GREAT BAY--The Financial Supervision Board (Cft) has acknowledged the Government of St. Maarten's efforts to improve its budget preparation process, noting that the country is on track to adopt its 2027 budget within the required timeframe. While the supervisory body identified several areas requiring further attention in its assessment of the approved 2026 budget, it also recognized the government's efforts to break the longstanding cycle of delayed budget approvals and encouraged continued progress toward stronger financial management.
In an advisory letter dated October 8, 2026, addressed to Minister of Finance Marinka Gumbs, the Cft reviewed the country's approved 2026 budget, which was received on September 24. Although the submission came after the statutory deadline of December 15, 2025, the supervisory body acknowledged that steps are being taken to improve the process for the upcoming financial year. The Cft noted that the 2027 budget preparation process is progressing according to schedule, an important development given the challenges St. Maarten has experienced over the years in securing timely budget approvals.
The Cft emphasized that the progress being made should be accompanied by continued improvements in the quality and supporting documentation of the budget. It noted that several recommendations previously issued concerning the 2026 draft budget had not been sufficiently addressed, making it difficult to fully assess the reliability of certain financial projections. The supervisory body therefore encouraged the government to use the ongoing 2027 budget process to strengthen the explanations, financial planning and supporting information accompanying its budget proposals.
According to the approved 2026 budget, St. Maarten projects revenue of XCG 647 million against expenditure of XCG 637 million, resulting in an anticipated surplus of XCG 10 million on the ordinary budget. Government also projects annual surpluses for the period 2027 through 2029, reflecting its intention to maintain a positive balance between regular revenue and expenditure. The Cft acknowledged these projections but indicated that additional financial risks, particularly those associated with healthcare expenditure and government-owned entities, must be adequately considered when assessing the sustainability of the country's financial position.
One area requiring additional clarification involves the government's proposed borrowing of approximately XCG 42.1 million to finance investments during 2026. The approved budget provides for XCG 165 million in total capital investments, including new projects and investments carried forward from previous years. The Cft noted that the supporting documentation does not yet provide sufficient clarity on how the various investment amounts relate to one another or on the implementation schedules for the proposed projects. As a result, the supervisory body indicated that it could not issue positive advice on the borrowing request at this stage. It also observed that the limited time remaining in the 2026 financial year would make it challenging to execute additional investments before year-end.
The Cft stressed the importance of establishing realistic multiyear investment plans that clearly identify proposed projects, their estimated costs and anticipated implementation periods. Such planning would allow for a more accurate assessment of the government's financing requirements and provide greater clarity regarding the investments that can reasonably be undertaken in each financial year. The supervisory body indicated that these considerations should form part of the ongoing preparation of the 2027 budget, allowing government to better align its development priorities with available financial resources and implementation capacity.
The country's liquidity position was another area identified for continued attention. Government's approved budget projects approximately XCG 5 million in freely available cash reserves at the end of 2026. While the Cft acknowledged that the liquidity forecast had been adjusted compared with earlier budget documents, it indicated that the projected reserve remains limited and that additional supporting information is necessary to fully assess the figure. The supervisory body encouraged the government to continue examining measures that could strengthen its liquidity position, including opportunities to improve revenue collection, manage expenditure and create greater financial flexibility to address unforeseen circumstances.
With respect to expenditure, the Cft requested additional clarification regarding increases in personnel costs and spending on goods and services. Personnel expenditure is projected at XCG 281 million for 2026, compared with the provisional XCG 223 million recorded in 2025, while expenditure on goods and services is budgeted at XCG 168 million, compared with XCG 127 million the previous year. The budget attributes these increases partly to the anticipated filling of vacancies, revisions to job classifications, salary adjustments, inflation and project-related expenditure. The Cft indicated that more detailed explanations would improve its ability to assess these projections and determine whether the expenditure estimates are realistic.
The supervisory body also addressed the need for continued improvements in financial reporting across the broader public sector. It noted that reports covering the collective sector for the years 2021 through 2024 remain outstanding, while the formal composition of the collective sector for 2026 and 2027 has not yet been established. The Cft acknowledged that steps are being taken to address these matters and encouraged their completion so that future budget assessments can incorporate a more comprehensive picture of the country's financial obligations, including those associated with government-owned and affiliated entities.
According to the Cft's estimates, St. Maarten's central government debt, including short-term liabilities, is projected to reach approximately XCG 1.39 billion by the end of 2027, equivalent to about 42 percent of gross domestic product. The supervisory body emphasized the importance of sound financial planning, accurate reporting and realistic investment schedules in supporting the country's ability to manage its obligations while pursuing national development priorities.
Importantly, the Cft recognized the efforts of the Minister of Finance and the government's administrative organization to improve the budget cycle. It noted that preparations for the 2027 budget are on course for timely adoption and expressed the expectation that recommendations already discussed with government officials will be adequately incorporated into the process. The supervisory body also referred to work undertaken on a framework intended to provide clearer guidance on the financial standards that apply to the country's budgeting process.
Given the limited time remaining in the current financial year, the Cft concluded that pursuing amendments to the approved 2026 budget would offer little practical benefit. Instead, it recommended that attention be concentrated on the 2027 budget, where outstanding matters can be addressed through improved financial planning and more detailed supporting documentation. The Cft indicated that it would inform the Kingdom Council of Ministers of its assessment.
The advisory letter ultimately reflects both the progress being made in St. Maarten's budget preparation process and the work that remains to strengthen public financial management. While the Cft continues to seek greater clarity on expenditure projections, investments and financial reporting, its acknowledgment of the government's progress toward timely adoption of the 2027 budget represents a positive development. The coming budget cycle will provide an opportunity for government to build on that progress, improve financial transparency and establish a stronger foundation for implementing the country's development priorities.
