In 2016, then-Governor Alejandro García Padillas declared Puerto Rico’s debts “unpayable.” With $72 billion in debt, García Padilla did not mince words. “The debt is not payable,” he said. “There is no other option. I would love to have an easier option. This is not politics, this is math.” Soon after that, the Obama White House established the PROMESA Financial Oversight and Management Board, an unelected group that had the power to overrule Puerto Rico’s elected government. The Board had the goal of restructuring Puerto Rico’s debt and helping to establish fiscal responsibility and repaired credit access.
Much has changed since then:
- In 2016, Puerto Rico’s GDP was $104.3 billion; current figures estimate it a t$129 billion.
- GNP was down by 1.3%; current figures show 4.5% growth.
- Unemployment was at 12%; now it’s at a record low of 5.7%.
- Public debt was over $72 billion; now it’s around $22 billion, with only one major entity still in restructuring.
- In June 2025, Puerto Rico passed a balanced budget that was certified by the Financial Oversight and Management Board.
Puerto Rico has prioritized fiscal responsibility and transparency, and the Island is emerging from the debt restructuring process with a growing economy.
Infrastructure and manufacture
Puerto Rico has been working to devote federal recovery funds to long-term improvement in infrastructure. Unreliable electricity has been the most obvious issue and it still is not solved. However, there are also challenges in business logistics, healthcare facilities, school buildings, and water safety. Recent injections of federal funds have created opportunities to improve these limitations,, bringing economic opportunities for the future when the temporary funds will no longer be available.
The territorial government is working to provide a business-friendly climate, to encourage U.S. companies to consider reshoring to Puerto Rico, and to support local entrepreneurs. The result has been growth in tourism and pharmaceuticals manufacturing, with improved employment encouraging domestic consumption of goods and services.
What’s next?
With fiscal discipline and new tools allowing data-driven policy divisions, Puerto Rico is in a strong position to continue to develop economically. However, the poverty level continues to be high, especially among children. An aging population which continues to shrink from outmigration to the states — though the rate is slowing — adds to the difficulty of moving from high-level markers of improvement to actual improvements in people’s lives.
Dependence on federal funds continues to be an issue, and tax dodges continue to bleed revenue from the Island to states. Puerto Rico’s GDP is not a reliable indicator of economic health because much of the profits included in the figures actually end up in the states, not in Puerto Rico. Roughly half the population of the Island still has to rely on federal support for food and medical care. We should celebrate Puerto Rico’s economic development, but we also have to recognize that the rising tide is not yet lifting all boats.
Would statehood help?
As a state, Puerto Rico would have a level playing field. This would include greater federal support, but it would also mean greater stability. The small fraction of independence supporters is currently using the strategy of claiming that separatism is popular in Puerto Rico, though that option got only 11% of the votes in the last status vote. Mainland companies that believe this fairy tale will be hesitant to invest in facilities in Puerto Rico. Building a factory in a U.S. territory that might soon become a foreign country is not a desirable opportunity.
Statehood is the way to continued growth and stability. Tell your legislators that Puerto Rico should become a state.
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