 5 hurricane on the coast of Acapulco, in the southern state of Guerrero, one of the main tourist destinations in the country.
In an appearance before legislators of the Chamber of Senators of the Mexican Congress, the Undersecretary of Finance and Public Credit, Gabriel Yorio, assured that the Natural Disasters Fund (Fonden) currently has a budget line for 10,000 million pesos (546 million dollars).
He specified that this Fonden was not completely extinguished, but rather centralized in the Mexican Government the resources that were previously administered by the National Bank of Public Works and Services (Banobras) and the municipalities in the country.
“What was withdrawn from, especially from the Fonden administrator, which was Banobras, is the public financial management system; That is to say, it is no longer that it is Banobras and the municipalities who establish the invoice system,” Yorio clarified.
He said that, in these types of events, such as the impact of Hurricane Otis, The Mexican Government centralizes resources and defines recovery projectsand then transfer the resources to the executors to activate emergency and restoration plans.
He also pointed out that the reserves held for natural disasters were not touched even after the elimination of 109 trusts, including Fonden, in reforms approved by the Mexican Congress in December 2020.
Yorio also assured that there are 5,000 million pesos (273 million dollars) in catastrophic insurance that is contracted every year and added that they have 485 million dollars of the catastrophic bonus that Mexico has together with the Pacific Alliance, which is made up of Chile, Colombia and Peru.
“So the coverage of the cash reserve and parametric disaster insurance has remained intact and we have renewed it in each budget cycle,” he concluded.
This day, the Association of Banks of Mexico (ABM) reported in a press conference that, in the last 22 years, the cost of natural disasters reached 582,000 million pesos (31.8 million dollars), which is equivalent to 1.3 times the credit portfolio to micro, small and medium-sized businesses. The banking sector also began various actions to address the impacts of Cyclone Otissuch as the opening of accounts to receive donations, the transfer of basic supplies, the truce for debtors and the provision of cash and terminals so that those affected can have the money in their accounts.
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