PANAMA · 2027 BUDGET
Key Facts
- —What is happening Panama’s Cabinet moved US$186.83 million between lines of the 2027 state budget on Tuesday, 20 October. The total stays at US$35.11 billion, and the revised bill returns to the Assembly’s Budget Commission.
- —Why it matters The budget sets how Panama spends and borrows in US dollars next year, including US$6.36 billion of new borrowing. It also counts on US$3.33 billion from the Panama Canal Authority.
- —The numbers The total is US$35,111.75 million, up 0.6% on 2026. Operating costs take US$22.55 billion, investment US$12.56 billion, and debt service US$5.50 billion, about 31% less than this year.
- —Who is who Finance Minister Felipe Chapman runs the budget for President José Raúl Mulino’s government. The Assembly’s Budget Commission, chaired by deputy Eduardo Vásquez, can still recommend changes.
- —What to watch The Assembly’s first debate on the revised bill, and whether the commission asks for more health money after the 9 October earthquake. The Cabinet says hospital repairs will use emergency channels instead.
- —Power Index Panama ranks 11th of 14 in The Rio Times Latin America Power Index, with 34.2 points (October 2026 edition).
- —What it means for you Holders of Panama’s dollar bonds see a government that says it meets its fiscal law and cuts debt payments. Shippers that use the canal fund part of the spending.
Panama kept its 2027 budget at US$35.1 billion but moved US$186.83 million between lines. The Assembly now takes up the revised bill.
The Panama 2027 budget stays at US$35,111.75 million after President Mulino’s Cabinet approved US$186.83 million in changes on Tuesday, 20 October. The money moves between lines, La Estrella de Panamá and Telemetro report.
Panama uses the US dollar, so its balboa figures need no conversion. The bill goes back to the National Assembly’s Budget Commission, and Panamá América reports a first debate on Monday, 26 October.
What the Cabinet Changed in the Budget
The Cabinet approved the changes to Bill 644, the 2027 General State Budget, after the Assembly’s Budget Commission recommended adjustments. The Ministry of Economy and Finance (MEF) made the technical review, and La Estrella says the fiscal responsibility law sets the limits.
Finance Minister Felipe Chapman said the budget does not grow and money was moved where it is most needed, La Prensa reports. The Presidency put the changes at US$186.83 million.
La Prensa says the National Assembly gets US$23 million more for operating costs and the University of Chiriquí (Unachi) US$10 million more. In total, 13 central government bodies and 17 decentralised bodies benefit.
The Ministry of Education loses US$15.4 million and the National Decentralisation Authority US$18.2 million, La Prensa’s reading of the resolution shows. It also lists a cut of US$416.6 million in debt service.
How the Budget Reached This Point
The Cabinet first approved the draft on Wednesday, 29 July, at US$35,111.75 million, up 0.6% on the 2026 budget, La Estrella wrote. That draft set a deficit target of 2.97% of GDP and assumed 4% growth in 2027.
Operating spending was US$22.55 billion, or 64.2% of the total, and investment US$12.56 billion, or 35.8%. La Prensa says operating costs fall 4.9% from 2026.
Debt service is US$5,496.1 million, of which US$3,062.5 million is interest, La Prensa reports. It calls that about 30.8% below the modified 2026 budget.
On Friday, 16 October the Budget Commission recommended US$199.131 million more, mostly for health, Panamá América reported. Part was meant for hospitals in the Azuero region damaged by the 9 October earthquake.
Where the Money Comes From
Current revenue is US$23,701.3 million, about 68% of the budget, La Prensa reports. Tax revenue is US$8,720 million, of which income tax is US$4,256 million and the sales tax (ITBMS) US$2,178 million.
Panama Canal Authority (ACP) transfers add US$3,327 million, and new borrowing US$6,355.3 million. The canal reports preliminary fiscal 2026 revenue of US$6.6 billion, Telemetro says, which shows why that transfer matters.
Hospital Repairs Go Through Emergency Channels
The Cabinet resolution says requests to repair damaged hospitals will use extraordinary mechanisms under Cabinet Resolution 80, La Estrella and Telemetro report. The Executive says this avoids paying twice from ordinary investment funds.
La Estrella and Telemetro link Resolution 80 to a national emergency over El Niño. The Azuero hospital damage came from the 9 October earthquake, so the exact legal route is unclear.
What Happens in the Assembly
Panamá América reports that Chapman presented the modified bill to the Budget Commission on Thursday, 22 October. Assembly president Shirley Castañedas convened commissioners for 9:00 a.m. on Monday, 26 October.
The first session starts with the allocations of state entities. The amount can still change before the full Assembly gives final approval.
What It Means for US Readers
Panama’s economy runs on the US dollar, so a budget that borrows US$6.36 billion matters to holders of its government bonds. The July draft set a deficit target of 2.97% of GDP, and the Cabinet says the revision meets the fiscal law.
The canal sends US$3.33 billion to the budget, so traffic from US shippers and importers feeds public spending. Travellers and expats in the earthquake zone will watch how fast hospital repairs are paid for.
Earlier reports cover the commission’s US$199 million request, the deficit cap after the quake and the canal’s US$6.6 billion revenue. The growth and deficit forecast, the Panama guide and the Panama news hub add context.
What Is Not Known
The Presidency gives US$186.83 million, while La Prensa says the resolution’s line items add up to US$450.8 million. The sources do not explain the gap.
La Estrella says the official text does not name which bodies lost money, so the cuts above rest on La Prensa alone. Only Panamá América reports the 22 October handover and the 26 October debate, and no date for the final vote is confirmed.
It is not known how much of the commission’s US$199 million request the Cabinet accepted. It is also not known how hospital repairs will be paid under the emergency route.
What Comes Next
Panamá América says the Budget Commission opens the first debate on Monday, 26 October, before the full Assembly votes. Lawmakers can still move money between lines.
The changes keep the total fixed, so they do not add spending or debt. They also do not settle how the earthquake repairs will be funded.
Frequently Asked Questions
How big is Panama’s 2027 budget?
The bill sets the 2027 General State Budget at US$35,111.75 million, up 0.6% on 2026. The Cabinet’s October changes did not alter that total.
What did the Cabinet change on 20 October?
It approved US$186.83 million in changes to Bill 644, moving money between lines. The Assembly gets US$23 million more and Unachi US$10 million more.
When does the Assembly debate the budget?
Panamá América reports a first debate in the Budget Commission on Monday, 26 October. The full Assembly votes afterwards, on a date not yet confirmed.
Does Panama need to convert its budget into dollars?
No, Panama uses the US dollar, so balboa and dollar figures are equal. The budget is already in US dollars.
Why does the budget matter to US investors?
Panama plans US$6.36 billion of new borrowing, and the July draft set a deficit target of 2.97% of GDP. Bond holders watch both numbers.
Sources: La Estrella de Panamá, 20 October; Telemetro, 21 October; La Prensa, 20 October; Panamá América, 22 October; Panamá América, 16 October; La Estrella, 29 July; La Prensa, 30 July; Telemetro, 21 October (canal revenue) (all accessed 23 October 2026).