Cifarma supports debt cession, as 'something is better than nothing'

The Paraguayan Chamber of the Pharmaceutical Industry (Cifarma) has announced its support for the government's debt cession regulation, viewing it as a necessary step toward resolving the substantial debt owed to the sector. Luis Ávila, executive director of Cifarma, stated that the industry group agrees with Resolution No. 296 from the Ministry of Economy and Finance (MEF).

During a recent meeting with authorities, three key points were agreed upon: simplifying payment terms, negotiating interest rates with banks by the MEF, and increasing the flexibility of debt cession. However, Ávila noted that a crucial aspect not included in the resolution requires further discussion and analysis with the government.

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If we take the stance that we disagree with assuming interest but lack a legal instrument for the State to do so, we will only hinder progress. We need to be paid now.

Ávila explained that the MEF negotiated with banks, asserting the debt is sovereign with zero risk and a rating of 2, indicating that assuming the debt would not impact banks' credit lines. He reaffirmed Cifarma's agreement with the current steps but stressed the need for a legal instrument that would allow the MEF to assume part of the interest costs.

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We would prefer not to pay interest, but that is not possible today as we lack a legal instrument. So, faced with having nothing and taking a stance of disagreement and rejection, we prefer to keep working and seeking more alternatives to settle the debt.

"If we take the stance that we disagree with assuming interest but lack a legal instrument for the State to do so, we will only hinder progress. We need to be paid now," Ávila emphasized. He added that while a new law would take time, the pharmaceutical sector cannot wait any longer. Therefore, accepting the MEF's proposal, while continuing to seek corrections for better future outcomes, is the preferred path.

Cifarma acknowledges that the current regulation offers an interest rate lower than what suppliers are paying to private banks. "We would prefer not to pay interest, but that is not possible today as we lack a legal instrument. So, faced with having nothing and taking a stance of disagreement and rejection, we prefer to keep working and seeking more alternatives to settle the debt," Ávila concluded, echoing the sentiment that "something is better than nothing."

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Something is better than nothing.