MPLT loan talks start

With a law that now authorizes the CNMI government to secure a loan from the Marianas Public Land Trust, talks between MPLT and key officials of the Governor’s Office can now start on how much that loan amount would be and all other details of the proposed loan.

The loan is supposed to help relieve some of the financial hardships of the CNMI government after the devastation of Super Typhoon Yutu in October last year.

House Bill 21-44 is now known as Public Law 21-3 after acting governor Arnold I. Palacios signed it into law last Friday morning, signaling the start of talks on the terms and conditions of the five-year loan.

The loan according to P.L. 21-3 is for a maximum of $15 million.

House Speaker Blas Jonathan “BJ” Attao (R-Saipan), who authored and sponsored House Bill 21-44, said that the $15-million ceiling is 10% of the CNMI’s property value.

“…If we go beyond [$15 million], that would be a different type of calculation,” he said, adding that a higher loan ceiling would require a more extensive review and, in turn, a “more difficult way of receiving a loan.”

The new law also sets an interest ceiling of 7.5% for the loan, which Attao said is higher than normal.

It includes language that grants flexibility for the Torres administration, by adding, “extraordinary expenses incurred by extraordinary circumstances”, allowing the loan to fund recovery efforts or even other typhoons, if needed.

When asked, Attao noted that the Torres administration, the Office of the Attorney General, and MPLT will ultimately decide where this loan money will go to.

“This bill gets them on the table to negotiate stuff right now. Prior to [the bill’s enactment], [discussions] were pretty much what was more feasible for MPLT and what was more feasible for the government,” Attao said.

In a statement from the Torres administration last Friday, Gov. Ralph DLG Torres pledged the proper use of the funds for “recovery related costs,” which includes payments to vendors.

“This, in turn, will also put money into our economy and, overall, will assist in the improvement of our current financial state,” Torres stated in the statement.

“As we all are aware, Super Typhoon Yutu has greatly affected our revenue streams these past couple of months. This loan was necessary in order to address the many recovery expenses our government paid upfront that allowed us to expedite our recovery efforts. We have and will continue to look for solutions that best suit the needs of our community and the sustainability and growth of our economy,” Torres added in the statement.

According to Attao, vendors that do business with the government are still waiting to be paid for services rendered in the aftermath of Super Typhoon Yutu last October 2018. This has reportedly affected the vendor’s capacity to pay their annual business gross revenue tax and further restricting the government’s resources.