The Minister of Finance, Ignacio Briones, announced a bill that aims to improve the "transparency, competition and efficiency" of the state procurement system. This action is a response to the preliminary report "Market Study on Public Procurement" by the National Economic Prosecutor's Office. According to the report, there was a series of shortcomings - especially with regard to competition and transparency - in Chile's public procurement market, along with sliding several recommendations to improve the efficiency and operation of this.
The Minister of Economy, Lucas Palacios, reported that the Government will allow construction workers who live in quarantined communes to move to areas that are more advanced in the reactivation plan, with strict sanitary measures. The government will gradually scale up this pilot plan, so that people in the construction sector can go back to work. Palacio emphasized that "the construction sector has an infection rate of 3 out of 1,000, which is six times less than the rest of the country."
Alfredo Moreno, Minister of Public Works, presented an update regarding the Chilean recovery plan promoted by the Government. Moreno said that calls of 150 bids for more than $150 billion have been made. He estimates that these calls alone could produce more than 10,000 new jobs. He also annouced that the call for bids for the Bio Bio hospital network have been made. There are four new hospitals for Nacimiento, Santa Bárbara, Coronel and Lota. There are 570 beds that will be entered into the health system with an investment of more than $300 million for that region.
Chilean President, Sebastian Piñera, said that more than one million people had received the government’s $626 spot payment, aimed at staving off the economic effects of the pandemic, and it had approved more than 550,000 requests for soft loans of up to $815.
The Senate Chamber passed a bill with tax measures for economic recovery which aims to inject liquidity to SMEs and companies. The bill defines a temporary reduction from 25% to 10% of the First Category Tax for SMEs under the Pro-SME Regime for income obtained between 2020 and 2022. These companies will also be halved in the rate of provisional monthly payments. It also allows companies under the Pro Pyme Regime to request a refund of the accumulated remainder of the VAT tax credit, which is obtained from the declaration of said tax that is made in July, August or September 2020.
Luis Óscar Herrera, the Finance Ministry's macroeconomic coordinator, was appointed by the Central Bank of Chile as alternate director for the Southern Cone on the board of the Washington-based International Monetary Fund (IMF), a position he will assume in November.
The Chilean Government announced a mega-plan for investment in public works for $34,000 million until 2022, which includes 2,544 infrastructure projects and seeks to boost the country's economy. Of the total amount, $24,521 million are incentives for private investment and $9,360 million will be provided by the Ministry of Works, according to the Chilean President. Piñera stated, "The main objective of this plan is to contribute to recovering the 1.8 million jobs we have lost and the 700,000 that are suspended by reactivating our economy".
The Ministers of Finance, Transportation and Social Development all signed a protocol to deliver direct economic aid to the transporters in Chile. The agreement with the representatives of the sector consists of the delivery of a one-time bond of CH$350,000 ($438.8) and the possibility of accessing an exclusive emergency loan of CH$320,500 ($401.8), which can be requested up to three times.
Chile’s Congress has approved a law to allow the Central Bank to buy bonds issued by the country’s treasury in the secondary market, potentially giving the bank added firepower to help offset fallout from the pandemic. The move represents a shift for Chile. Previously, the Central Bank was prohibited from acquiring debt issued by any state organization or from financing public spending through direct or indirect credit. Finance minister Ignacio Briones said in a statement that the measure was a “tool of exceptional use” that would help ensure the country was better placed to withstand future financial shocks.
Chile's Senate approved a free trade agreement with Brazil, cementing the country's long-standing relationship with its top trade partner in Latin America. The agreement, which builds on rules facilitating commerce already in effect between Chile and Mercosur bloc nations Brazil, Argentina, Paraguay and Uruguay, is likely to boost thriving trade between the two nations. As both countries have been greatly impacted by COVID-19, this agreement will help regulate and boost trade in several key areas.