RMI Finance Watch
The Marshall Islands economy,
in plain language.
Growth, inflation, Compact grants, banking and the new tax laws, drawn from the IMF, ADB, World Bank, the Compact Trust Fund, GAO and RMI legislation, with notes on what the numbers mean on the ground in Majuro.
Growth vs inflation (ADB, Sep 2026)
| Fiscal year | GDP growth | Inflation |
|---|---|---|
| FY2025 | 3.0% | 6.2% |
| FY2026 | 2.6% | 5.3% |
| FY2027 (forecast) | 2.0% | 4.7% |
ADB Asian Development Outlook, September 2026. ADB raised FY2026 growth from 2.2% in July and trimmed inflation from 5.7%. The IMF (Sep 2026) is more pessimistic on prices, expecting inflation to rise to 8.5%.
What's driving it
- Energy shock. The Middle East conflict pushed up diesel prices; the IMF says high fuel import dependence and limited storage leave the RMI very exposed.
- Power tariffs. MEC raised rates more than 20% in May 2026. Ongoing tank farm rehabilitation limits fuel storage that could cushion price swings.
- Economic emergency. Declared 26 March 2026, with a fuel crisis response plan in April. It lapsed in June and was not extended.
- Fiscal stance. Spending is expansionary (higher social spending, fuel offsets). The IMF wants extra support kept temporary and targeted at vulnerable households.
- Headwinds. Shipping disruption hits construction, utilities and trade; El Niño and ocean warming weigh on fisheries. Only eight transshipments were reported in September.
CPI basics
EPPSO publishes separate quarterly CPIs for Majuro and Ebeye. An IMF mission in 2024 helped resample the basket and update expenditure weights.
Joey's note
- The gap between the ADB and IMF inflation numbers is the story: anyone budgeting for FY2027 should plan for at least 5% and test 8–9%.
- Fuel and freight now move local prices within weeks; contracts without escalation clauses carry the risk.
- Storage matters. Until the tank farm is back, the RMI has less buffer against price spikes than its neighbors.
Amended Compact of Free Association
- The 2023 amended compacts extend US economic assistance to the FSM, RMI and Palau for another 20 years; with trust fund contributions they total over $6 billion for the three through 2043 (GAO).
- US contributions to the RMI Compact Trust Fund are expected to total $700 million over four years; a $200M deposit was made on 9 October 2025, and a final $100M goes into Account 2 in FY2027.
- GAO (May 2026): FY2025 grants mainly fund education and health salaries; projects face late fund disbursement, rising construction costs and labor shortages.
- Unspent Compact sector funds (outside multi-year projects) go to the Trust Fund under the FY2026 Appropriations Act.
Trust Fund and distributions
| Item | Figure |
|---|---|
| Net asset value, 31 Dec 2025 | $1,633.9M |
| Net position, end FY2025 | $1,392.6M |
| FY2025 return | 12.16% |
| Return since 2004 (avg, net) | 7.41% |
| FY2026 Individual Support Distribution | $27.7M |
The ISD ("Enra") pays residents US$200 a quarter; the third round went out on 28 May 2026, about $8.2M to more than 40,000 people.
Other recent grants
- World Bank: extra US$9M budget support (June 2026) for the energy crisis, on top of a US$21M development policy operation.
- ADB: US$11.7M grant, including US$6.7M for fuel and food costs.
- Japan: ¥203M (about $1.3M) grant aid signed in October 2026.
Joey's note
- Grants fund more than 80% of the budget, so disbursement timing drives cash flow for government suppliers and contractors.
- Quarterly Enra payments add a regular boost to retail spending in Majuro and Ebeye.
Banking system
- Two licensed commercial banks: the locally owned Bank of the Marshall Islands (BOMI) and a Bank of Guam branch.
- IMF (Sep 2026): banks are stable with adequate capital and liquidity, but lending is weak, and dependence on a single correspondent bank is a key vulnerability.
- Priorities: bring the Monetary Authority of the Marshall Islands fully into operation and keep up AML/CFT implementation.
Correspondent banking and digital bonds
- The Pacific Islands Forum and World Bank are running a US$77M correspondent banking project across eight countries, including the RMI. A feasibility study for a regional payment mechanism was due in early 2026.
