El Niño: Government authorizes up to $80 million in special contracts during emergency

Panama’s government has authorized up to $80 million in special public contracts to respond to the effects of El Niño, allowing purchases through June 30, 2027. The measure declares a national emergency across the country and gives ministries and public entities access to a special procurement process established under the 2006 public contracting law.

The authorization came through Cabinet Resolution No. 80, dated Aug. 25, 2026, and published in the Official Gazette. Contracts must address specific situations caused by the climate conditions and must be justified at market prices. The Cabinet may increase or reduce the authorized amount and alter the period during which contracts can be made.

The Ministry of Economy and Finance will administer the money, approve budget allocations and authorize the transfers needed for the emergency. The funds will go into a trust managed by the National Bank of Panama, subject to the availability of funds in the 2026 and 2027 fiscal budgets. Payments will require approval from a high-level interagency commission and prior endorsement from the Comptroller General’s Office.

Every request and amount must receive the commission’s approval through a resolution. Before using the special procedure, institutions must check PanamaCompra’s virtual marketplace to determine whether the required goods or services are already available. They must also submit a report to the Cabinet naming the contractor, describing the expenditure and stating the amount. The report and the meeting minutes must then be published on PanamaCompra.

After the emergency ends, the contracting period concludes and all obligations are paid, any remaining money in the trust must return to the National Treasury. The resolution also allows the Finance Ministry, if necessary, to ask the National Assembly for a temporary waiver of fiscal limits set by the Social Fiscal Responsibility Law.