President José Raúl Mulino’s government has approved five emergency declarations since taking office in July 2024, authorizing up to $360 million in public contracts awarded through exceptional procedures that bypass standard competitive bidding — with $180 million still available under two active national emergencies following the magnitude 7.5 earthquake that struck Tonosí on October 9.
What Happened
Cabinet Resolution 108, published Saturday in Official Gazette 30631, was issued one day after the powerful earthquake with its epicenter in Tonosí, Los Santos province. The resolution declares a nationwide state of emergency and authorizes up to $100 million for ministries and government entities to contract works, goods and services without public tender. Institutions have until December 31 to commit those funds.
The earthquake declaration is the second active national emergency. Resolution 80, in force since August 25, declared a national emergency over the effects of the El Niño phenomenon and enabled another $80 million in special procurements, valid until June 30, 2027. Together, the two resolutions give the Executive $180 million to award through exceptional channels, outside the timelines and competition required by Panama’s public procurement law.
The earthquake resolution introduces two new safeguards. Funds will be administered through a trust at Banco Nacional de Panamá under the control of the Ministry of Economy and Finance (MEF), and each payment will require prior approval from the Comptroller General’s Office. Any unused balance must return to the National Treasury at the close of the period. The El Niño resolution instead requires that an interinstitutional high-level commission, created in May, approve each request and set contract amounts.
Background
Mulino took office on July 1, 2024. On November 14, 2024, his Cabinet approved Resolution 107 after heavy rains in Chiriquí, Bocas del Toro and the Ngäbe Buglé comarca delivered double the usual monthly rainfall, killing 11 people and affecting more than a thousand families. That resolution set a $100 million cap with a January 15, 2025 deadline, which the Cabinet later raised to $160 million and extended to February 15. At least $120 million went to the Ministry of Public Works for road repairs, while Idaan received $23.7 million, the Ministry of Government $3.6 million and the Ministry of Housing $2.5 million.
Two provincial declarations followed in 2025. Resolution 48 of May 27 covered Bocas del Toro during the Sitraibana banana union strike against Law 462, which reformed the Social Security Fund’s pension law. The conflict led Chiquita Panamá to dismiss more than 5,000 workers and suspend operations, prompting up to $10 million in direct purchases. Resolution 69-25 of June 11 responded to the water crisis in Herrera and Los Santos, when contamination of the La Villa River forced drinking water plants to shut down, also with a $10 million cap.
Emergency procurement exists so the state can respond quickly to disasters without waiting months for tenders, bid documents, complaints and challenges. All five resolutions repeat nearly identical language, requiring purchases at “duly justified market prices.”
What This Means for Panama
The scale of exceptional contracting — $360 million across five declarations in just over two years — highlights how heavily the Mulino administration relies on emergency mechanisms to move public spending. Transparency is a key concern: while each entity must deliver a written report to Cabinet at the end of each emergency, listing contractor names, spending purposes and amounts, and publish it on PanamáCompra, that accountability comes only after the fact. While an emergency is open, the public knows how much was authorized, but not how much has been spent or who received the contracts.
Economy Minister Felipe Chapman said Saturday that “the Panamanian economy is not going to stop” and that the country has resources to address the most urgent earthquake damage. If additional financing is needed, he said, it would come through soft loans with low rates, long terms and grace periods. Chapman also thanked the Inter-American Development Bank, the Development Bank of Latin America and the Caribbean, the International Monetary Fund, the Central American Bank for Economic Integration and the U.S. government for non-reimbursable funds offered. President Mulino has toured affected areas and ruled out any paralysis of the country.
With $180 million in active emergency funds and a December 31 deadline for earthquake-related commitments, watch for how quickly institutions allocate resources, what oversight the comptroller exercises over the Banco Nacional trust, and whether post-emergency reports on PanamáCompra provide the promised accounting.
This story was originally reported by La Prensa.