A group of legislators dropped attempts to amend the bill to exclude some bonds from the moratorium, saying time was running out to address the bank's situation
A man waves a national flag as others stand nearby during a protest in San Juan in this May 13, 2015 file photo. Puerto Rico on January 29, 2016 presented a plan to creditors that asks them to take a deep discount on their debt - an aggregate of around 45 percent, two sources familiar with the situation said, as the debt-ridden island tries to pull itself out of fiscal crisis. REUTERS/Alvin Baez/Files,
06 of April 2016 10:11:33
SAN JUAN, Puerto Rico — Puerto Rico's House of Representatives approved a bill early Wednesday that would allow the U.S. territory's governor to declare a fiscal emergency and implement a debt moratorium to prevent a shutdown of basic government services.Gov. Alejandro Garcia Padilla is expected to sign the bill soon, in part to help protect the island's Government Development Bank. That institution, which issues loans and oversees debt transactions, is running out of money and could face insolvency amid a decade-long economic crisis.A group of legislators dropped attempts to amend the bill to exclude some bonds from the moratorium, saying time was running out to address the bank's situation. They said they would file a separate bill later to deal with the exemption.The bill would allow the bank to enter into receivership if needed."If we didn't approve the bill today, the bank would be in danger," Representative Charlie Hernandez told reporters following criticism that the measure was hastily approved at a moment when bondholders had come to the island in effort to negotiate a restructuring deal.The bank has only $562 million in liquidity and faces a $400 million payment in May that the governor has warned will likely not be made. The bill would impose a moratorium until January 2017 and protects the government from being sued for defaulting on payments.