Recently, the rating agency Moody’s improved Veracruz’s credit profile, which went from “BBB” to “A-”, with a stable outlook. In this regard, El Economista interviewed José Luis Lima Franco, Secretary of Finance and Planning of Veracruz (SEFIPLAN), who explained part of the plan that allowed us to obtain this result, and what this improvement in credit rating represents for the people of Veracruz, among other things. topics.
“The truth is that this recognition is very satisfactory for this government, especially given the conditions that were received at the beginning of this administration, we practically brought very low qualifications,” said the secretary.
He added that from 2017 to date they have practically climbed nine positions, for which he considers that this is also “a recognition of the policies implemented by the governor of the State -Cuitláhuac García Jiménez- in terms of austerity, cost containment, responsibility financial”.
Among the elements that Moody’s took into account to improve Veracruz’s rating, the increase in the entity’s own revenues, the decrease in liabilities and the continuing purging of memorandum accounts stand out, in addition to the issue of positive operating balances.
“It is part of what has been done and (…) it is a recognition of the policies that have been implemented to improve the State’s finances.”
trust is key
The Secretary of Finance explained that the first problem faced by the current administration was debt, “all the liabilities that came there taking care of the balance”, among which the most important were bank debt and order accounts.
In this regard, part of the strategy consisted of providing confidence “to the people of Veracruz, to the banks, to the investors, that everything will be fulfilled.”
He recalled that, in the past, pensioners, contractors, suppliers, municipalities, and even the SAT and ISSSTE were not paid; Therefore, there is currently a commitment to regain trust by complying in a timely manner.
“The first thing that had to be done was to reduce expenses, lower current spending, eliminate luxuries (…) and at least meet what we brought from payroll, pensioners, teachers, police, and that was how We were just starting out,” he said.
Lima Franco explained that from then on a strong process of increasing own income began with greater collection efficiency, removing corruption issues and “making many changes.”
In coordination with the SAT, the tax credits began to be paid, “to date we have paid more than 12,000 million pesos of ISR, and the SAT at the outset discounted (approximately) more than 1,000 million pesos annually for those credits. and well, as of today, it is already less than 100 million”; municipalities have also been paid “close to 2,500 million pesos”, in addition to suppliers and contractors, as “part of the effort that has been made in the financial sector.”
Pandemic affected spending and income
In relation to how the pandemic affected Veracruz, José Luis mentioned that this situation affected them both in terms of expenses (by requiring greater hiring of doctors, nurses, acquisition of medical equipment, healing material, medicines and facilities), as in the part of income, due to a decrease in own income and in participations.
“What we had to do was adjust spending, eliminate many non-priority things and direct them towards the health issue,” “unlike other states, because the state (of Veracruz) did not ask for more debt,” and what was done was adjust spending, redirect the budget of some dependencies to health “and that is how we were somehow able to deal with the issue of health contingency (…) without damaging the state’s finances,” said the head of SEFIPLAN.
The medium and long-term outlook is positive
Regarding the medium and long-term perspective of the entity, José Luis Lima Franco considered that it is “very good”, since it is at a moment “very important and very good for the State”, by combining several elements such as trust in investments.
Such is the case of Costellation Brand -it will invest in a new brewery plant in the entity-, and even infrastructure issues such as the modernization and expansion of the port of Veracruz, “also the part of the Port of Tuxpan, with all the import of hydrocarbons ( …) the Transístmico port that also impacts the Coatzacoalcos area, as well as the increase in the production of ixachi in the Tierra Blanca area,” he said.
In addition to the highways that have been inaugurated as part of the new highway from Veracruz to Tuxpan, which helps make logistics easier and also practically connects the Port of Veracruz with the north of the country and with Mexico City.
“All these elements put us in an excellent position, so we believe that this will be reflected in the short and medium term and, in turn, will be reflected on the one hand in higher income, on the finance side. public. But also greater job creation and greater growth for the State”, he concluded.
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