SPRINGFIELD (WWLP) – There’s trouble in paradise for Puerto Rico. The island missed a $422-million bond payment that was due to the U.S. Monday.
Financial adviser Mark Teed said this is their third default since 2015.
“The island cannot sustain the bonds that they have outstanding, they cannot pay the bonds back. The problem is, the spending is too high, and over time, they’ve continued to build up the debt, and now they’re having trouble even just paying the interest on the debt,” he said.
Puerto Rico’s governor said they couldn’t make the payment without sacrificing basic necessities. They failed to reach a settlement with U.S. negotiators, and Congress has been unable to pass a bill to restructure debt, or create a board to help manage it.
Leaders on Capitol Hill are debating the best way to help Puerto Rico out of their massive debt crisis, but in the meantime, thousands of Puerto Rican residents are fleeing the island and coming to the United States.
David Silva, the Executive Director of the Puerto Rican Cultural Center in Springfield, said they’ve been answering 10 to 15 calls a week from Puerto Ricans who’ve just relocated here.
“We haven’t seen numbers like this since the 1950s. All of them are looking for healthcare, housing, and employment opportunities,” he said.
Under U.S. law, Puerto Rico can’t access Chapter 9 Bankruptcy protection. Congress has talked about making changes so Puerto Rico can declare bankruptcy, but the bill has stalled in committee.
Silva said if it isn’t approved, a growing number of Puerto Rican residents will likely fleeing the island. “If the Chapter 9 doesn’t go through which is bankruptcy, for Puerto Rico, then I see the numbers increasing substantially more.”
