Puerto Rico will default on $1 billion of debt on Friday

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The Capitol in Puerto Rico.

The governor of the commonwealth, Alejandro García-Padilla, wrote in an op-ed for CNBC Wednesday that the territory will not make some $1 billion in bond payments on Friday as it struggles with the long-term implications of it's massive deficits.

"On July 1, 2016, Puerto Rico will default on more than $1 billion in general obligation bonds, the island's senior credits protected by a constitutional lien on revenues," he said in the post.

García-Padilla also emphasized the need for a long-term restructuring of the territory's more than $70 billion in debt, saying Puerto Rico's obligations "must be restructured fairly and equitably" for both the creditors and citizens.

In addition, the US Senate passed a bill Wednesday, just hours after García-Padilla's op-ed, that will allow Puerto Rico some of the same bankruptcy protections afforded to states, which had previously not been allowed under US law.

Under the new bill, which is expected to be signed quickly by President Obama, the territory will have to cut some of its public services and establish an outside board to guide the restructuring.

García-Padilla disagreed with the board provision, but had been campaigning for the bill's passage on Capitol Hill as recently as Tuesday.

"It creates an oversight board that unnecessarily undercuts the democratic institution of the Commonwealth of Puerto Rico," said his piece. "But facing the upsides and downsides of the bill, it gives Puerto Rico no true choice at this point in time."

More to come...