THE CNMI government still has over $500 million in federal funds for infrastructure investments, Gov. Arnold I. Palacios told the Legislature.
“We are…pleased to inform the Legislature that the total remaining balance for the infrastructure investments stands at over $500 million,” the governor said in his fiscal year 2024 annual report to Senate President Edith Deleon Guerrero and Speaker Edmund S. Villagomez dated Dec. 31, 2024.
Palacios said this amount includes funding from the Federal Emergency Management Agency and the Community Development Block Grant-Disaster Recovery and other major federal grants. Together, the governor said, “these commitments present a remarkable funding total of over one billion dollars that have been successfully secured.”
The governor, who chaired the CNMI Highway Task Force in the previous administration, said “these significant investments not only highlight our dedication to enhancing military capabilities but also underscore the importance of collaboration in achieving our goals.”
He told lawmakers that their “continued support and engagement in this process are invaluable as we work towards a robust future.”
Economic outlook
In his annual report, the governor said his administration continues to “promote fiscal stability” while maintaining its “commitment to building a strong foundation for the economy.”
He said this involves “investing in infrastructure and workforce development to create a diverse economy that’s resilient and not reliant on factors beyond our control.”
He said his and Lt. Gov. David M. Apatang’s “vision of a CNMI that is fiscally responsible is evident” through their “prudent fiscal management policies and intentional efforts to reduce millions in outstanding government obligations and liabilities as well as timely cash transfers to the Public School System, Northern Marianas College, and the Health Network Program for critical medical referrals.”
The governor said the restoration of the executive branch’s 80 work hours and the lifting of the austerity measure in FY 2025 “is a testament to our priority to reducing the hardship of government employees and ensuring its maintenance throughout the fiscal year.”
The governor imposed the work-hour cut in 2023 and lifted it during the early voting period in Nov. 2024.
In his report, he said he is also looking forward to the outcome of the 902 consultation report from the Office of Insular Affairs, “where we had invested significant effort and provided supporting data of the CNMI’s need for direct financial assistance for government operations.”
“I remain optimistic that the current administration and the incoming President-elect will continue 902 Covenant discussions for the best interest of the CNMI,” said Palacios, who won as an independent gubernatorial candidate in 2022, but has recently re-joined the Republican Party.
He also welcomed the opening of Marianas Beach Resort at the same property previously leased to Hyatt Regency Saipan, and its transformation into a Sheraton-brand hotel “within the coming months.” The governor said this new development will “increase hotel rooms and promote tourist-related activities.”
Tourism marketing activities
The governor also reported that the Marianas Visitors Authority has projected increased marketing activities and working with the Commonwealth Ports Authority “to expose the CNMI to new airlines.”
Palacios said in FY 2025, his administration is projecting twice daily service by Jeju Air from Seoul-Incheon, Korea; daily flights from Busan by T’Way, which will also have a twice-weekly charter service through Feb. 25, 2025; twice-weekly service from Hong Kong by Hong Kong Airlines; and three weekly flights from Tokyo-Narita by United Airlines.
“There are positive indications of additional airlift from Japan by a Japanese carrier, and MVA is also engaging with a full-service carrier from the Korea market,” Palacios said.
“Based on current airlift, arrivals are anticipated to increase to at least 252,000, to include a full recovery of Korea market arrivals and 60% recovery of total arrivals compared to pre-pandemic levels,” the governor added.
In 2019, prior to the pandemic, a total of 487,008 tourists visited the CNMI.
The Saipan Chamber of Commerce has said that annual arrivals of at least 500,000 visitors will allow the tourism sector to “break even.”
Palacio said the development of a “strong third source market” will remain a priority of MVA and
“is critical to restoring a healthy and vibrant economy.”
He said MVA’s marketing efforts, “coupled with development and growth of annual signature events, such as the Rota Sweet Potato Festival, must also be accompanied by CNMI-wide destination improvements, including addressing blighted buildings, airport improvements, public restrooms, stray dogs, and other issues.”
Military buildup
Palacios said the military development and planned investment in the CNMI, most evident on Tinian and Rota, will provide “over $800 million in projected investment.”
“We must continue to work closely with the U.S. Department of Defense and all our federal partners to ensure that the projects are supported for swift completion and the planned investments materialize and benefit the CNMI as soon as possible,” he added.