- USDM1, a tokenized sovereign bond backed by short-term US Treasuries. In November 2025 the Banking Commissioner said firms may hold it as sovereign debt rather than as a virtual asset.
- The IMF has doubts about USDM1's benefits for inclusion and revenue, and flags financial integrity risks and external issuance as concerns.
Joey's note
- With one correspondent bank, every local business shares the same single point of failure for overseas payments. Clean KYC records and a backup payment route are worth the effort.
- A working Monetary Authority would be the biggest structural change to RMI banking in years.
Comprehensive tax reform
| Law | Status |
|---|---|
| Consumption Tax Act 2025 (PL 2025-47) | Enacted |
| Net Profit Tax Act 2025 (PL 2025-38) | Enacted |
| Excise Tax Act 2025 (PL 2025-46) | Enacted |
| Tax Administration Act 2025 (PL 2025-48) | Enacted |
| Income Tax (Amendment) Act 2025 | Effective 1 Oct 2025 |
| Bill 103, PL 2026-68 (wages) | Passed 16 Mar 2026 |
The new laws replace cascading gross revenue taxes with a VAT-style consumption tax and a tax on business profits. Phase 2 was planned for October 2026; check the official gazette for commencement dates.
What's changed for workers and employers
- Bill 103 exempts the first $8,320 of each worker's annual wages from withholding tax.
- Non-residents' income from services performed in the RMI is generally subject to 10% withholding.
- The IMF says the reform is at a critical stage: finishing regulations, completing taxpayer registration, building compliance capacity and taxpayer communication.
Joey's note
- This is the biggest change to RMI taxes since the Income Tax Act of 1989. The shift from gross revenue to profit means bookkeeping quality starts to matter for tax, not just for lenders.
- Watch for the gazette commencement dates and the registration rollout.
About $1.3M formalized through an Exchange of Notes in Majuro.
September recorded only eight tuna transshipments in Majuro, the second single-digit month this year.
FY2026 growth projected at 3.1%, inflation expected to rise to 8.5%. Single correspondent bank flagged as a vulnerability; tax reform entering a critical phase.
FY2026 growth 2.6%, inflation 5.3%; FY2027 2.0% and 4.7%. Fiscal surpluses expected as grants offset costlier imports.
Additional financing through the existing development policy operation to cushion higher energy costs.
Education and health remain priorities, but implementation and US oversight are delayed.
Declared 26 March over soaring fuel prices; fuel crisis response plan followed in April.
First $8,320 of annual wages exempt from withholding, to ease the cost of living.
NAV of $1.63B at 31 Dec 2025 after a $200M US contribution; FY2025 return 12.16%.
Banking Commissioner letter confirms firms may hold the Treasury-backed digital bond as sovereign debt, not a virtual asset.
FY2026 appropriation of $769,342,435, with more than 80% from donors.
What to watch next
Tax reform commencement
Gazette dates for the Consumption, Net Profit and Excise Tax Acts, and how fast taxpayer registration rolls out.
Inflation path
Whether fuel and freight costs ease enough to bring inflation toward ADB's 4.7% FY2027 forecast, or stay near the IMF's higher numbers.
Trust Fund and banking
The final $100M US deposit into Account 2 in FY2027, and progress on the Monetary Authority and the regional correspondent banking solution.
Sources
IMF staff visit, Sep 2026 · IMF 2025 Article IV · ADB ADO Sep 2026 · World Bank, Jun 2026 · Compact Trust Fund · GAO-26-107778 · FY2026 Appropriations Act · RMI tax laws summary · World Bank CBR project · Marshall Islands Journal
For information only, not tax, legal or investment advice. Forecasts differ by source and are revised often.
Banks in the RMI
Bank products and rates: PRB, BOMI, Bank of Guam and MIDB
Three commercial banks and one government development bank serve the Marshall Islands. Here is what each one offers, the published lending, savings and time deposit rates, and how they differ on deposit insurance and international transfers.
