President of the Republic of Palau July 22, 2026 | Ngerulmud, Republic of Palau Ungil ieta sils. A uchei er a domuchel, e ng kmal di soak el mereng a sulel a Dios el ngii a cheueteled me kede selbechakl e dmak el ngar tiang er chelechal sils. We are blessed to be a sovereign democratic nation, to have our freedom, and to have beautiful and bountiful A kumtechei er kid e odars a sus er kid el mora Kuoll el Ibedul me a Reklai, me a Rubekul Belau, Kuoll el Bilung me a Ebil Reklai me a re Mechesil Belau. Senate President Hokkons Baules and members of the Senate, Speaker Gibson Kanai and members of the Hou se of Delegates, Chief Justice Oldiais Ngiraikelau and all Justices, Vice President Raynold Oilouch and members of the Cabinet, Governors and Speakers and state legislators from across our Republic. Alii to all Palauans, and most importantly our children, from Kayangel to Hocharihie, and those abroad. Good afternoon Ambassador Toby Sharpe, Australia; Ambassador Andy Kang -I Chen, Republic of China -Taiwan; Ambassador Kenichi Kasahara of Japan; Chargé d'affaires Shankar Rao, United States; members of the Diplomatic Corps; distinguished guests. Thank you all for joining us today. Before we begin, I want to thank you all for your patience and understanding. We had to reschedule this State of the Republic Address, which was originally supposed to be held in April. On behalf of my family, I share our sincere appreciation to everyone who offered words of comfort after my dad's passing. It is through his example of leadership, and his love of Palau, that we have been able to place “Palauan People First.” A Kot a Rechad er Belau. This concept is simple: the work of government is to provide the services that help our people — our children, our workers, and our When I stood here to deliver my first State of the Republic Address in 2021, Palau was a nation under strain. And it seemed there was little opportunity to be had, considering the situation we were in. Our children were being left behind — schools deteriorating, teachers without equipment, test scores falling. Illegal drugs were a growing threat, our prison sat unfinished, and our borders were Our infrastructure was failing us. An aging hospital had no replacement plan. Our sewer system was incomplete. Our utilities agency was underfunded, and we were saddled with solar, airport, and telecommunications debt agreements — though we did act to stop our telecom agency from taking on even more debt to update And our economy was in crisis. COVID -19 had exposed how narrow it truly was — almost entirely dependent on tourism, which had collapsed. Our fiscal position was failing. Our minimum wage could not keep up with the cost of living. We inherited a Compact Agreement that fell short of putting Palau's people first, a crumbling port, and an unpaved airport in Peleliu. We were forced to take on more debt just to keep health, education, and safety services From that difficult starting point, we made a choice, together: discipline over denial, reform over delay, and people over politics. Today, we want to talk about how, step by step, we have begun to turn that crisis into a new foundation — and how much more we still But before I turn to policy, I want us to remember a moment when we saw the true strength of our people in action: the heart of champions that carried us through the 2025 Pacific Mini Games. Many of us still remember the night Sydney Francisco lit the fire of the 2025 Pacific Mini Games — and the athletes lit a different fire in our hearts. Rain poured. Anyone out in the open was drenched. But the athletes marched anyway. Why? Because they wer en't thinking of themselves. They were thinking of their people, determined to bring honor to their countries. Who can forget the electric roar at the ballpark when our national baseball team secured gold? Our young men proved on the diamond that when we support our youth, Palau stands second to none. We saw that same heart in our 3x3 basketball team, who reminded us that heart matters more than height. We saw it in the raw power of our paddlers, and the grit of our wrestlers. We hosted the largest Pacific Mini Games in our history — more than 2,000 athletes. None of it happened alone. We thank the organizing committee and our partners: the United States for school upgrades; Taiwan for school and sports facility improvements and baseball training; Japan for power upgrades, coaching support, and school renovations; and Australia for security support. The OEK approved the funding to feed and care for our athletes. This was Tonight, we join the closing ceremony of this year's Belau Games to celebrate our athletes' success. We’ve seen what’s possible when we work together. That’s exactly why this year's legislative and budget delays — the failure to compromise for the greater good — put the spirit of the Belau Games at risk. Our children deserve better. Investing in Our Children: Ke de meleketek er a rengeleked el mo klisichel a beluad Our commitment to put Palauan people first begins with our children. And the first thing our children see every morning is