WILLEMSTAD – The Board of Financial Supervision (Cft) is still unable to determine whether the new loans Curaçao plans to take out in the coming years comply with the legally established interest burden standard. The situation is notable because the financial supervisor had already urged the government earlier this year to provide the missing financial information before submitting the draft 2027 budget.
According to the draft budget, Curaçao intends to borrow XCG 190 million in 2027 to finance investments. Additional borrowing is also planned for the years 2028 through 2030.
However, the Kingdom Act on Financial Supervision (Rft) limits the amount of debt Curaçao can take on through the so-called interest burden standard. Under this rule, the annual interest expenses of the entire collective sector may not exceed five percent of the average revenues of that sector during the previous three years.
At present, the Cft cannot formally carry out that assessment because the Curaçao government has not yet provided all the necessary information on the collective sector. The missing information includes figures on revenues, expenditures, deficits and debts of government entities and other organizations that are considered part of the collective sector.
The issue is not new. In March, the Cft warned the government that the missing information needed to be made available as soon as possible. At the time, the financial supervisor explicitly asked Curaçao to formally establish the composition of the collective sector for 2025 and 2026 and to submit outstanding reports covering 2023, 2024 and 2025.
The Cft wanted that information before the draft 2027 budget was submitted, precisely because compliance with the interest burden standard is an important part of assessing new borrowing requests.
That information apparently remains incomplete.
In its advice on Curaçao’s draft 2027 budget, the Cft again concludes that it cannot determine whether the planned loans remain within the statutory limit.
The absence of a formal assessment is particularly relevant given Curaçao's plans to borrow XCG 190 million next year and continue borrowing in subsequent years. Without complete information on the collective sector, the financial supervisor cannot establish the full debt and interest burden that must be taken into account under the Kingdom Act.
The issue means that an important question surrounding Curaçao's investment plans remains unanswered: whether the government has sufficient legal borrowing capacity to proceed with all of the loans currently included in its multi-year budget.