President Toribiong is considering taking out a loan from NDBP to pay the government obligations amounting to at least $10 million.
The rider however was removed from the bill by the OEK.Earlier the president said the Palau government has accumulated unpaid obligations of $10 million due to an overestimation of revenues collection. Toribiong 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.The president said the government is also trying to secure loans from commercial banks in Palau, but because of the economic crisis, most are reluctant to do so.He added commercial banks and financial institutions also collect high interest rates.“If the republic is to have any chance of paying those accumulated debts in a timely fashion, the NDBP will need to be authorized to loan money to the republic,” he noted.The president in his transmittal letter when he signed the budget said that the country’s revenues are in a downward spiral and will stay that way in the near future.He said he will be forced to reduce the cost and size of the government.He said mandatory retirement and hiring freeze will be the answer to downsizing the government.“It was a result of a budget greater that the actual revenues,” Toribiong said. “If the income projections on which the FY2010 budget is based do not materialize, then I will have to take every action necessary within my Constitutional Authority to assure that the essential government services continue to be provided to our people. This may require sacrifices by our government including a reduction of certain services and personnel,” He said.He once again urged the lawmakers to consider several measures to enhance and improve the economy by attracting new business and creating new jobs.He said this way the need to downsize the government will be avoided.
