WILLEMSTAD - The Financial Supervision Board (Cft) has raised concerns over the Pisas cabinet's draft budget for 2025, calling the government's financial outlook overly optimistic. The government forecasts a surplus of 81 million guilders, but the Cft finds this projection unrealistic.
One of the key issues highlighted by the Cft is the failure to account for the financial risks posed by the struggling Curaçao Medical Center (CMC). While the cabinet has set aside 10 million guilders annually, the Cft estimates that an additional 25 to 35 million guilders per year will be needed to keep the hospital financially stable until 2028. The Cft also warns that writing off the government’s claim against the CMC in exchange for the hospital's buildings is insufficient, as the claim surpasses the value of the property, leaving a gap in public finances.
In addition to concerns about the CMC, the Cft believes the government's income tax revenue projections are overly positive. Delays in implementing gambling legislation, which was expected to generate 40 million guilders in 2025, mean these funds are unlikely to materialize. Furthermore, the government has failed to properly index expenses for goods and services, which may lead to increased financial strain.
The Cft concluded that while a surplus is possible, it will be significantly lower than the projected 81 million guilders. The board has also urged the government to expedite long-overdue healthcare and social security reforms, which are essential for financial sustainability. Without reforms, deficits are expected to grow from 8 million in 2025 to 116 million by 2028.
The government also faces a 30-year, 30-million annual contribution to rescue the ENNIA pension fund. Significant efforts will be needed to avoid Curaçao slipping into the red by 2028, with Finance Minister Javier Silvania’s optimistic forecast showing only a modest surplus of 2 million guilders.
While the financial report for the second quarter indicates a surplus of 106 million guilders, this is largely due to higher-than-expected tax revenues and the omission of a reserve for CMC losses. The Cft noted that it cannot fully assess the financial situation as the accompanying explanations have been inadequate.