not a policy or a test score — it is the classroom they walk into and the court or field where they play. Together with our partners, more than $130 million has been invested in capital projects since 2020 — new and renovated school buildings, cooler classrooms, safer roofs, and better gyms and fields, along with roads, health facilities, sports infrastructure , and public buildings across Palau. A large share has gone into schools and sports facilities, because that is where the future of Palau is shaped. Buildings alone are not enough. Inside those classrooms, we have been changing how learning happens. This year we begin the use of on-line reading programs to help increase reading and the results are promising. We believe that the return of the Peace Corp s program, which is providing more than a dozen volunteer teachers, will help The standardized Iowa test assessments show our students in comparison to U.S students. A 50th percentile rank would be average for the U.S. Since 2021, the averages have moved from the 20th percentile to around the 40th percentile for the same cohorts over time, and our youngest learners are leading the way: this year, first and second graders — many of them Kindergarten graduates — are averaging in the 54th and 48th percentile, well above where our students tested before Kindergarten was available to them. That means our children are catching up with, and in some cases surpassing, their peers in the U.S. At the heart of all this progress are our teachers. In recent years, far more of our teachers have earned real credentials: the share holding an Associate's degree or higher has grown from 61% in 2020 to 80% in 2025 — including 20 teachers who earned bache lor's degrees in special education from the University of Guam. In that same period, the number of teachers with only a high school diploma has fallen from 86 to 39. Better -prepared teachers mean stronger instruction in every classroom, in every state. We have made especially important progress in special education. In 2021, the Ministry of Education was at risk of losing about $1 million in special education funding because we were not in compliance. We now meet federal requirements and, more importantly, more students with disabilities are graduating and none To our young people, I want to say: all of this — new classrooms, repaired gyms, breakfast programs, AP courses, and scholarships — is for you. But it is not a gift to be taken for granted. Use these opportunities. Study hard. Take the advanced classes. Join the sports teams and clubs. When you graduate, higher education and technical training are more within reach than before because of the partnerships and scholarships we have built. Whatever path you choose, promise me this: help the next generation after you. Be the doctors, carpenters, engineers, business owners, teachers, school bus drivers, police officers, and pastors our country will need. That is how we keep building Palau — one generation lifting the next, so that our children truly become the strong foundation of our nation. Ensuring Our Security and Safety: Oterkeklel a tekoi er a klekerngel ma sebecheklel a beluu ma Putting Palauan people first also means keeping our communities safe — from drugs, crime, and other threats that try to creep across Methamphetamine and other illegal drugs tear apart families, corrupt institutions, and steal the future of our youth. In recent years, we have strengthened investigations, prosecutions, and border controls. Police and customs officers have intercepted subs tantial quantities of methamphetamine, and our courts have imposed higher fines on offenders. The numbers tell the story. Earlier this year, we declared 2026 the Year to "Just Say No" to Illegal Drugs. A national working group is leading a whole -of- community response that includes police and prosecutors, but also parents, churches, schools, traditional leaders, and state governments. Our goal is not only to intercept drugs at the border, but to make them unwelcome in our homes, schools, and villages. Just last week in partnership with Taiwan we awarded 31 small grants to civil society organizations to implement community programs to promote drug free lifestyles and to help those who are struggling with substance use disorder. In January 2025, we submitted comprehensive legislation to strengthen drug testing requirements for law enforcement officers, enhance penalties for drug offenses, and create a special fund for drug rehabilitation. Public trust depends on knowing that those who enforce the law also follow it, and public safety depends on both accountability and healing. After debate between the houses, the OEK passed this bill, and it is now the law of the land — I thank the OEK for coming together on this issue, especially for including the With this new law, we have adopted a zero -tolerance policy: designated government employees who test positive for drugs will be terminated. But even as we make penalties stricter, we must never give up on those struggling with addiction — when offenders ar e sentenced, we are also providing