President Abelardo De La Espriella’s government will declare an economic and social emergency to accelerate aid to the victims and begin mobilizing the resources required for the reconstruction of the areas affected by the magnitude 7.4 earthquake that shook the country on Monday and impacted 593 municipalities. As of the close of this edition, the decree with the measure had not yet been issued.
The decision, confirmed yesterday by Miguel Gómez, Minister of Finance, will allow the Executive to issue decrees with the force of law and adopt extraordinary measures to face a tragedy whose true economic dimension is just beginning to be established. The Government anticipated, however, that it does not currently plan to create new taxes and will initially seek resources through loans, reallocations, and cuts within the 2026 Budget.
The first additional source of funding will be a contingent loan of up to 450 million dollars with the World Bank, which, according to Gómez, could be available before the end of the week once the economic emergency is declared.
These resources will be supplemented by the availability of the National Disaster Risk Management Fund budget and a reorientation of allocations from the General National Budget to channel money to the affected areas.
“We will prioritize budget allocations that allow us to channel these resources to disaster response,” said Gómez.
Although the declaration of economic emergency empowers the National Government to temporarily establish new taxes aimed at addressing the calamity, the Ministry of Finance initially ruled out resorting to this possibility.
“We are not going to raise taxes because we believe this budget, which is full of bureaucracy, allows for savings and cuts to address the emergency situation. We will first move by adjusting the Budget and not by asking Colombians to bear higher taxes,” assured Gómez.
The strategy involves a thorough review of public accounts just as the new government has asked Congress to return the Budget project presented by Gustavo Petro’s administration, considering it underfunded, with excessive operating expenses and leaving little room for investment.
Other measures
The emergency caused by the earthquake thus adds additional pressure on public finances that were already tight at the start of the new administration. Now the Government will have to find fiscal space not only to address the immediate phase of the tragedy but also to finance the subsequent reconstruction of homes, infrastructure, commercial establishments, and affected services.
Finance also announced that it will postpone the start of the income tax payment calendar for individuals in the territories affected by the earthquake for one month. “People dealing with a disaster are not in a state of mind to pay taxes. If it is necessary to go further, we will,” said the minister.
With nationwide economic decisions, President De La Espriella announced from Pereira two immediate measures for families affected in Risaralda. The first, a three-month relief on public service payments for the victims, for which a census will be conducted to identify the households that will receive this benefit.
The second measure aims to establish a rental subsidy program for those who lost their homes or cannot temporarily return to them. The same census, managed by the Ministry of Housing, will determine the extent of the damage and the families that require relocation while repairs or reconstruction of their homes begin.
Read more A doctor, an engineer, and 6 minors: these are some of the fatalities of the strong earthquake
