Puerto Rico provides $787 million in aid to fight economic collapse from coronavirus

As Washington continues to wrangle over how to rescue an economy gutted by the coronavirus, Puerto Rico announced Monday it will begin mailing out checks this week to keep workers, businesses and first responders afloat during the crisis.

In a national address, Gov. Wanda Vázquez said the rescue plan will pump $787 million into the local economy — one of the most generous incentive packages of any U.S. jurisdiction.

“One of the major concerns of this government is how to preserve our social fabric,” she said. “What do we do so that, once this crisis is over, we’ve protected our physical, mental and economic health?”

The announcement comes as the U.S. territory of 3.2 million people is entering its second week of a virtual lockdown. All non-essential businesses have been closed since March 16, and residents are being told not to leave their homes unless it’s necessary.

Among the measures announced Monday, the government will give $500 dollars, in cash, to those who are self-employed, or about 170,000 people. In addition, the government will give $1,500 to small and medium businesses that have been forced to shutter during the COVID-19 crisis.

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Also, the island’s 134,200 public-sector workers will continue to receive their salaries, and municipalities are being asked to keep paying their 51,500 employees.

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The package also includes cash bonuses for nurses, health technicians, first responders, firefighters, correctional officers and others who are on the front-lines of the health crisis.

Beyond the cash infusion, the decree establishes a 90-day moratorium on mortgage, car and personal loan payments, for those who ask for them. And unemployment benefits will be extended to the self-employed — covering many in the gig economy who might not have otherwise qualified.

In addition, residents cannot have their power or water disconnected as long as the governor’s emergency decree is in effect, Vázquez said.

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The stimulus package come as the island has taken some of the most dramatic measures to combat the spread of the coronavirus, shuttering businesses and instating a curfew. As of Monday, the Health Department has reported 31 cases and two deaths.

But the measures are taking an economic toll. If the U.S. territory were a state, it would be the poorest in the union and have the highest unemployment rate. Many people live paycheck to paycheck, making the two-week shutdown particularly painful.

David Medina, the president of AOR Building Supplies, a San Juan-based construction supply company, was forced to close his doors on March 15 and send his 35 employees home.

While his business can afford to pay its workers for the two weeks they’re off, he’s certain that many other small businesses on the island won’t be able to handle the stress.

“We’ll have to wait and see if smaller companies can absorb this hit,” he said. “Unfortunately, I think we’ll see lots of businesses go under because they won’t be able to handle it.”

Despite the economic strain, Medina praised the governor for shuttering non-essential businesses in hopes of curtailing the spread of the coronavirus.

“She made the right decision. We have to take care of ourselves,” he said. “Then we can figure out how to overcome this.”

Monday’s package also includes $30 million to restock public hospitals and an additional $20 million for gloves, masks and other protective gear for the Public Security Department, Vázquez said.

The incentive package has been approved by the Fiscal Oversight and Management Board — a federally appointed body that oversees the island’s spending and budget decisions.

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“Given the unprecedented reality Puerto Rico currently faces in light of COVID-19, the Financial Oversight and Management Board for Puerto Rico today authorized the Government of Puerto Rico to use $787 million to fight the COVID-19 emergency,” the board said in a statement. It had previously given the island permission to use $160 million stashed in an emergency reserve fund.

Monday’s announcement comes as the federal government is still trying to craft its own economic incentive package and as other states are trying to protect their economies. Vázquez said the Puerto Rican plan is generous when compared to California’s $500 million stimulus package or Washington State’s $200 million incentive plan.

“This will be one of the most complete and ambitious packages that have been approved to confront this crisis,” she said.

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