The $2.87 Billion Financial Adjustment by the Ministry of Finance
The Petro Government has made a significant financial move to mitigate the repercussions of a drastic decline in royalty income. On March 19, 2026, through Decree 0288, the Ministry of Finance allocated $2.87 billion to the General Royalties System (SGR) budget for the 2025-2026 biennium. This funding comes from the dissavings of the Savings and Stabilization Fund (FAE), a financial tool specifically designed to cushion income shocks in the sector.
Reasons Behind the Financial Intervention
This crucial measure was necessitated by an alarming consistency in the drop of collections, compelling the government to resort to this exceptional mechanism. In 2025, current SGR collections experienced a nominal decrease of 10% compared to 2024, leading to an accumulated year-on-year fall of 39.9% in relation to 2023, marking the beginning of this negative trend.
The government’s documentation emphasized that such deterioration complies with legal stipulations that permit the use of accumulated savings for this purpose, thereby underscoring the necessity of the action taken.
Mechanics of the Financial Allocation
According to the decree, the exact allocation of funds was specified at $2,874.766 million. The sum is calculated based on a technical formula designed to stabilize available resources for regional investments. It is determined as the difference between 74% of the average current income over the last six years and the current income for the year impacted by the downturn.
Utilization of Funds to Stabilize Regional Projects
The government justified this measure as an urgent necessity to prevent delays in project execution across various sectors. By allocating these resources, the decree aims to “stabilize the income of the territorial entities,” thus giving them access to “exceptional funds” that were previously unavailable due to falling collections.
The breakdown of this funding reflects a targeted approach, with around $971.204 million earmarked for direct allocations to departments and municipalities, while $582.722 million is designated for local investments in areas with the greatest needs. Additionally, more than $1.32 billion will cater to regional investment, which encompasses both departmental projects and strategic regional initiatives.
Future Commitments and Emergency Response
A vital aspect of these resource allocations is the requirement to prioritize existing commitments. The decree stipulated that the dissaving funds must first be utilized to finance obligations from past periods that remain unpaid. Only after satisfying these demands can territorial entities initiate new projects.
Furthermore, the document allows for resources to be directed towards addressing emergencies, emphasizing that local governments may prioritize investments to tackle natural disasters and their aftermath, acknowledging the increased urgency presented by recent climate-related events affecting multiple regions.
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