Mexican municipalities may contract debt to face pressure

The United Commissions for Planning and Public Expenditure and Public Finance of the Congress of the Mexico state approved that the 125 municipalities of the entity for the 2022 They can contract debt with state and federal resources, which is expected to face the financial pressures derived from the pandemic.

Derived from the analysis of the state Fiscal Package next year, local legislators approved the opinion of the Municipal Income Law.

Precisely, the city councils may contract debt either for refinancing or also for productive investments of up to 5,500 million pesos, during the fiscal years of 2022 and 2023, to be paid within a period of 15 years, granting as payment guarantee resources of the State Fund for Municipal Strengtheningl (FEFOM).

“These financings should be destined to the amortization of financings, the realization of infrastructure, financial sanitation, new works and to follow up on the fulfillment of contracting requirements in the best financial conditions and to monitor the fulfillment of the payment,” stated the legislators.

It was also approved that the 125 municipalities contract debt to finance works, productive investments and basic social actions, offering as a guarantee and source of payment the resources of the Municipal Social Infrastructure Contribution Fund (FAIS).

According to the opinion, the maximum amount that each municipality may contract will correspond to the estimate of the FAIS resources that they will receive in the 2022-2024 period.

Among the conditions for those who resort to these financing, it is worth mentioning that they must inform the local Legislature every three months on the contracting and evolution of the loans.

At the same time, each city council must submit individually to the local Legislature the corresponding request in terms of the Financial Discipline Law of the States and Municipalities.

The Mexican legislators agreed to create a Technical Committee made up of the Ministry of Finance, the Political Coordination Board of the Higher Inspection Body and the Tax Institute of the State of Mexico.


During the analysis of the Municipal Income Law, it was authorized that the municipalities can condone the payment for the rights of drinking water supply to vulnerable groups.

With the presence of almost all the banks, with the exception of the PAN, discounts of up to 38% were endorsed to pensioners, orphans under 18 years of age, with disabilities, widows or widowers without fixed income, released by the Amnesty Law, among other


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