What Happened
Panama’s Vice Minister of the Presidency, Virna Luque, defended the rise in the state payroll since President José Raúl Mulino took office, saying the increase is linked to the expansion of public services in education, health and security.
“Yes, there is an increase in the payroll, but that has a reason,” Luque said, arguing that new government programs and facilities require more staff. A presidential statement issued after the briefing described the increase in the public payroll as “slight.”
Education, Health and Security Drive Hiring
Luque said the Ministry of Education opened about seven new schools that need teachers, administrative workers and operational support. She also pointed to 1,500 new school cafeterias and 33 psychopedagogical teams, each made up of roughly four people.
In addition, she said 15 schools were expanded from pre-secondary to secondary level, creating new hiring needs for professors and administrators. “All of this requires personnel, and that is where the increase in the Meduca payroll is justified,” she said.
The same pattern, she added, applies to the Ministry of Health and the Social Security Fund, where new medical installations have been opened. She cited the hospitals in Bugaba, Río Hato and San Isidro, along with new Minsa-Capsi centers and primary care facilities.
On security, Luque said the graduation of between 1,500 and 1,600 new officers significantly increased the payroll of the Ministry of Public Security.
Other Institutions Also Added Staff
Luque said the rise in the Ministry of Government is tied to the transfer of Justice of the Peace personnel, who previously appeared on the Municipality of Panama’s payroll. She also said the Ministry of Culture incorporated dance teachers who had previously belonged to the Ministry of Education.
According to Luque, the growth in public employees between last year and this year is around 2.5%.
The Broader Fiscal Debate
The government’s defense comes as Panama continues to debate the size and cost of the state bureaucracy. Data from the Comptroller General show that since Mulino took office in July 2024, the number of public employees increased by 4,768.
At that time, the state had 258,859 public workers and a gross monthly payroll of $423.5 million. By March 2026, the figure rose to 263,627 employees, with monthly payroll spending reaching $451.7 million.
The long-term trend is even larger. In 2007, monthly spending on public salaries was $109.3 million, reflecting a cumulative increase of 313.2% over the past two decades.
Meduca remains the largest employer in the state, with 64,385 workers and a monthly payroll of $114 million. The Social Security Fund follows with 35,391 employees and $76.6 million in salaries, while the Ministry of Public Security has 34,369 workers and a payroll of $46.9 million. The Ministry of Health has 20,179 employees and monthly spending of $42.7 million.
The size of the state payroll has also drawn attention to institutions such as the National Assembly, which has 4,150 employees and a monthly payroll of $8.2 million.
Economy and Finance Minister Felipe Chapman has repeatedly warned that much of public spending is tied to special laws, automatic adjustments and salary commitments that make it difficult to reduce bureaucracy. Mulino himself has acknowledged that shrinking the public payroll is not something that can be done immediately.
“The payroll has its reasons for going up or down. I wish I could do it, but from one day to the next, it can’t be done,” the president said months ago.