Peru Asks Congress for US$2.4 Billion as El Niño Looms
PERU · ECONOMY
Key Facts
- —The country Peru is a copper and fishmeal exporter on South America’s Pacific coast, led by President Keiko Fujimori of the conservative Fuerza Popular party.
- —What happened Economy Minister Elmer Cuba urged Congress’s budget committee on Monday 5 October to pass S/8.228 billion (about US$2.4 billion) in extra spending.
- —The weather share S/581 million (about US$169 million) goes directly to El Niño prevention and emergencies, about 7% of the package.
- —Who pays Tax revenue lifted by copper covers 46.2%. New sovereign bonds, which Peru may sell abroad, cover the other 53.8%.
- —The US angle Defence wants S/1.197 billion (about US$347 million) as a first payment on 12 more US-made F-16 fighter jets.
- —Prediction markets Polymarket gives a 73.5% chance that this El Niño peaks above 2.5 on the US weather agency’s ocean index (6 October, 12:41 p.m. ET).
- —Still open The committee has not voted, and lawmakers have begun debating additions to the bill.
Peru’s government urged Congress on Monday 5 October to approve S/8.228 billion (about US$2.4 billion) in extra spending, with El Niño threatening heavy rains. More than half would come from new government bonds, which Peru may sell abroad as well as at home.
One Defence item alone is S/1.197 billion (about US$347 million), a first payment on 12 more US-made F-16 fighter jets. That is about twice the S/581 million (about US$169 million) set aside directly for El Niño.
Where the Money Goes
President Keiko Fujimori and Prime Minister Luis Galarreta, head of the cabinet, sent the bill to Congress on Wednesday 30 September. Conversions here use about 3.44 soles to the US dollar on 6 October 2026.
Cuba, who oversees the budget and public debt, defended it on Monday before the joint budget committee of the Senate and Chamber of Deputies. Senator José Arista Arbildo of Fuerza Popular, the president’s party, chairs that committee.
Under the bill, schools would get S/762 million (about US$221 million) to make 12,054 buildings less vulnerable to the rains. Health services would get S/691 million (about US$201 million).
School kits for more than 1.2 million poor pupils and market upkeep would take S/516 million (about US$150 million). Water and sanitation would get S/380 million (about US$110 million).
Each member of Pensión 65, a state cash scheme for poor older people, would get an extra S/350 (about US$102). The Transport Ministry would get S/1.038 billion (about US$301 million), including S/570 million (about US$165 million) for Lima’s Metro Line 2.
Unpaid Pensions and Fighter Jets
Cuba said the previous government had not budgeted military and police pensions from July to December, El Comercio reported. “We will not be able to pay the pensions of soldiers and police officers in the coming months,” he warned.
Defence Minister Rafael Belaunde Llosa asked for S/499.2 million (about US$145 million) for October to December pensions. Interior Minister César Astudillo Salcedo asked for S/847 million (about US$246 million) for retired police.
Astudillo also wants S/250 million (about US$73 million) for patrol cars and bulletproof vests.
Belaunde’s biggest item is S/1.197 billion (about US$347 million), the first payment on 12 more F-16 jets, Gestión reported. The second batch costs S/5.7 billion (about US$1.65 billion), and Congress’s own summary of the session names the model as the F-16 Block 70.
How Peru Will Pay for It
Cuba said 46.2% comes from ordinary revenue, mainly stronger collection by Sunat, Peru’s tax agency, helped by higher copper prices. The other 53.8% comes from sovereign bonds.
The bill allows bond sales at home or abroad of up to S/4,428,734,398 (about US$1.29 billion). That borrowing also helps fund the 2027 Pan American and Parapan American Games in Lima.
The ministry says the 12-month fiscal deficit was 1% of gross domestic product (GDP) in August. “None of this puts fiscal solvency at risk,” Cuba said, citing the 1.8% of GDP deficit target.
On Monday 21 September, Cuba met Moody’s Ratings, S&P Global Ratings and JPMorgan in New York to help keep Peru’s sovereign credit rating solid.
Why the Weather Worries Lima
ENFEN, Peru’s El Niño monitoring commission, said on Monday 28 September that coastal sea warming would stay “extraordinary” until January 2027. It expects heavier than normal rain on the northern and central coast from October to December.
Rivers such as the Tumbes, Chira and Piura could run high, and air temperatures could set new records along the coast.
Fishing is already suffering, says Jessica Luna, head of the National Fisheries Society (SNP), the industrial fishing association. In remarks reported on Thursday 1 October, she said there will most likely be no second anchovy season in the north-centre zone.
She said the first season caught only 25% of its quota, RSD Noticias in Chimbote reported. Anchovy is the raw material for Peru’s fishmeal, which feeds farmed fish and livestock.
The spending bill is separate from the government’s request for temporary law-making powers, another test of its ties with Congress.
What Prediction Markets Say
Polymarket bettors put a 73.5% chance on this El Niño peaking above 2.5 on the Relative Oceanic Niño Index (RONI). That price stood at 12:41 p.m. ET on Tuesday 6 October.
NOAA, the US weather and oceans agency, uses the RONI sea-temperature gauge to rate the warming. Another 23.5% goes to a peak between 2.25 and 2.5, and the market has drawn about US$69,000 in bets.
Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.
What It Means for You
For US bond investors, the bill means more Peruvian government debt coming to market if Congress approves it. For the US defence industry, it would fund a payment on Peru’s second batch of F-16 jets.
For fishmeal buyers, a lost anchovy season would cut supply from Peru. Travellers to the northern coast should check warnings from SENAMHI, Peru’s weather service, before visiting Tumbes or Piura.
What Is Not Known
The committee has not set a vote date, and lawmakers have begun debating additions to the bill. The ministry has not said when the bonds will be sold, in which market or in which currency.
Imarpe, Peru’s state marine research institute, ends its anchovy survey on Wednesday 7 October, RSD Noticias reported. How much damage the rains will cause is still unknown.
More: Peru news in English, every day from The Rio Times.
Frequently Asked Questions
How much is Peru asking Congress for?
S/8.228 billion (about US$2.4 billion) in extra 2026 spending, filed on Wednesday 30 September. Economy Minister Elmer Cuba defended it before the joint budget committee on Monday 5 October.
How much of the money is for El Niño?
S/581 million (about US$169 million) goes directly to El Niño prevention and emergencies. School upkeep and health spending are also presented as protection against the rains.
Why does this matter to US investors?
More than half, up to S/4,428,734,398 (about US$1.29 billion), would come from new sovereign bonds that Peru may sell abroad. The package also pays toward US-made F-16 fighter jets.
Will Peru break its deficit target?
The minister says it will not. He said the spending fits the 1.8% of GDP deficit target, after a 12-month deficit of 1% of GDP in August.
Sources: Ministry of Economy and Finance (MEF): press release on the supplementary credit, 5 October 2026; Congress of Peru: budget committee hears the supplementary credit, 5 October 2026; ENFEN: Official Communiqué No. 17-2026, 28 September 2026; Ministry of Economy and Finance (MEF): minister meets rating agencies in New York, 21 September 2026; Andina: executive files the supplementary credit bill, 30 September 2026; El Peruano: minister Cuba before the budget committee, 5 October 2026; El Comercio: Cuba warns of unfunded military and police pensions, 5 October 2026; Gestión: what the supplementary credit would fund, 6 October 2026; Caretas: government asks Congress for El Niño and other needs, 6 October 2026; Peru Informa: bicameral committee reviews the supplementary credit, 5 October 2026; RSD Noticias: SNP expects no second anchovy season, 1 October 2026.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief