KOROR (Palau Horizon) — President Tommy Remengesau says it is not practical to touch the earnings of the Compact of Free Association investments, due to the impact of the Sept. 11 terrorist attacks on America.
This is why the government wants to determine if Palau can use security bonds for its projects, he added.
At present, the government is not withdrawing money from the Compact investments, he said.
“Since the investment is highly dependent on the stock market, we want the earnings to grow more,” he said.
Though the investments in the United States are “quite performing well,” Remengesau said “it is still not wise to take it.”
As of Feb. 5, Palau’s investments on the U.S. stock market had reached $144 million, down by 2 percent from December’s $147 million which was the peak since the terror attacks.
In September, Palau’s investment plunged to $135 million from $141.9 million in August.
However, it soon gained 3.4 percent or $139.6 million.
Earlier, the Bureau of National Treasury asked the national legislature to allow them to withdraw around $2.7 million from the Compact funds in order to cover the projected expenses for March.
The government clarified that the request was not for a supplemental budget but was needed to balance the country’s budget.
The bureau also scheduled a $32.1 million cash drawdown from April to September this year, the bulk of which will be used for general operations.
But the agency noted that monthly drawdowns for several sections of the Compact money may change according to the progress of the projects.
So far, the bureau had already withdrawn around $12 million for this fiscal year, leaving a balance of $36 million as of Feb. 28.