counseling and support so they can return to society and contribute to our nation. The opening of our new national prison will allow us to expand rehabilitation services and better prepare offenders to successfully reenter society. Further, law enforcement has already received 1,200 new drug test kits and international training, and we continue building the capacity to We must also confront a substance that is legal but no less damaging: alcohol, whose abuse fuels violence, breaks families, and causes long-term harm to our people. We will introduce legislation to strengthen the licensing of alcohol vendors and support mo re Nicotine is among the most addictive psychoactive substances in the world with addiction comparable to heroin and cocaine. It is the principal addiction agent in tobacco and nicotine products. Nicotine addiction rather than tobacco alone is the substance t hat hooks children and adults into life long addiction, diseases and premature deaths. Last month we notified the UN Secretary General in writing to review the Nicotine molecule for scheduling as a psychotropic Security is about more than preventing our people from using addictive substances. It also means knowing who enters our country. We have also signed an executive order requiring individuals from certain high-risk countries to obtain visas before arrival — a targeted measure that strengthens our borders while keeping the process simple for legitimate travelers and investors. To address broader criminal threats, we have introduced proposals to raise penalties for undeclared cash entering the Republic, close loopholes in fraud laws, and strengthen our legal framework on terrorism and weapons proliferation. The Office of the Nati onal Security Coordinator, established by executive order, has already proven effective in coordinating intelligence and rooting out criminal activity, and it is time to make that office permanent in law. The Attorney General, together with representatives from law enforcement, customs, labor, and immigration, chairs the interagency body responsible for reviewing whether foreign nationals should be denied entry into the Republic. Through this coordinated review process, more than 600 foreign nationals have been denied re-entry into Palau. As expectations from our partners grow, we must also give law enforcement the tools to act on information received through INTERPOL and other international channels, so Pal au remains a safe and trusted member of the Security on land must be matched by security at sea. In partnership with international friends, we are deploying vessel tracking systems and modern surveillance to strengthen maritime safety and fisheries enforcement, so our people are safer when they trav el and our resources are better protected. When we talk about security and safety, we are not just talking about laws and facilities. We are talking about the right of every child to walk to school without fear, every parent to know their child will return home safe, and every community to live wit hout the shadow Protecting Our Livelihoods – Sebecheklel a ungil kerruul el kirir a rechad er Belau Protecting our livelihoods means making sure that the way we manage our land and ocean truly serves our people — today and for generations to come. It means that families can afford healthy food, that fish stocks are plentiful, and that farmers and fishers can earn a In our Exclusive Economic Zone, we are taking responsibility for policies that had unintended consequences for our people. Good governance means making decisions based on facts and data, not what we think or feel is right — and certainly not arbitrary numbers. When the Palau National Marine Sanctuary took full effect in 2020, it set aside 80% of our EEZ as a no -take zone — a figure chosen more for its symbolism than for any assessment of what Palau's own fishery could actually sustain. Six years of data now pain t a stark picture of what that arbitrary line has cost us. A new study was released this month by the Ocean Nexus Research Team sponsored by the Nippon Foundation. The study was based on official catch data from the Western and Central Pacific Fisheries Commission, and confirms what our fishers have been telling us for Our EEZ tuna catch has collapsed by roughly 94%, from about 18,100 tonnes at its peak in 2017 to an average of just 1,056 tons a year since. Tuna reaching Palauan homes and restaurants has fallen even further — down 87%, from 230 tons a year before the Sanctuary to just 30 tons a year since, according to the research. That collapse didn't just empty our plates — it emptied our docks. As the catch disappeared, so did the boats and the businesses built around them: our longline license revenue fell 92%, and the number of licensed longline vessels dropped from 75 to just 5. With less tuna available and fewer boats fishing it, prices rose, and within months, families and fishers were documented turning back to our reefs to make up the difference — adding pressure to reef stocks that scientists tell us are already declining. The PNMS must be rightsized based on data and