The CNMI economy continues to climb from many years of slump based on the 2015 data compiled by U.S. Bureau of Economic Analysis released yesterday.
The Commonwealth’s economy increased by 0.7 percent, from 2.8 percent in 2014 to 3.5 percent in 2015, the same year when Saipan bore the brunt of Typhoon Soudelor’s tornado-like winds.
This would be the fourth straight year that the CNMI’s gross domestic product increased following years of being at the negative level, including a negative 17.5 percent economic activity in 2009, the lowest for the Commonwealth.
Totaling consumer spending, investments, government spending minus taxes, and the value of exports minus the imports is how GDP is calculated. The administration of Gov. Ralph DLG. Torres credited the bureau’s report to the total amount of investments poured in the CNMI, the new gaming industry, and an increase in tourism activity based on the growing number of air carriers flying to Saipan.
Torres, in a statement after meeting bureau representatives yesterday at the Office of the Governor on Capital Hill, said the CNMI’s economy showed it was not adversely affected by the Internet outage in July last year and the devastation brought by Typhoon Soudelor the following month.
There was a slight increase in consumer spending and an increase in territorial spending following the strongest storm that hit Saipan in years, using funds provided by the Federal Emergency Management Agency and the CNMI’s recovery efforts.
“To put this all into perspective, 2009 saw the lowest GDP for the CNMI. It wasn’t too long ago that we were in the midst of a deep and persistent economic depression. Our tourism industry was struggling with low numbers of arrivals. Large and small businesses were also struggling,” said Torres.
A huge part of the CNMI population also struggled to make ends meet since the once thriving garment industry moved its operations to other countries to avail of cheap labor costs.
Torres said it is a different story right now. “Now, we see an economy in its fourth straight year of growth. Things now are not only different, but also better. Large businesses have regained their footing.”
“More small businesses are popping up. Unemployment has dropped. And there’s an increased feeling of financial security and inclusion within our community,” added Torres, who was joined by Lt. Gov. Victor B. Hocog, Commerce Secretary Mark O. Rabauliman, DOC Central Statistics Division director Justin Andrew, and Commerce IT manager Tom Torres at the Office if the Governor.
USBEA director Brien C. Moyer, economist Kevin J. Furlong, and chief program director Aya Hamano made the presentation to the CNMI panel.
Delegate Gregorio “Kilili” C. Sablan (Ind-MP) also praised the CNMI’s economic growth. “This is our fourth year of increased economic activity and I look forward to continuing the federal spending and immigration policies that are major contributors to this growth.”
Hocog, in an earlier interview, said the administration is optimistic once USBEA compiles and computes the data for the year. “I’m pretty sure that fiscal year 2016 would be an indicator of further increase. That’s why, with the administration and Legislature working together, we can achieve more and address the concerns of all sectors of our community,” said Hocog.
Rabauliman also sees continuous positive growth for the CNMI. “Seeing the continuous growth of our economy, as shown by our latest GDP report, is promising. We are very optimistic about our economy for the years to come.”
House Speaker Rafael Demapan (R-Saipan) said the CNMI’s economy would continue its rise, based on the activity from January to November this year. “Based on the information that’s coming in and what’s going on right now, it appears that our economy would continue to grow.”
“That’s why, we as legislators should come together and make sure to work on that success. The government depends on how the economy would perform in order to deliver basic services and fund its departments,” he added.
Rep. Angel Demapan (R-Saipan) said the economic impact of the gaming industry trickled down to the other businesses and the entire community. “It has a ripple effect. A lot of businesses are seeing positive economic gains. We see a lot of sales of goods and other services go up along with an increase of employment.”
The House Committee on Commerce and Tourism vice chair said a lot of people now have spending power. “There are more consumers that are spending. We will continue to see increases based on the business gross receipt taxes. We can expect higher revenues next year and the years to come.”
He added that tourist traffic would further increase and more taxes would be collected once the Imperial Pacific Resort opens next year. “Hotels are full and occupancy rates are high. And this has a trickle-down effect when more people travel here, more people would spend money.”
“We could expect to see revenues that we have not seen in a long time. And that’s very exciting. In turn, the government is in a better position to increase its services particularly in law enforcement, healthcare, education, and other critical services. Every time revenues go up, the government is always in the better position to take care of its people.”