Toribiong said the combined salary reductions ranging from $20,000 to $30,000 will be enough to prevent layoffs and shorter work-hours.
In an earlier interview, Vice President and Finance Minister Kerai Mariur said layoffs and work-hour reduction could trickle down to the government vendors.
Mariur said the government has already made “severe” spending cuts to ensure that it will stay within the budget.
The government owes money to vendors and as a result, the private sector is also suffering, he added.
The government has unpaid obligations of at least $10 million.
Mariur said Palau needs new money to stimulate its economy.
Meanwhile, in order not to accumulate further debts, the government may stop issuing purchase orders, he added.
