Puerto Rico Treasury Tender

The Secretary of the Department of the Treasury Francisco Pars Alicea reported that the net income of the General Fund for the first quarter of the fiscal year reached 2387.1 million about 354.3 million or 17.4 percent above the estimate. The Secretary emphasized that in the Fiscal Plan in force on April 23 2021 the Fiscal Oversight Board JSF projected for the Fiscal Year FY 2021-2022 revenues of 10207.8 million. The projection supposes a reduction of -3.7 percent with respect to the estimate revised in the Fiscal Plan of 10597.7 million. This figure for FY 2020-2021 of 10597.7 million is accrual since it is adjusted by 479 million of income received in fiscal 2021 for postponement measures related to the pandemic which corresponded to payments of the fiscal period 2019-2020. 93 percent or 448.2 million of the total income received in fiscal year 2021 correspond to postponement measures that were received during the period from July to September Table 2. This is relevant because for comparison purposes the revenues for fiscal year 2021 that total 11077 are not comparable with fiscal year 2022 without this adjustment being made see Table 3 that brings the base of fiscal 2021 to 10598 millions Pars Alicea explained. Collections at the close of FY 2021 Revenues at the end of last FY concluded with revenues amounting to 11188.8 million which far exceeded the estimate by 591.1 million or 5.6 percent accrual. This performance was driven by the flood of transfers which mainly stimulated consumption particularly tangible durable and nondurable goods but which slowed down service spending a sector affected by the confinement and other factors that resulted as a consequence of the crisis sanitary.This is corroborated when evaluating the performance of the sales reported in the monthly SUT forms. The proportion of tangible sales in FY 2020 experienced a reduction of 6.2 percentage points compared to FY 2021. It is also ratified when evaluating the component in collections from individuals of withholdings on services rendered explained the official. He added that the performance of income to the treasury related to the Income Contribution sectors associated with productivity during the 2021 fiscal period ended below that projected by the fiscal entity for FY 2021. This with the exception of the Contribution on Individual Income which exceeded the projection by 4.3 percent.September Rebound of the economy During the first quarter of FY 2022 Puerto Rico went through a period of recovery and economic rebound reflected in collections from the Treasury beginning in November 2020. This after 9 consecutive months of negative returns. The average monthly growth in collections for the first Quarter of Fiscal 2022 was 12 percent. This as shown in Chart 1 is a dramatic growth when compared to a monthly reduction of -23 percent averaged for fiscal 2021. It should be noted however that revenues for the first quarter have shown some deceleration.In September net income to the General Fund amounted to 910.9 million. This represented 24.9 million less than the income received in September of FY 2021. However if compared with the level of income received without the payments of FY 20 received in FY 21 Accrual the collections of September of this year they exceeded last years by 9 million. Once this accounting difference is recognized lets move on to evaluate performance for the first quarter of FY 2022.Accumulated Period from July to SeptemberThe level of collections for the first quarter of FY 2022 exceeded revenues for the fiscal year accrual by 226.0 million or 10.5 percent. On this occasion and unlike the closing of fiscal year 2021 the lines of Income Tax from Individuals 109.2 million Corporations 100.3 million and Withheld from non-residents 60.6 million reflected the greater dynamism. This by exceeding the amount collected in the quarter of last year by 270 million.IndividualsA growth of 30.1 percent for the first quarter of this FY in the collections of the Individual line contrasts with the annual fiscal estimate of 2.3 percent. Regarding this sector the Secretary indicated that for the first quarter the main line that experienced a recovery was services rendered. Revenues from withholding these services increased by 55.1 million or 80 percent. During the same period of FY 21 the benefits of the Pandemic Unemployment Assistance Program PUA which lasted until September 4 2021 and the restrictive confinement measures were factors that discouraged this already disrupted sector said the official.He explained that at this time the demand for services exceeds the available supply which results in an inflationary effect for services. The General Consumer Price Index reflects a growth rate of 2.9 3.3 and 3.5 percent for the months of July August and September respectively. Regarding the collection of withholding salaries he said that the average salaries reported in the Employers Payroll show a growth of 4.1 percent and the collections in this line increased by 10.4 percent. On the other hand the collections by Estimated during the quarter were higher by 33 million in relation to the same period in FY 2021.CorporationsA growth of 28.3 percent with respect to FY 21 similar to that of Individuals was observed in Corporations in this first quarter. Regarding the projection the amount collected exceeds the estimated 84.1 million or 23 percent. The annual growth projected by the fiscal entity for this line is 0.9 percent.