science, which indicates that the most important area to be protected is 50nm around our reefs which equates to roughly 30% of our EEZ. And moving to This is what balancing protection with production looks like: decisions grounded in science and data that ensures Palauans — not other markets — benefit from our sacrifice. We have sent this reform package to the Olbiil Era Kelulau, and we are asking for Alongside this, we are strengthening our food security through agriculture and aquaculture, led by the Ministry of Agriculture, In 2025 alone, MAFE supported dozens of farmers with tilling services, farm equipment rentals, and technical assistance, and provided table-top gardens to state farms and schools. Nearly 90,000 taro seedlings were distributed to boost local staple producti on and reduce our dependence on imported food. In our lagoons and coastal waters, MAFE and its partners produced and distributed sea cucumbers, giant clams, rabbitfish, and milkfish to restock depleted areas and support community-based aquaculture, with students and communities helping. These efforts a re part of a strategy to make sure more of the fish and food on our tables is produced here at home, by Palauan hands. Protecting livelihoods includes helping families afford homes. In April, we signed a $15 million loan agreement with the Saudi Fund for Development at a low fixed interest rate, with the full amount dedicated to the National Development Bank of Palau. Over the past two years, the bank has already reduced interest rate s that were once as high as 10%, saving Palauan borrowers hundreds of thousands of dollars each year. This new source of low -cost capital will help more families access home loans and build equity. We must build on this progress by securing additional concessional capital, including through the commemorative coins agreement now before the Senate, which would provide $1 million in funding and a yearly revenue stream of at least $80,000 per year. That agreement Through these steps — fisheries reform, agriculture and aquaculture, farmer support, and affordable housing — we are working to ensure that Palauan livelihoods are protected and that prosperity reaches every state. We also recently established the Office of Applied Technology and Strategy and we adopted Palau's first National Cybersecurity Strategy. And we are grateful to the OEK for helping us to establish Palau's new Bureau of Cybersecurity. Yesterday, July 21 2026, we signed into law RPPL 12-8. As we put more services online and connect more of the government digitally, we take on a greater responsibility to protect the information Palauans entrust to us — and this law gives us the authority to do that. I especially thank the OEK for pairing that authority with real funding to carry it out, because a well -written law means little without the people and tools to enforce it. I ask the OEK to keep that commitment strong in the years ahead, so th is Bureau has what it needs to keep our government's systems secure. And to bring government closer to the people, the Code Commission has launched a searchable online platform that includes our Constitution, laws, executive orders, court decisions, and regulations. This makes information more accessible, strengthens public trust, and lowers the cost of doing business. I also want to take a moment to congratulate the Olbiil Era Kelulau for launching their new website just last month. This gives our citizens a way to follow legislation as it moves through each step, so people can see how their laws are made. It's another step toward a more open and accountable government, and we're grateful for We talk about diversifying our economy beyond tourism. Our digital residency and shipping registry programs have grown from almost nothing a few years ago to millions of dollars in new revenue today. These are examples of how a small island nation can compete in the digital and maritime economy while still protecting our oceans and We also extend our appreciation to the OEK for its leadership and collaboration on the elite visa and aircraft registry bills, both of which represent important new avenues for economic diversification. The work that has been done to advance these measures has been substantial, and we are now within reach of bringing them across the finish line. Taking Care of our Health and Social Services — Smisiich a tekoi ra ulekereuil a bedenged ma ungil ukeruul, e mdois a techall ra ngeseu el merkid In the next few weeks, we expect to have selected a site for the new hospital, with support from the U.S. Trade and Development Agency and Architects Hawaii Ltd. Earlier this year, architects and engineers were assessing potential sites in Airai, Koror, and Ngatpang. Our goal is a modern facility that provides the emergency care, surgeries, and diagnostic services our people now travel overseas to receive — keeping more health- care dollars in Palau, and more families together during times of At Belau National Hospital and across the Ministry of Health and Human Services, we have been repairing buildings and equipment and restructuring