Puerto Rico to Default on Debt Repayment due Monday - Governor

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Puerto Rico will default on its debt payments to its creditors, reportedly standing at $422 million, due on Monday, Governor Alejandro Garcia Padilla said.

MOSCOW (Sputnik) — Speaking in a televised address on Sunday, Garcia Padilla said he had ordered the Government Development Bank for Puerto Rico (GDB) to not make the payments owed. According to the USA Today newspaper, the US territory was supposed to pay back $422 million in bonds Monday.

In this May 4, 2012 photo, the flags of Puerto Rico and the U.S. wave behind an English one-way traffic sign in Guaynabo, Puerto Rico, one of only a few places in Puerto Rico with street signs in English - Sputnik International
US Treasury Secretary to Discuss Puerto Rico Debt Crisis

"This was a painful decision. We would have preferred to have had a legal framework to restructure our debts in an orderly manner. But faced with the inability to meet the demands of our creditors and the needs of our people, I had to make a choice. I decided that essential services for the 3.5 million American citizens in Puerto Rico came first," Garcia Padilla said, as quoted by the media outlet.

Puerto Rico’s debt is $72 billion.

The Obama administration has warned of a potential humanitarian crisis if Puerto Rico defaults on its loans. The poverty rate on the island is already three times higher than in the mainland United States and public services will likely be cut if the crisis is not resolved.

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