"Puerto Rico has a leadership problem": bankers demand tax reform and faster permits at economic summit

When Puerto Rico's top bankers sit together and agree on a diagnosis, it is worth listening. At the first economic summit organized by the Association of Financial Products and Assets (APAF), the CEOs of Oriental Bank, Citi Puerto Rico, Banesco USA, and Popular held nothing back: the island's tax system is "archaic" and "extremely complex," and the underlying problem is not technical but one of political will ¹.

José Rafael Fernández, president of Oriental Bank, was the most direct: "Puerto Rico has a leadership and execution problem" ¹. His argument: the island has had the correct diagnoses of its economic problems for decades, but lacks the institutional capacity to implement solutions consistently.

What the Bankers Said

The four executives agreed on three central points:

Comprehensive tax reform. The current system has too many niches, exemptions, and complexities that benefit a few and harm the majority. The bankers argue that a broader tax base with lower rates would generate more revenue and stimulate investment ¹.

Faster permits. The construction and commercial operation permit process in Puerto Rico remains one of the slowest in the Caribbean. Projects that take weeks in other jurisdictions can take months or years here. The bankers see this as the main brake on private investment ¹.

Preparing for the end of federal funds. Puerto Rico has received billions in post-María, post-earthquake, and post-pandemic recovery funds. Those funds are temporary. When they run out — and they will run out — the island needs an economy that can sustain itself ¹.

The Context That Matters

This summit does not occur in a vacuum. Puerto Rico simultaneously faces a severe drought, a chronic energy crisis with LUMA, a population exodus that has not stopped, and a Fiscal Oversight Board that just extended the fiscal emergency declaration for all of 2026.

At the same time, the island has real opportunities: tourism is at record numbers, pharmaceutical manufacturing remains competitive, and federal reconstruction funds — though temporary — represent a massive capital injection.

The question the bankers are raising is not whether Puerto Rico has potential. It is whether it has the institutional capacity to convert that potential into concrete results.

What It Means for You

For the average citizen, the bankers' message translates into something simple: if the government does not simplify taxes and speed up procedures, private investment — which is what creates stable jobs — will continue to be less than it could be.

If you are an entrepreneur or business owner, the slowness in permits is a real cost that affects your ability to compete. The bankers are asking for exactly what thousands of merchants have been requesting from the trenches for years.

If you are planning your financial future on the island, the warning about the end of federal funds is crucial: jobs tied to reconstruction projects will not be permanent.

How to Do It — Checklist to Navigate the Landscape

1. Check if you are taking advantage of all available tax incentives — from Act 60 for investors to credits for small merchants. Consult with a CPA who specializes in Puerto Rico taxes.
2. If you have a business, digitize your paperwork with CRIM, Hacienda, and OGPE to minimize time lost in lines and paperwork.
3. Diversify your income sources — do not depend exclusively on government contracts or reconstruction projects that have expiration dates.
4. Stay informed about tax reform — when legislation is introduced, your participation in public hearings matters.
5. Build a professional emergency fund — if your job is tied to federal funds, plan for a transition.

What Comes Next

APAF plans to make this summit an annual event and is already working on concrete tax reform proposals to present to the legislature in January 2027. The bankers are also pushing for a public-private working group to accelerate permit processes ².

Meanwhile, the Fiscal Oversight Board has its own fiscal reform agenda that could either clash with or complement the banking sector's proposals. The next inflection point will be the fiscal plan review in September.

What is certain is that for the first time in a long time, the private sector is speaking with a unified voice. Whether the government listens or not remains to be seen.

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Sources: ¹ El Nuevo Día — "Puerto Rico has a leadership problem," according to bankers ² APAF — First Economic Summit, reform proposals