how health care is governed. Over the past several years, we have invested millions of dollars in laboratory expansion, radiology upgrades, MRI and CT equipment, oxygen -plant improvements, roof and lighting repairs, a kitchen overhaul, and modern electronic medical record and inventory systems. That commitment to standing beside our elders extends beyond the hospital walls. In December, we opened the Transition Facility for patients discharged from the hospital with nowhere safe to go — elderly patients and people with disabilities who cannot sim ply We are also working to bring more services home. With new doctors on board, including a physician now serving full-time in Peleliu, and partnerships with Guam Cancer Care and The Medical City, we are preparing to expand oncology and specialty services here in Palau. The Ministry is working with the Health Care Fund to offer Executive Check -Ups at home, so more people can receive preventive care without costly travel abroad. At the same time, we are moving forward with the long -planned transition of Belau National Hospital from MHHS to an independent hospital authority, as established by law. Our goal is to complete the separation by the end of this year so the hospital can op erate with greater focus, accountability, and efficiency. I thank the OEK for its foresight in creating the authority, and I count on your continued support to see this reform through. For those diagnosed with cancer and other illnesses requiring specialty care in Hawaii, we purchased a house that ensures our family members have a clean and safe environment while they Strengthening Our Palauan Workforce — Smisichii a mo ungil chad er a ureor el sebechel Caring for our people also means we have a responsibility to act — not only for today's retirees, but for every younger worker paying into Social Security and Pension today and hoping to retire with I want to thank the workers over 60 who are still at their posts: nurses on the night shift, teachers in the classroom, postmasters, police officers, and many others. They kept working when times were hard, including during COVID, so services could continue and families could be supported. You are the backbone of our public service and our economy, and we honor your sacrifices. But we must also be honest. Our Social Security and Pension systems are unsustainable, carrying an unfunded liability of roughly $300 million. If we do nothing, the funds will become insolvent, and the promises we made to our elders and to younger workers will be broken. That is not acceptable in a nation that puts Palauan people The reforms we are advancing have three main elements: first, gradually raising the retirement age to 65. Second, adjusting length- of-service requirements and contribution rates so the funds stay solvent and fair across generations. Third, reviewing benefi t formulas to protect the most vulnerable while keeping the systems These are difficult choices, but avoiding them would be even more painful. By acting now, we can protect current retirees and ensure today's 30-, 40-, and 50-year-olds will still have Social Security and A Social Security bill was first introduced in 2022. Since then, we have consulted with the board, workers, and communities — including through the development symposium — to get the details right. Because Social Security and Pension reform must work in tandem, I will soon submit a new Social Security bill alongside a new Pension reform bill for the OEK to consider together. The main point is simple: we must have the courage to act now, so that when today's workers retire after decades of service, the promise we made to them is kept. When we invest in Belau National Hospital, expand social programs, and secure Social Security and Pension for the long term, we are doing more than fixing buildings or balancing accounts. We are living up to our covenant to take care of each other — to ensure that every Palauan, from birth to old age, can live with dignity, Economy – Putting Palauan People First When we took office in 2021, our economy was struggling. Tourism was at historic lows, fisheries revenues had fallen, our tax system was old and unfair, wages were stagnant, and debt was rising. In the face of the worst shock in our history, we chose disci pline over denial, reform over delay, and people over politics. Because of those choices, Palau is now seeing higher growth, higher revenues, and You can see this in our GDP. From the COVID low point in 2021, our economy has grown year after year to reach the highest level in our history, with GDP per person also rising to record levels. This is not just a rebound. It is the harvest of hard decision s we made together so our people could stand on more solid ground. Tourism is steadily recovering. Visitor arrivals fell to just a few thousand in 2021, but by 2025 and into 2026 we are again welcoming tens of thousands of visitors from Taiwan, Japan, USA, Europe, Australia and across our region. We are rebuilding tourism on a broader base, so no single market can make or break our future. We thank ROC -Taiwan for the Taipei