Puerto Rico's Massive Debt Could Hurt Its Hurricane Recovery

Puerto Rico's hurricane recovery efforts could be hampered by the more than $70 billion it owes in debt.
Posted at 8:54 PM, Sep 22, 2017

Puerto Rico is still grappling with the dire consequences of Hurricane Maria. The storm caused at least six deaths on the island, knocked out the power for all 3.4 million residents and left severe flood risks.

But the island was in crisis even before Maria hit — it filed for bankruptcy in May with $70 billion worth of debt. Now, Puerto Rico's financial woes could make recovering from the hurricane even harder.

An act of Congress handed control of Puerto Rico's finances to an independent board. The board recently reallocated up to $1 billion of the island's budget for emergency use — which is still short of the estimated $20 billion in physical damage from Maria.

The territory's power authority was already $9 billion in debt and in need of a $4 billion overhaul before Maria hit. Now, it could take months to fully turn the power back on, which would make it harder to deal with the island's creditors.

President Trump already authorized a disaster declaration for Puerto Rico, helping the island pay for 75 percent of the debris cleanup and public safety measures.

And the damage isn't over yet. On Thursday, rain was still pouring down on the already flooding island, according to the National Hurricane Center. Maximum rainfall is expected to reach 40 inches.