President Johnson Toribiong in a press conference said because the government in prior years has calculated incoming revenues too high it has resulted into debts that have built up within four to five years.
“It was a result of a budget greater that the actual revenues,” Toribiong said.He said that the Finance Ministry is working on the retirement of these debts.The president said the government is living within its means and has reduced spending during the 2009 Fiscal Year.He added that the FY2010 budget was drafted in anticipation that effective Oct. 1, 2009, the funding received by Palau from the United States under the Compact of Free Association will cease.By Oct. 1, the republic will only be able to draw down $15 million from the Compact Trust Fund.Toribiong said once the U.S. Congress passes the funding for the Compact extension he will work with OEK to amend the bill or submit a supplemental budget.