flights and hope that Kaohsiung will follow soon. We appreciate Australia for the Brisbane flights and look forward to more in the future. We are grateful to Japan and our private sector for the Tokyo flights that were la unched last October and United Airline's commitment to growing Palau's market. Lastly, we are thankful for the additional flights from Manila that Philippine Airlines has launched. These are critical bridges in the sky building a resilient tourism industry. Thanks to tax reform, every visitor now contributes significantly to the services they use. As arrivals recover, tax revenues have grown faster and more consistently with the increase in visitor numbers. As government revenues have risen since 2021, together we kept spending disciplined. Each year we worked to ensure that our budget produced surpluses instead of deficits, so we could invest in reserves But even as our economy recovers and our people earn more, we are still carrying a heavy debt burden from COVID and earlier investments in our internet cables, power systems, sewer systems, housing, airport and other critical infrastructure. During the pandemic, when revenues collapsed, we had to borrow simply to keep health, education, and safety services running. As our economy has grown, our overall debt stock has declined as a percentage of GDP. We are making progress and need to continue The impact is most visible in our annual debt service. In 2021, we spent about 2.5% of the national budget on debt payments. By 2026, that share has climbed to nearly 13%. We are grateful for the U.S. support through the Compact to pay down debt. To safeguard our financial credibility, we need to ensure that required Compact audits are fully funded and that these funds do not lapse. We need to revisit rules that have slowed down the use of the Infrastructure Maintenance Fund, and to be cautious about changes that weaken PPUC ’s ability to deliver the services we require. Responsible finance is not about saying “no” for its own sake; it is about saying “yes” to the right priorities — those that truly put More recently, we worked with the United States to build a third country national program that together we designed to be a win-win- We have had three individuals come through this program, the first individual opted to leave Palau. The other two are interested in staying and working. We can see that it's working as it should. We are helping our American friends meet urgent needs. And it can help Palau address labor shortages in key sectors. The Working Group has been invaluable in guiding this process. A 2027 Budget That Puts Our People First On July 14, we submitted our proposed budget for Fiscal Year 2027 to the OEK. It reflects our commitment to the value of A Kot a Rechad er Belau. Our operational budget is $165.8 million that puts our people first. That is nearly 11% more than last year, and it is not growth for its own sake. It is growth aimed squarely at the priorities Health and education together account for $42. 1 million of this budget. The Ministry of Health and Human Services receives $19.5 million as we move forward with separating hospital operations from public health so that prevention, primary care, and hospital care are each governed the way they should be. The Ministry of Education receives $14.1 million, and we are backing that up with $8.5 million in Education Assistance for Palau Community College, the National Scholarship Fund, and our non-public schools. Public Safety receives $9.0 million through the Ministry of Justice, but the real story is in two targeted investments: a 25% increase for the Bureau of Public Safety to complete and open the new prison facility in Babeldaob, and a 16% increase for the Bureau of Customs and Border Protection to expand our drug -detection-dog program. These are not abstract line items. They are a safer Palau and a stricter border for the drugs that hurt our families. And because a nation's strength is measured in more than roads and buildings, this budget grows the Ministry of Agriculture, Fisheries and the Environment by 25%, to $3.3 million — protecting the fisheries, farms, and reefs our people depend on, at the very moment our EEZ tuna catch and local fish landings are under real strain. This budget also funds a 5% public sector wage increase. Keeping the promises we make to our nurses, our teachers, our police and our retirees costs money, and this budget puts that money on the table. It also appropriates $12.5 million to keep prepaying our highest - interest debt, so that next year, and the year after, even more of every dollar goes to our people instead of our creditors. This is a responsible budget. It is a generous budget. And that brings me to how we work together as a government. Most importantly, we are putting these resources back into our people. Today, more of every dollar in the budget goes to education, health, justice, subsidies, and support for our states than in 2021. This is what "Palauan People First" means in practice: your tax dollars fund your children's classrooms, your hospital, and your Over the