Side-by-side comparison
| Feature | PRB | BOMI | Bank of Guam | MIDB |
|---|---|---|---|---|
| Full name | Pacific Regional Bank | Bank of Marshall Islands | Bank of Guam, Majuro Branch | Marshall Islands Development Bank |
| Type | Commercial bank | Commercial bank | Branch of a US bank | Government development bank |
| Ownership | Private, Majuro-based | Private, Marshallese | Bank of Guam (US) | RMI Government |
| Roots | Lending company since Jan 2001 | Renamed BOMI in 1982 | Majuro branch since 1969 | Created by law in 1988 |
| FDIC deposit insurance | No | No | Yes | n/a (not a deposit bank) |
| US dollar correspondent access | None reported (2025) | Yes, via a US correspondent | Direct, through the US Fed system | n/a |
| Savings and checking | Yes | Yes | Yes | No |
| Personal and business loans | Yes, core business | Yes, main lender to residents | Yes | Enterprise loans |
| Micro and small business loans | — | Yes, revolving micro-loan fund | — | Yes, incl. outer islands |
| Housing loans | — | — | — | Yes, housing program |
| Debit cards / ATMs | — | Debit cards | ATMs | No |
| International wires | Limited | Yes (SWIFT BOMDMH22) | Yes, plus remittances | No |
| Enra (UBI) direct deposit | Yes | Yes | Yes | No |
| Where | Majuro | Uliga, Majuro; branches incl. Kwajalein | Delap, Majuro | Majuro |
"—" means not confirmed in public sources. Rates for each bank are in the next section.
Rates and products
Published rates as of November 2026. Rates change, so confirm with the bank before you sign.
| Product | Rate (APR) | Key terms |
|---|---|---|
| PRB · Pacific Regional Bank | ||
| Institution Supported Salary Loan (ISSL) | 10%–12% | For employees of enrolled employers; payroll-backed, fast approval |
| MISSA Pension-Backed Loan | 12.35% | Secured by monthly MISSA pension |
| Lease & Rental Revenue Loan | 12%–14% | Land leases and rental income as collateral |
| Personal and business loans | Not published | Subject to credit review; online application 24/7 |
| BOMI · Bank of Marshall Islands | ||
| Business / commercial loan | 11.5%–13.5% | Unsecured 13.5%; lower as collateral rises (11.5% at 96–120% cover); TCD-secured at TCD rate + 2.5%; 1% fee |
| Consumer loan | 15% | Up to $2,000; 2 guarantors; payroll allotment |
| Quick loan | 15% | Up to 6 months; approval in as little as 30 minutes |
| Line of credit (mobile) | 15% | Requires BOMI Mobile Banking and a guarantor |
| Micro loan (outer islands) | 7% | Up to 5 years; 2% fee; Taiwan ICDF fund |
| Student tuition loan | 7% | 1-year repayment; 2% fee; no credit check |
| MIDB · Marshall Islands Development Bank | ||
| Business / SME loans | 4%–7% | Fixed rate; SME Business and Housing Loan Program |
| Housing loans | 6%–7% | Fixed rate; includes USDA Self-Help Housing program |
| Consumer loans | 5%–14% | Fixed rate; about 95% of FY2024 loan approvals by value |
| Bank of Guam · Majuro | ||
| Personal, auto, home and commercial loans | Not published | Offered bank-wide; ask the Majuro branch for current rates |
MIDB ranges are from its audited FY2024 financial statements (year ended 30 Sep 2024). BOMI interest accrues daily on the unpaid balance (principal × rate × days ÷ 365).
| Bank | Account | Rate | Key terms |
|---|---|---|---|
| PRB | Passbook Savings | Up to 1.00% p.a. | Tiered rates; open with as little as $100 |
| PRB | Personal and Business Checking | Not published | Checks can be ordered online |
| BOMI | Personal Savings | 1.00% | Interest paid quarterly |
| BOMI | Money Market Checking | 0.25% | Interest paid monthly |
| Bank of Guam | Statement Savings | Not published | No opening deposit; monthly fee below minimum balance |
| Bank of Guam | Senior Savings (55+) | Not published | No monthly or minimum balance fees |
| Bank of Guam | Kids Club Savings | Not published | No minimum; parent or guardian as joint owner |
| MIDB | — | n/a | Does not take deposits |
Bank of Guam's 3.04% APY True Savings Plus is online-only for Guam and the CNMI and is not offered in Majuro. Only Bank of Guam deposits are FDIC-insured.
| Term | BOMI (TCD) | PRB | Bank of Guam | MIDB |
|---|---|---|---|---|
| 3 months | 1.75% | Offered; rates not published | Not published for Majuro | n/a |
| 6 months | 2.00% | |||
| 9 months | 2.25% | |||
| 1 year | 3.00% | |||
| 2 years | 4.00% |
BOMI rates are annual, paid yearly; BOMI also offers an education savings TCD at 4%. A time deposit can also secure a cheap loan: BOMI lends against a TCD at the TCD rate plus 2.5%.
