CNMI BUSINESS REVENUES DOWN BY $110 MILLION

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By Haidee V. Eugenio Variety News Staff

SAIPAN, Northern Mariana Islands (September 12, 2002 – Marianas Variety)---As local economic conditions continue to worsen, the CNMI’s business gross revenues sharply dropped by 20 percent or $110.4 million during the second quarter of calendar year 2002 compared to the same period last year, the Variety learned yesterday.

These latest estimated figures, according to the Department of Finance, are based on business gross revenue taxes and other income tax collections.

Robert Schrack, special assistant to Finance Secretary Frank Villanueva, said the April to June 2002 estimated figures were pegged at only $441.6 million -- hitting an all-time low in recent years.

This is a big drop from the $552 million in gross revenues reported during the same quarter in 2001.

"Part of the decline is the drop in garment industry output, and the substantial amount of potential rebates approved for the year," said Schrack.

Business gross revenues or the total business sales provide an indicator of business and economic activities. It offers a useful guide in assessing an economy’s performance.

Businesses sales have been on a steady decline in the CNMI since the Asian economic crisis in late 1997, and were aggravated by the Sept. 11, 2001 terrorist attacks in the U.S.

Right after last year’s tragedy, the business gross revenues dropped to only $454 million during the Oct. to Dec. 2001 period, as compared to $564 million posted during the same months in 2000.

The figure continued to drop to $442 million during the first quarter of CY 2002, and to $441.6 million in the second quarter.

These latest data will be included in the Department of Commerce’s CNMI Quarterly Economic Indicators Report.

Efrain Camacho, president of EFC Engineers & Architects and former president of the Saipan Chamber of Commerce, said the CNMI’s economy will further worsen before it gets better.

"We haven’t seen the bottom yet, and that’s more frightening," he said.

Camacho, however, said that the private sector has gone too far in cushioning the impact of the economic crisis, including reduction in work hours, lay-offs or streamlining of operations.

On an annual basis, the CNMI business gross revenues have been declining since at least 1997.

In 1997, the total business gross revenues reached $2.610 billion. It dropped to $2.238 billion in 1998 and to $2.213 billion in 1999.

It slightly went up to $2.255 billion in 2000, but dropped again to $2.117 billion by the end of 2001.

For additional reports from the Marianas Variety, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/ Marianas Variety.

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