CNMI businesses earn less in 1Q

The business gross revenue of the Northern Marianas went down by 4.8 percent in the first quarter of fiscal year 2004—an estimated $23.2 million less than gross receipts received in the first quarter of 2003.

The CNMI Quarterly Economic Indicator Report released by the Department of Commerce noted that from $519.8 million in October-December 2003, gross revenue of businesses in the CNMI went down to $494.6 million during the same period in fiscal year 2004.

The report, however, noted that the first quarter BGR collected $84 million more than the last quarter collection of FY 2003 (July-Sept. 2003), which only amounted to $410.6 million. This is an increase of 20.4 percent.

Based on the economic indicator report, in the last four years, the CNMI business gross revenue had been spiraling down continuously from a high of $2.25 billion in 2000. Sales and receipts collected in 2001 only reached $2.11 billion or 6 percent less than the previous year. The amount further went down to $1.86 billion in 2002—an 11.7 percent decline compared with the $2.17 billion in 2001.

In 2003, BGR rose slightly by 2.4 percent, with records showing $1.91 billion in receipts collection for the year.

This slide in the gross revenue of businesses has had a direct impact on government revenue which also showed a continued decrease in the last four years. This comes even as records show that the government’s operating costs continue to increase. Of the numbers, only remittances remain stable in the last five years.

Based on a Department of Commerce report in 2003, the BGR increased by 1.89 percent from $2.213 billion in 1999 to $2.255 billion in 2000. A year later, however, business receipts and sales dropped by 6.11 percent to $2.117 billion (2001). By 2002, sales and receipts revenue went down by another 6.9 percent to $196.9 billion and continued to drop by another 2.7 percent in 2003 to $191.4 billion.

As CNMI’s BGR spiraled down, the CNMI revenue sources declined with it. From $241 million revenue in 1999, collections in 2000 went down by 8 percent to $230.2 million. In 2001, revenue collections continued to slip by another 3 percent to $222.6 million. By 2002, government revenue was at $187.86 million—a 15-percent decrease from the figure posted in 2001. Government managed to put a brake on the slide in 2003, when collection increased by 11 percent, shooting up to $210.3 million.

The Commerce report noted, however, that despite decreases in revenue collections and BGRT, government continued to incur additional expenses during the five-year period under review.

From a $220.3-million expenditure in 1999, the government recorded a .5-percent increase in 2000 or $1.3 million more money disbursed during the 12-month operation.

In 2001, the CNMI government posted an additional $900,000 in expenses, with operating costs increasing by another .4 percent from the $221.6 million incurred in 2000 to $222.5 million expended in 2001.

Operational costs briefly went down in 2002 when the CNMI government recorded only $210.7 million expenses—a 5.3-percent decrease from the 2001’s operating expenses. Expenditures, however, shot up by 1.5 percent to $213.9 million in 2003.

The Commerce report noted that since 1999, remittances have remained strong. From $65.1 million in 1999, remittances abroad climbed to $73.3 million the following year. The money sent out of the CNMI steadily climbed in 2001, when Commerce recorded $76.7 million in remittances in 2001. By 2002, remittances hit the $80.1 million record and continued with $81.4 million in 2003.

For the first quarter of 2004, Commerce reported that remittances or money sent out of the CNMI totaled $21.8 million, at least $1.3 million more than the remittances sent out in 2003’s first quarter, which totaled $20.4 million.

Records obtained from the Banking and Insurance Division of the Commerce Department showed that the growth in money transfer activities—by 6.8 percent—during the first three months of 2004 was spurred by the increase in the dollar remittances of Chinese workers.

Also, the report noted that for the first seven months of fiscal year 2004, the CNMI government expended $126.8 million for operational costs, exceeding revenues that only totaled $117.9 million.