Lowest published lending rates
MIDB for housing (6–7%) and business (4–7%); BOMI's micro and student loans at 7%. Among commercial salary loans, PRB's ISSL (10–12%) sits below BOMI's 15% consumer rate.
Best published savings return
BOMI's 2-year TCD at 4.00% is the highest published deposit rate. Regular savings pay about 1% at both BOMI and PRB.
Real return check
With FY2026 inflation forecast at 5.3–8.5%, every published deposit rate here is below inflation, so savings lose buying power in real terms.
Bank profiles
Pacific Regional Bank
A privately owned bank headquartered in Majuro, it grew out of Ajejdrikdrik, Inc., a lending company founded in January 2001. Deposits are not FDIC-insured.
- Personal and business loans, the core of its lending history
- Deposit accounts
- Receives Enra quarterly payments by direct deposit
Note: the 2025 RMI Economic Review said PRB had no correspondent bank yet, which limits international transfers.
Bank of Marshall Islands
The country's main locally owned bank and the main source of loans to residents. Not FDIC-insured.
- Personal and business accounts, savings and loans
- Debit cards
- Micro-loans: over $4.3M lent to 1,006 people in 11 years from a Taiwan ICDF fund
- International wires (SWIFT BOMDMH22)
Contact: Uliga, opposite RRE Hotel · (692) 625-3636
Bank of Guam, Majuro
A full-service branch of a US FDIC-insured bank, open in Majuro since 1969. It is the only RMI bank with direct access to the US Federal Reserve payment system.
- Individual and business accounts
- Remittances and international wires
- ATMs
- Deposits held in the RMI: about $186.6M (June 2025)
Contact: Delap Village · (692) 625-3322/3331 · Mon–Fri 9am–4pm
Marshall Islands Development Bank
A government development bank set up under the MIDB Act 1988 to promote economic development. It lends; it does not take deposits.
- Loans, guarantees and equity for enterprises in agriculture, fisheries and other sectors
- Housing program (took over the Housing Authority)
- Outer island private sector lending; a taxi-loan pilot launched in 2018
Best for: development and housing finance that commercial banks may not offer.
How to choose
- Safety of deposits: only Bank of Guam deposits carry FDIC insurance.
- Paying overseas suppliers or receiving wages from abroad: pick a bank with working US dollar correspondent access. Bank of Guam has the most direct route; BOMI uses a US correspondent.
- Local loans and micro-finance: BOMI has the longest track record and 7% micro and student loans; PRB offers payroll, pension and lease-backed loans.
- Housing or development projects: start with MIDB.
- Coming change: once the Monetary Authority is running, all commercial banks will hold settlement and reserve accounts there.
Disclosure and sources
Disclosure: Joey Delos Santos is Chairman of the Board of PRB. This comparison uses public sources only and is for information, not a recommendation of any bank.
US State Dept, 2025 Investment Climate Statement · IMF Technical Assistance Report, 2026 · RMI Economic Review 2025 · PII (PRB history) · Marshall Islands Journal (BOMI micro-loans) · Info Marshall Islands · Bank of Guam branches · MIDB Act 1988 · Marianas Variety (Enra) · Griffith policy paper · BOMI interest rates · BOMI loans · PRB website · Bank of Guam savings · MIDB FY2024 audited statements
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About IslandCFO
Two decades of finance, from Manila to Al Khobar to Majuro
I started in audit at SGV, moved into internal audit and corporate accounting for EEI Corporation in Manila and Saudi Arabia, then into senior finance roles in construction, manufacturing and banking. Since 2017 most of my work has been in the Marshall Islands as CFO of PII, the country's largest construction group and the sole provider of quarry products, ready-mix concrete and asphalt in Majuro.
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