GREAT BAY--The Committee for Financial Supervision, Cft, has welcomed St. Maarten’s significantly earlier preparation of the 2027 budget, calling it a clear improvement over previous years, but cautioned that the country still faces major financial risks involving health funds, liquidity and financially troubled government-owned companies.
In its half-year report covering January through June 2026, the Cft noted that St. Maarten has struggled for years to submit and approve budgets within the legally required timeframe. However, the draft 2027 budget was submitted to the Cft for advice on June 25, much earlier than in previous years. Finance Minister Marinka Gumbs has also indicated that the budget is expected to be submitted to Parliament on September 8, with the goal of having it approved before the legal December 15 deadline.
The Cft said it was satisfied with the earlier start to the 2027 budget process, but stressed that improved timing does not remove the underlying financial pressures facing the country.
According to the report, the 2027 budget is expected to show very large risks to government finances, particularly in relation to the health funds, government-owned companies and the country’s liquidity position. The Cft said it continues to closely monitor developments and hopes improvements in the budget process can prevent the need for it to advise the Kingdom Council of Ministers to issue a new financial instruction.
One of the most serious concerns remains the financial condition of St. Maarten’s health funds. The Cft said the funds are structurally operating at losses of approximately XCG 35 million annually and have accumulated debt of approximately XCG 500 million.
The deficits have so far been covered using reserves from other social funds, particularly the AOV old-age pension fund. The Cft described this practice as probably unlawful and unsustainable, warning that the liquid reserves held by Social and Health Insurances, SZV, could be exhausted within several years if the situation is not addressed.
Government has identified several measures aimed at dealing with the deficits, including the introduction of General Health Insurance, a tourist tax and savings at SZV. However, the Cft noted that the necessary legislation has repeatedly been delayed and urged government to implement the health insurance reform and tourist tax as planned in 2027.
St. Maarten’s liquidity position was also highlighted as a major concern.
According to the country’s fourth 2025 execution report, the free cash position at the end of 2025 stood at only XCG 5 million. The Cft said the position was effectively negative when approximately XCG 142 million in accumulated payment arrears is taken into account.
The Cft said St. Maarten needs additional revenue to strengthen its liquidity position, finance new policy and absorb financial risks.
There was, however, a positive development in tax collection. Through efforts involving the Stichting Belastingaccountantsbureau, SBAB, and Audit Team St. Maarten, approximately XCG 30 million more in tax revenue was collected during the first quarter of 2026 compared with the same period in 2025.
The Cft encouraged government to continue these compliance efforts on a structural basis, noting that better tax collection can already make a significant contribution while broader modernization of the tax system continues.
Government-owned companies also remain a source of financial risk.
The Cft reported that TelEm and PSS do not have sufficient liquidity to meet their payment obligations. It also said GEBE continues to face significant financial challenges, including outstanding annual accounts and billing problems, limited resources for investment and an outdated tariff structure.
The Cft additionally noted that GEBE has operated for several years without permanent management, which it said has made the development of a long-term strategy more difficult.
The financial supervisor has called for government to develop a clear strategy for struggling government-owned companies and ensure that the risks they pose to public finances are properly reflected in the budget.
The report also showed that St. Maarten recorded a preliminary XCG 21 million surplus on its ordinary service for 2025. However, the Cft said the result was largely due to expenditure falling behind schedule rather than stronger-than-planned performance.
Vacancies remained unfilled and planned projects were not carried out as quickly as budgeted, contributing to lower spending.
Investment execution also remains under scrutiny. St. Maarten invested approximately XCG 97 million in 2025, while another XCG 181 million in approved investments remained to be carried out, including XCG 76 million for replacement generators at GEBE.
Government has also included an additional XCG 38 million borrowing request for new investments in the draft 2026 budget amendment. The Cft said it will assess the request critically because of the large amount of existing investment work still outstanding and the limited time remaining to execute additional projects in 2026.
Overall, the Cft’s assessment of St. Maarten presents a mixed picture. The earlier preparation of the 2027 budget and stronger tax compliance efforts are viewed positively, but the health fund deficits, weak liquidity position and financial difficulties at several government-owned companies remain significant threats to the country’s financial stability.
