The Palau national government avoided a shutdown with the signing of the Fiscal Year 2025 Unified Budget Act on 30 September 2024, just hours before the end of the fiscal year.
The budget allocates US$134 million in total authorisations, with US$131.8 million appropriated for the general operations, special revenues, and debt service for the fiscal year ending 30 September 2025.
The Executive Branch will receive US$58.8 million, while the Legislative Branch is allocated US$8.3 million. The Judicial Branch is authorised US$4.5 million, with US$4 million appropriated. Additional allocations include US$1.9 million for Boards and Commissions, US$13.1 million in State Block Grants, and US$5.6 million for other agencies. Education support includes US$7 million for Palau Community College, private schools, and the National Scholarship Fund.
To address national debt obligations, US$9.5 million has been set aside, covering loans from the Asian Development Bank (ADB), Industrial and Commercial Bank of China (ICBC), housing development loans, and the Palau Housing ICBC loan. Of this amount, US$7 million will come from the 2023 Compact Review Agreement, with the remainder sourced from local revenues.
The budget also includes US$2.9 million to subsidise services provided by the Palau Public Utilities Corporation, such as the Automatic Fuel Price Adjustment Clause, water and wastewater services, and the Lifeline Subsidy Programme.
Continuing its commitment to social support, the government has allocated US$2 million to fund the Supplemental Social Security Administration (SSA) benefit payments.
A new item in the budget is a US$3 million allocation for the purchase of a medical house in Hawaii, as an alternative use of funds initially intended for the Civil Service Pension Plan. The government anticipates a US$20 million grant from the U.S to support the Pension Plan.
Additionally, the FY 2025 budget provides US$1.4 million for the Pacific Mini Games, set to take place in Palau from June to July 2025, and another US$1.4 million for continued social assistance payments of US$480 to retired and disabled citizens.
New appropriations include US$100,000 for the inauguration of the new government in 2025. The budget bill also includes non-budget-related amendments, notably the revision of 34 PNC Section 3106, which now defines fentanyl and other opiate derivatives as controlled substances and establishes stricter penalties for their misuse.