According to Senate Bill 8-97, the national legislature, the Olbiil Era Kelulau, “finds that the Republic’s current financial situation is dire due to the global economic recession and an unprecedented reduction in the Republic’s collection of local revenues. The Republic has unpaid bills totaling as much as $10 million. The inability of the Republic to pay its debts is affecting the ability of the national government to obtain goods and services and to provide important government services. In light of this, the Olbiil Era Kelulau finds it necessary for the Republic to be given the authority to obtain a line of credit to pay its outstanding debts,” the measure said.
The bill will allow President Johnson Toribiong to negotiate for and obtain a revolving line of credit for no more than a one-year period, renewable annually.
The measure also allows the government to borrow money from the National Development Bank of Palau.
Toribiong said the Palau government accumulated unpaid obligations of $10 million due to an overestimation of revenue collections.
