Panamanian President José Raúl Mulino has categorically denied that the transfer of funds from the Ministry of Economy and Finance (MEF) to certain municipalities in the country is a form of 'parallel decentralization' as some political actors claim.
Mulino confirmed the transfers to local governments but clarified that the amounts are not comparable to the disbursements of the previous administration. 'Any practice that deviates from the law or confuses decentralization with political clientelism or that reminds us of the ill-fated 'parallel decentralization' of the past will be corrected,' he asserted.
He also announced that they will create, together with the Comptroller's Office, specific guidelines to strengthen the traceability and disclosure of budget allocations to local governments so that 'every balboa transferred contributes to local human development and not to practices that damage trust in institutions.'
The Minister of Economy and Finance, Felipe Chapman, explained that the public's questions have been taken with 'seriousness'; therefore, they will initiate the necessary investigations to remedy any fund allocation mechanism that can be misinterpreted or give rise to suspicions of a lack of transparency.
According to Chapman, only 18 of the country's 82 municipalities are financially self-sufficient; the rest (64) depend on the Central Government through the Real Estate Tax, the Public Works and Municipal Services Investment Program (PIOPS), direct contributions, among others, but the function of the entity he presides over is limited solely to the approval of the funds, not their oversight; this task corresponds to the Comptroller General of the Republic, who guarantees their proper use through prior and subsequent controls.
He reiterated that what happened 'is important because it has led to studying the issue and seeking a solution so that it is not repeated.' Data provided by the MEF show that between 2024 and the first half of 2025, disbursements to municipalities reflect a 95% reduction compared to previous years, where the figure reached approximately more than 143 million dollars.