past four years we have significantly expanded social programs that help families meet daily needs — electricity, water, childcare, and support for people with disabilities. We'll return to the numbers behind that growth when we look at the full p icture of To help offset the cost of essential services, the government subsidizes utility rates for the most vulnerable. Subsidies should be targeted, making it count for those who need it the most. Beyond utility subsidies, the government provides direct financial assistance to vulnerable populations through several programs. In 2025, 441 Palauans received support through the Palau Severely Disabled Assistance Fund, totaling $1.1 million. The Retired Citizens and Disabled Citizens Assistance program reached 2,390 Palauans, also totaling $1.1 million. The Child Raising Subsidy supported 1,705 Palauans with $610,800 in payments. Additionally, 36 Palauans received informal Makit social assistance totalin g Together, these four programs supported 4,572 Palauans with approximately $2.82 million in direct assistance in 2025. As we’ve tightened our belts and prioritized where our resources are to be spent, we’ve managed to earn some surplus, which has allowed us to rebuild our reserve funds. Our cyclical reserve is now rising again, and we have begun building a climate -resilience reserve so Palau can better withstand future shocks. Jobs and wages have followed the same upward path. Total employment has risen from under 10,000 workers in 2021 to more than 12,000 in 2025. Over the same period, total wages increased. That is more pay in the pockets of our people and more activity in Palauan wages alone have grown steadily, yet Palauan workers are now paying less in wage and salary taxes than before. Through tax reform and income -based refunds, thousands of Palauans earning under $30,000 a year have received refunds in 2024, 2025, and again this year. That is money going back into family budgets for food, As a share of total taxes paid on income , the burden on working Palauans has been reduced by half, from more than 60% to about 30% over the past few years. In other words, Palauans are earning more while carrying a smaller share of the tax burden. Moreover, that burden is now shared by non-Palauans, visitors, and businesses, who are now paying their fair share of taxes. We paired these changes with two minimum wage increases and three rounds of salary increases for national government employees. In the FY2027 budget, we are proposing another 5% salary increase for government employees and raising our nation’s minimum wage by 50 cents this year and again next year. So step by step we're moving up to a $6 national minimum wage. When we put money back in the hands of our people, we build a stronger, more resilient This is what Putting Palauan People First looks like in our economy. It means using our recovery and economic assistance from our partners to invest in managing debt, to invest in our children's classrooms, to invest in our workers' paychecks, and to invest in the social safety net that protects our most vulnerable. A stronger economy is not an end in itself. It has a purpose. And that is to give our people the dignity of work, the ability to care for their families, and the opportunity for our children to thrive here at home — in schools that are cool and safe, in communities that are healthy, and in a Palau where prosperity is shared by all Palauans, not None of what I have described today is something Palau does alone. Our recovery, our reforms, our future — all of it is built alongside friends who share our vision for what Palau can become. Today I To the United States: first, congratulations on 250 years of independence. It is a milestone worth celebrating, and I look forward to joining our American friends later today as we mark this historic anniversary together. Our partnership runs deep in the g round beneath us, too: after 80 years, we are finally rebuilding and expanding the Malakal Port, a generational investment in the port every Palauan family depends on. Beyond the port, Compact funding is building a new nine-classroom facility in Airai and renovating Palau High School and elementary schools across the country. The US is also helping with the Belau National Hospital. And this February in Honolulu, the U.S. government sat down with us and our Pacific neighbors to begin finding the financing to build it — because good plans need funding partners, and the United States is helping us find them. To Japan: our kizuna, our special bond, keeps growing stronger. Japan is rebuilding the Minatobashi Bridge — the only link connecting Malakal Island, home to our port, our power plant, and our fuel storage, to the rest of the country. This $12 million proj ect broke ground last year and will be complete by April 2027, so that vital link is never severed. Japan is also standing with us as we plan the Ngatpang fishing port, strengthening the fishing industry that has fed and employed Palauans for generations. And Japan is tackling one of our oldest infrastructure problems: more than half the water