BTN News: Colombia’s financial stability is hanging in the balance as the nation faces a high risk of defaulting on its international obligations. According to José Roberto Acosta, Director of Public Credit, the country’s ability to honor its commitments to international creditors is in jeopardy. A lack of action from the Commission of Public Credit, which plays a crucial role in approving foreign loans and debt issuance, is exacerbating the situation.
With the nation’s debt payments surging and crucial decisions left in limbo, the risk of default has become an urgent concern.
Colombia’s Default Risk Grows as Congressional Deadlock Continues
The Colombian government is now facing a critical juncture. As Acosta explains, “The country is at high risk of entering a default because it no longer has the capacity to keep honoring the credits it owes, particularly to multilateral banks.”
This financial crisis is rooted in the inability of the Interparliamentary Commission of Public Credit to meet quorum and approve the necessary measures. Six times the commission has failed to gather the required number of attendees, leaving key financial decisions in limbo. Without approval to issue foreign bonds and secure multilateral bank loans, the government is running out of time to maintain debt payments.
Inaction Threatens Colombia’s Ability to Pay $112 Billion in 2025 Debt
The Colombian National Treasury has been making payments on foreign loans using funds drawn from the General Budget, as established by current debt agreements. However, these funds are dwindling. Without new loans or bond issuance in foreign currency, the nation’s reserves will continue to decline.
This year alone, Colombia is responsible for servicing 94.5 trillion pesos in debt, with that figure rising to 112.6 trillion pesos in 2025. The looming shortfall in the Treasury has prompted urgent calls for action, but the ongoing political gridlock only worsens the situation. If the Commission doesn’t meet quorum, the country may soon find itself unable to fulfill its obligations, leading to a potential default on international loans.
$11.8 Billion in Foreign Credit Stalled as Congress Fails to Act
A crucial component of the financial plan involves obtaining $11.8 billion in new foreign credit—$5 billion from multilateral banks and $6.8 billion through sovereign bonds on the international market. However, these efforts remain paralyzed as the Commission of Public Credit has failed to give the necessary approvals.
Even though Congress approved the Ministry of Finance’s request to increase the country’s debt ceiling to $17.6 billion back in June, the Commission has not yet provided the non-binding but necessary green light for specific loans and bond issuances.
The situation is becoming dire. Acosta emphasized the urgency, stating that six times the government has presented the request to issue bonds and secure loans. Each time, the commission failed to act.
Who’s Responsible for the Delay? A Breakdown of the Commission’s Inaction
The Interparliamentary Commission of Public Credit is composed of seven members, although only six are currently active. On the day of the most recent meeting, only three members—Karen Manrique, Antonio ZabaraÃn, and Wadith Manzur—were present.
The absence of the other four members—Saray Robayo, Jhon Núñez, Ana Carolina Espitia, and Wilmer Castellanos—has consistently prevented the Commission from achieving quorum. Without their participation, the financial lifeline Colombia desperately needs remains out of reach.
What Happens Next? The Consequences of Continued Inaction
Colombia’s financial future hangs in the balance. If the Commission of Public Credit continues to delay, the country could face catastrophic consequences, including a default on its debt obligations to international creditors. The government has emphasized that securing these loans is critical for managing the country’s rising debt burden. Yet, with Congress unable to meet, the window for action is closing fast.
As Colombia’s economic outlook darkens, the government, international investors, and financial institutions are left to wait. Without immediate intervention, the country could see its credit rating plummet, causing long-term damage to the economy.
Conclusion: Will Colombia Act Before It’s Too Late?
The risk of a Colombian debt default is no longer a distant possibility. As José Roberto Acosta warned, the situation is critical, and without the necessary foreign credit, the government may soon find itself unable to fulfill its financial obligations. Time is running out, and the nation’s leaders must act swiftly to avoid a potential financial disaster.
