‘Businesses feeling effect of govt austerity’

Posted on Jun 03 2019

Saipan Chamber of Commerce president Velma Palacios said local businesses were already feeling the pinch of the government’s austerity measure even before Gov. Ralph DLG Torres issued a 72-hour work schedule.

“Austerity measures have been in effect for the CNMI government for months and the business community has been impacted. I have spoken to some business owners and they have indicated their sales are low,” Palacios told Saipan Tribune in an email.

She, however, did not provide immediate data from the businesses that had experienced a drop in their sales and revenue.

The government’s reduced working hours will further impact the local business community, Palacios said.

“Employees will be spending less. They would have to manage their household budgets to make ends meet. We hope our tourist arrivals will continue to increase to help our economy,” she added.

The Hotel Association of the Northern Mariana Islands president Gloria Cavanagh is not fazed. She told Saipan Tribune last week that several hotels have already been implementing austerity measures, soon after Super Typhoon Yutu hit the CNMI, in order to secure their fiscal health.

Cavanagh added the CNMI had experienced this before. “However, we may be in a better position since the last round of government austerity measures. I believe the key is to work on bringing back the tourism numbers in order to bring back health to our economy.”

Local businesses like restaurants and other shops will be the first to feel the shrinking purchasing power of government employees under the Executive Branch.

The work hour cut is just the latest of a series of various belt-tightening measures that the Torres administration had imposed since the devastation of Super Typhoon Yutu in October last year. The widespread damage closed down the Francisco C. Ada/Saipan International Airport for weeks, resulting in revenue projections in the first two quarters of the 2019 fiscal year plummeting due to the large drop in tourism numbers.

Under the new work hour cuts, Torres reduced the operations of offices under the Executive Branch, starting with the pay period on June 23. Agencies will be closed every payday Friday beginning on July 5 until further notice.”

The Legislature also experienced reduction with their monthly allotments while the Judiciary’s budget was reduced by almost 50 percent, based on Torres’ proposal submitted to the House Ways and Means Committee. The government also froze all salary increases and hiring of additional personnel.

Jon Perez | Reporter
Jon Perez began his writing career as a sports reporter in the Philippines where he has covered local and international events. He became a news writer when he joined media network ABS-CBN. He joined the weekly DAWN, University of the East’s student newspaper, while in college.
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