<\/p>\n
THE CNMI\u2019s total public debt as of Sept. 30, 2021 amounted to $121.1 million, according to a report by the U.S. Government Accountability Office.<\/p>\n
This represented about 13% of the CNMI\u2019s gross domestic product \u2014 the lowest debt-to-GDP ratio among the territories reviewed.<\/p>\n
The report also noted that the figure reflects a 12% increase from $108.5 million in 2019. The central government was responsible for most of the CNMI\u2019s public debt. Of the government components, only the Commonwealth Ports Authority and the Public School System had outstanding debt as of fiscal year 2021.<\/p>\n
According to a GAO graph, the central government\u2019s debt amounted to $94 million (78%), CPA\u2019s debt was $26 million (21%), and PSS owed $1.2 million (1%) as of Sept. 30, 2021.<\/p>\n
More debt<\/strong><\/p>\n The report stated that the CNMI incurred more debt to cover its fiscal year 2025 pension contributions, and officials told GAO they are working to reestablish access to capital markets in order to issue bonds for the fiscal year 2026 pension payments. The CNMI reported a net pension liability of $440.8 million, or approximately 49% of GDP.<\/p>\n In November 2024, GAO noted that the Commonwealth obtained a $51 million bank loan to make required contributions that year and to pay off the balance on a previous pension loan.<\/p>\n Despite the CNMI\u2019s comparatively modest debt level, the report said the Commonwealth faces significant challenges to economic recovery and financial sustainability. Its tourism-dependent economy has limited prospects for near-term recovery, particularly due to the lingering impacts of the pandemic and its vulnerability to extreme weather events.<\/p>\n GAO also said ongoing financial pressures continue to deepen challenges in meeting obligations, including pensions and post-employment benefits.<\/p>\n Broader issues cited in the report include:<\/p>\n \u2013 High costs of importing goods and energy.<\/p>\n \u2013 An undiversified economy with limited job opportunities.<\/p>\n \u2013 Population decline due to outmigration.<\/p>\n \u2013 Delays in audited financial statements and data reliability concerns that weaken fiscal management and creditworthiness.<\/p>\n Economic conditions<\/strong><\/p>\n According to the report, the CNMI\u2019s GDP was approximately $1 billion in fiscal year 2022, a 14% increase from the previous year, when adjusted for inflation. However, real GDP decreased by an average of about 8% annually from fiscal years 2018 to 2022.<\/p>\n Super typhoon Yutu caused widespread devastation on Saipan and Tinian in October 2018 while the Covid-19 pandemic virtually shut down the tourism industry in March 2020.<\/p>\n Tourism \u2014 the main driver of the economy \u2014 has not returned to pre-2020 levels. The closures of hotels and casinos on Saipan have further dampened economic recovery and contributed to job losses.<\/p>\n Financial information<\/strong><\/p>\n The report noted that independent auditors have consistently raised concerns about the reliability of the CNMI\u2019s financial statements. For example, the CNMI has struggled to obtain clean audit opinions.<\/p>\n GAO said it shared the CNMI\u2019s financial statement data from fiscal years 2019 through 2021 as that was the most recent comprehensive data available on the territory\u2019s financial status as of June 1, 2025.<\/p>\n \u201cHowever, given the material and pervasive nature of the issues identified, the public debt, revenue, expense, and net pension liability, data included in our report could be significantly misstated,\u201d the report said.<\/p>\n \u2018Bad for business\u2019<\/strong><\/p>\n In an interview, Steve Jang, a longtime CNMI businessman, shared his reaction to the report, saying this level of debt \u201ccan shake trust in the government\u2019s ability to pay its vendors, deliver services, and respond to crises.\u201d<\/p>\n He believes the mounting public debt directly impacts public services, noting that debt servicing \u201cmight mean cuts to healthcare, education, or infrastructure projects, which affect both workforce quality and tourism appeal.\u201d<\/p>\n As for the business environment, Jang said the CNMI\u2019s public debt can affect business owners like him through potential tax hikes, delayed payments to contractors, and possible regulatory instability.<\/p>\n \u201cAll these,\u201d he said, \u201ccreate uncertainty \u2014 which is bad for business planning.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"THE CNMI\u2019s total public debt as of Sept. 30, 2021 amounted to $121.1 million, according to a report…\n","protected":false},"author":3,"featured_media":30976,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,26288,79,26287,10440,26289,1630,67,132,68],"class_list":{"0":"post-30975","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-cnmi","10":"tag-economy","11":"tag-gao","12":"tag-prospects","13":"tag-public-debt","14":"tag-report","15":"tag-united-states","16":"tag-unitedstates","17":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114780332690880219","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/30975","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=30975"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/30975\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/30976"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=30975"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=30975"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=30975"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}