... Ratings believes that the amendments to the Fiscal Coordination Law (FCL) and the regulation included in the constitutional initiative on financial discipline will strengthen the institutional framework of subnational entities in Mexico. In particular, the regulation should encourage indebtedness responsibility through formal prudential rules and greater supervision by the federal government. Favorable Expectation on Federal Revenues: As a result of the changes approved at the federal level regarding fiscal matters, the Federal Revenue Law of 2014 estimated that the Federal Revenue Sharing Collection (Recaudaci=n Federal Participable, [RFP]) would stand at MXN2.29 billion. This translates to a projected growth of 7.8%, with respect to the figure estimated for 2013. Incentives to Strengthen Local Revenues: Although the federal contributions formula had no material changes, the revenue collection effort of the entities will be measured in 2014,...
