By legal mandate (Transitory articles of the Law of Banking Savings Protection [Spanish acronym LPAB]), IPAB assumed liabilities resulting from the rescue of bank savers and implemented a new program in relation to operations corresponding to the Capitalization and Portfolio Purchase Program (Spanish acronym PCCC).
Consequently, on December 31, 1999, IPAB reported the following liabilities, equivalent to 13.7% of Mexico’s GDP:
| IPAB'S Net Debt |
Dec-99 |
% |
| PCCC Reserves |
150,446 |
20.8% |
| Financial Strengthening Program |
369,411 |
51.1% |
| Banks in Liquidation |
164,138 |
22.7% |
| Other Liabilities |
7,961 |
1.1% |
| Debtor Support Program |
30,509 |
4.2% |
| Total Debt |
722,465 |
100% |
| Liquid Funds |
5,209 |
|
| Debtor Support Program |
30,509 |
|
| Net Debt |
686,747 |
|
Figures in Millions of Pesos.
As of December 2007, IPAB’s net debt amounted to 725.56 billion Pesos, 28.11% less in real terms than that reported in December 1999 and equivalent to 6.95% of the GDP:
| IPAB'S Net Debt |
Dec-07 |
% |
| Banks in Liquidation |
727 |
0.1% |
| Other Liabilities |
1,721 |
0.1% |
| Reserva para la Protección al Ahorro Bancario |
467 |
0.1% |
| Savings Protection Bonds |
694,203 |
92.2% |
| Contracted Loans |
53,151 |
7.1% |
| Debtor Support Program |
2,647 |
0.4% |
| Total Debt |
752,917 |
100% |
| Liquid Funds |
24,710 |
|
| Debtor Support Program |
2,647 |
|
| Net Debt |
725,560 |
|
Figures in Millions of Pesos
See information on IPAB’s financial position.
Liability Management Strategy
The liability management strategy adopted by IPAB has consisted of:
 |
Allocating sufficient fiscal resources to pay the real component of the financial cost of IPAB’s debt, thereby preventing growth in real terms, and |
|
Refinancing financial obligations that are not covered with IPAB’s own funds or fiscal transfers. |
BUDGET RESOURCES
Budget transfers are provided to IPAB under a specific heading in the Federal Budget of Expenditures. In its annual federal budget proposals, the Federal Executive has requested funds necessary to cover the projected real component of IPAB’s net debt (gross debt minus liquid funds and balance of Debtor Support Programs), considering IPAB’s expected revenues (asset recovery and bank fees). |
IPAB Net Debt/GDP
The strategy implemented by IPAB has as its objective to reduce its debt as a percentage of the GDP, and to reduce the financial cost of its liabilities.
1999 - 2007
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