June 4, 2013
Unlike in the U.S., where student loans are run of the mill, few Mexicans have access to the financing that could help them pay for a college education. Mexicans aspiring to middle-class status increasingly see university education as a must. Yet an over-saturated public university system accepts just a fraction of applicants, and many aspirants lack the means to pay for private college. That’s where FINAE, an institution specializing in financing higher education, comes in.
In a credit market for higher education still in its infancy, FINAE is serving a population that traditional banks have mostly ignored: students who are the first in their family to attend college, whose families fall into a bracket with middle-class aspirations, if not income. Parents think about education like an inheritance, says Celia Guerra, director of financial aid at Mexico’s private Universidad Panamericana, which facilitates FINAE credits. She says parents tell her: “Since I don’t have money, all I can leave my children is an education so that they can get ahead on their own.”
April 10, 2013
The New York Times, 4/9/13
I was in Mexico City in the summer of 1981, just out of high school, when Mexico’s president, José López Portillo, announced he would defend the peso “like a dog” against speculative attacks. His approach to economics was unorthodox but creative. He tried to raise oil prices by sheer force of will — firing the director of the state oil company Pemex for having the temerity to reduce the price of Mexican crude as oil plummeted on international markets. He froze dollar accounts in local banks to try to stem capital flight.
But the canine defense didn’t work. In 1982, interest on foreign debt swallowed almost two-thirds of the country’s export revenue. In February, Mexico’s currency started plummeting. In August, Jesús Silva Herzog, Mexico’s finance minister, flew to Washington to tell Paul Volcker at the Federal Reserve and Donald Regan at the Treasury Department that Mexico could not make its coming payments to American and other foreign banks.
February 20, 2013
México es uno de los países con los niveles de recaudación más baja en América Latina, incluso “estamos por debajo de Haití después del terremoto”, informó el experto Jorge Alatorre Flores.
El secretario del Instituto de Investigación en Política Pública y Gobierno del Centro Universitario de Ciencias Económico Administrativas (CUCEA) explicó que el pago de impuestos está concentrado en la Población Económicamente Activa (PEA) formal.
November 7, 2012
When Samuel Chacon took over as mayor of the southern Mexican border town of Tapachula last month, he found the equivalent of about 40 cents in the council’s bank account and debts of more than $38 million.
In a move aimed at preventing such surprises, the Mexican Congress on Tuesday approved a new law that will shine a spotlight on the murky world of state and municipal finances, closing loopholes allowing potential misuse of public funds and forcing governments to track spending, publish budgets online and reveal their debts.
September 5, 2011
The Wall Street Journal, 9/5/11
Latin American companies are looking to Mexican financial markets to diversify their financing at more attractive terms than available in the U.S. or Europe.
Mexico’s economic links with the U.S., stable macroeconomic conditions and ease of access make the country an alluring alternative for obtaining financing, compared with tapping investors in developed countries, market participants said Monday.
Mexican pension funds have amassed sizable savings–about $125 billion at the end of July–and are actively seeking to diversity their investments.
August 14, 2011
The Wall Street Journal, 8/14/11
Mexico’s Finance Minister, Ernesto Cordero, said Sunday that the federal government plans to help state governments refinance their debt with guarantees from the state development bank Banobras.
“Although the debt of the states isn’t a generalized problem, at 2.5% of gross domestic product, there are some states that need to carry out refinancing operations to improve their financial position,” Cordero said in a statement read on a webcast.
The help would involve guarantees from the public works development bank Banobras, and the government is already working with some states that need to improve their debt profiles, he said.
August 31, 2009
Photo by Flickr user Aleiex
Aug. 31 (Bloomberg) — Mexican President Felipe Calderon must create new sources of revenue to offset declining oil income if the country is to avoid a downgrade of its debt rating, Standard & Poor’s analyst Lisa Schineller said.
S&P may cut Mexico’s BBB+ status before the end of the year, depending on how Calderon and legislators address ways to boost tax collection when they discuss the 2010 budget next week, Schineller said in an interview. That’s more important in assessing the country’s capacity to pay debt than any increase in the budget deficit, which economists say may widen to 3.5 percent of gross domestic product from 3 percent this year.
June 18, 2009
Associated Press, 6/18/2009
Strained by $18 billion in debt and uncertainties about refinancing negotiations, Cemex, the third-largest cement producer in the world, could use some of its own product to shore up its foundation after years of aggressive acquisitions.
Cemex ( CX – news – people ) shelled out $15 billion in 2007–at what turned out to be the tail end of the building boom–to buy Rinker, the Australian building materials group. The subsequent collapse of the U.S. housing market eviscerated demand, leaving Cemex struggling to handle the debt it incurred in the deal.
The Mexico-based company has been forced to shed jobs and assets, and it is in its second round of refinancing.
June 3, 2009
Wall Street Journal, 6/3/2009
As Mexico ploughs through its deepest recession since the crisis of 1995, revamped public finances and well-capitalized local banks put it on a much stronger footing than it had 14 years ago.
Mexico faces a perfect storm of a recession in the U.S., which buys 80% of its exports, a decline in global trade due to weakness in the major economies of Europe and Asia, and a domestic influenza epidemic in late April and early May that hurt service industries such as tourism and restaurants.
Today’s woes are largely the product of the international financial crisis and resulting global downturn, while the so-called Tequila Crisis was a home-grown disaster fueled by an overvalued currency, large public-sector deficits and government dependence on financing linked to the U.S. dollar.
In February 2009, Guillermo Ortiz, Governor of Mexico’s central bank, wrote a commentary comparing Mexico’s relative levels of preparation for the Tequila crisis and the current global financial crisis.
See also an analysis by Bloomberg on how the swine flu outbreak has contributed to Mexico’s deteriorating economic climate.