we treat in Koror and Airai never reaches a home, lost to aging pipes underground. Japan is investing roughly $17 million to replace that plumbing and install smart m eters, so the water we already pay to treat isn't wasted before it reaches our people. Japan continues to back our savings bond program too — both Palau Invest, our new digital savings platform, and the broader Palau Savings Bond, which will let Palauans invest in Palau's future instead of sen ding their To Australia: thank you for helping us move toward clean energy. Australia financed and built Palau's first utility -scale solar and battery plant, delivering nearly a fifth of our power without burning a drop of diesel. Australia is now investing further t o upgrade our grid, so we can push renewable power even higher. To Taiwan: for decades, our friendship has been built one project at a time, and today it touches nearly every part of daily life in Palau. Taiwan has funded 68% of the roads that connect our communities. Taiwan's technical mission supports our farmers, he lps provide healthy school lunches for children across our public schools, and its work at the Palau National Aquaculture Center and our giant clam conservation efforts is rebuilding the marine stocks our people depend on. And as we prepare to host the 55th Pacific Islands Forum Leaders Meeting, Taiwan is again extending its generous support. To all our partners — MESULANG and thank you. Palau does not do this work alone, and we are stronger, safer, and more prosperous Our work is not finished. In the months ahead, we are asking the OEK to act on a full legislative agenda. On the economy, we've talked today about the bills we'll be submitting on Social Security, Pension, the Building Code, the Tabsesul Labor Act, and the Hospital Transition. But there is also proposed legislation that would help generate new revenue for ● A Trademarks law, so businesses can register and protect ● Amendments to make the Elite Visa law operational ● A Tax Administration Act, modernizing how the Bureau of Revenue and Taxation operates — without changing tax We are also proposing an Electronic Transactions Act, so that digital records and signatures carry the same legal weight as paper ones — another piece of building a digital Palau. As part of the FY2027 budget, you've already heard about the minimum wage increase and the 5% government salary increase. Alongside that budget, we are asking the OEK to approve technical amendments to how the Cyclical Reserve Fund and Climate Resilience Fund operate, so these reserves can do their job when And on public safety, we've talked today about raising penalties for undeclared cash, closing loopholes in fraud law, strengthening our framework on terrorism and weapons proliferation, and making the Office of the National Security Coordinator permanent i n law. We are also submitting alcohol regulation reform to strengthen licensing and enforcement, and legislation to formally recognize INTERPOL red notices and allow prisoner transfers outside of Palau — so Palau remains a safe and trusted partner in the region. Beyond this legislative agenda, we also need the OEK to approve the fisheries and food-security reforms that balance ocean protection with our people's needs, and to keep managing our debt responsibly, so that more of every dollar can be invested in our people rather than Team Palau: Moving Forward & Upward Our ability to put Palauan people first does not depend only on policies and programs. It also depends on how we organize our government and how we conduct ourselves as leaders. We all need to do better. The people elected us because they trust us to govern responsibly, and we must live up to that trust. I believe in In just over a month, the eyes of the Pacific — and much of the world — turn to Palau as we host the 55th Pacific Islands Forum Leaders Meeting, only the third time in our history and the largest eminent regional gathering our nation has ever welcomed. Heads of state, dialogue partners, and international press will see the same roads, classrooms, and communities we have spent this address describing. This is Team Palau again — this time on the biggest stage we have ever built for ourselves. We have come a long way from where we started in 2021. We see it in the cool classrooms and school breakfasts, in the teachers with new degrees and the special education students who are now graduating instead of dropping out. We see it in the new flights to Australia and Japan, the rising GDP and revenues, the tax refunds and social assistance, the higher minimum wage and government salaries, the work to build a new school in Ngchesar and a new national hospital, and in the expanded social protections that support our elders and people with disabilities. Ng mla mo time. Lak e da luut el omerober ra kirel bekeredechel el klukuk ra rengeleked. Let us choose courage over fear. Let us choose unity over division. And let us continue, together, to make “A Kot a Rechad er Belau ” a living reality for every Palauan family and Mesulang. God bless you all, and God bless the Republic of Palau.