Colombia's TES bond yields and the burden of domestic debt

High interest rates paid on domestic public debt securities (TES), which exceed 10% a year, have guaranteed extraordinary income for the banking sector and private pension fund administrators, absorbing more than 20% of the Nation's budget through interest payments alone.

The Colombian state allocates millions of dollars from tax revenue to sustain the returns of financial intermediaries, reducing the funds available for public works and health investment.

This financial burden limits the state's fiscal room to finance tertiary road infrastructure and public health, transferring massive public resources to private commercial banks.

A restructuring of domestic debt that reduces the interest rate surcharges is required.