Overview:
Palau has drawn $45.8 million in Compact Review Agreement and Compact Trust Fund funding through the first three quarters of fiscal year 2026, with compact-related funds accounting for about 32% of the government's annual budget.
By: L.N. Reklai
KOROR, Palau (August 10, 2026) — Palau has drawn $45.8 million in funding from the Compact Review Agreement and Compact Trust Fund during the first three quarters of fiscal year 2026, according to the Ministry of Finance’s quarterly report to the Olbiil Era Kelulau.
The amount represents about 81.5% of the $56.2 million allocated for the fiscal year.
Of the $45.8 million drawn so far, $10 million is designated for debt consolidation, while $20.8 million represents annual grant assistance appropriated for the Ministry of Education and the Ministry of Health and Human Services.
Another $15 million was drawn under Section 211(f) of the Compact of Free Association.
The Compact Review Agreement and Compact Trust Fund funds account for about 32% of Palau’s total annual budget for fiscal year 2026, according to the report.
In addition to the CRA and Compact Trust Fund funding, Palau has received or been allocated about $270 million in U.S. federal grants. These funds include $127.8 million for the Peleliu Lands for Defense Site, $20 million for the CSPP Reform Program, $15 million for the Mobile Network Upgrade Program and $7.5 million for Detainee Relocation, among other federal programs.
It should be noted that the $270 million figure includes programs that have been ongoing for several years and are not necessarily specific to fiscal year 2026.
The figures highlight the significant role of U.S. compact and federal assistance in Palau’s government finances, with compact-related funds supporting debt management, education, health services and other government needs.