SAN JUAN, Puerto Rico, June 29 (UPI) -- Governor of Puerto Rico Alejandro García Padilla said the commonwealth island will not be able to pay debts of more than $72 billion, setting the stage for a financial crisis.
García Padilla will hold a televised event to address Puerto Rico's 3.6 million residents Monday evening about the financial crisis, as the island has more debt per capita than any U.S. state.
"The debt is not payable," García Padilla previously said alongside his senior staff members according to The New York Times. "There is no other option. I would love to have an easier option. This is not politics, this is math."
The governor will probably seek significant concessions from as many as all of Puerto Rico's creditors, including debt payment deferment and a repayment timeline extension.
"If they don't come to the table, it will be bad for them," García Padilla said of the creditors. "What will happen is that our economy will get into a worse situation and we'll have less money to pay them. They will be shooting themselves in the foot."
Puerto Rico's debt obligation is four times more than that of Detroit, Mich., which in 2012 became the largest city to file bankruptcy. The island has been attempting to grant bankruptcy protection for its public corporations in Congress, but has not succeeded, and as a commonwealth, Puerto Rico does not have to option to declare bankruptcy itself.
A default on Puerto Rico's debts would create a financial and legal crisis for creditors and residents that could take years to resolve.