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Expert: $241M boosts island 'desperately in need of cash'

Expert: $241M boosts island 'desperately in need of cash'

TUMON: A man walks with with a 5-gallon water container near Acanta Mall in the Tumon tourist district on April 8. Dontana Keraskes/The Guam Daily Post

An eligible family of eight – two parents and six dependent children – will have as much as $11,200 extra to spend once they get their third economic impact payment.

Multiply that by thousands of eligible households. Or taxpayers.

"In my view, the net effect of the stimulus is positive to the region. With tourism making up roughly 50% of incoming flows of money, the island's economy is desperately in need of cash," ASC Trust chairman and Guam Economic Development Authority Board Chairman David John said on Monday.

John previously described 2020 as "the year from hell," while acknowledging that mass vaccination bodes well for the economy in 2021.

He said the next 90 to 120 days will be key.

"If we are able to start to generate arrivals in tourism, we could end the year on a bright note," he said.

Federal relief funds continue to reach Guam, the latest of which are those from the $1.9 trillion American Rescue Plan.

Some 20,000 stimulus payments totaling $53.8 million will be mailed out this week to eligible Guam households, the Guam Department of Revenue and Taxation announced.

That's just the first batch out of the $241 million in EIP 3 that the IRS and U.S. Treasury approved for Guam.

"My plan is to purchase a second-hand vehicle that's large enough for my growing family as I have just given birth to a newborn in January," Breana Torres, a mother of four, told The Guam Daily Post on Monday about her plans for using their EIP 3.

Torres said when the pandemic shut down schools, she had no choice but to resign from her job as a gas station manager to homeschool her oldest son, who was supposed to be in kindergarten.

"My other half has been the only one working to support our family," the Merizo resident said. "We don't receive Pandemic Unemployment Assistance or any unemployment benefits due to the fact that I resigned."

Retailers: Great boost

Retailers, such as the Guam Premier Outlets in Tamuning, also welcome the "great news with the release of the EIP federal funds for individuals and families who qualify."

"We know this will be a great boost to our local economy. We appreciate and look forward to our local customers shopping and dining at our GPO and Tumon Sands Plaza centers," GPO General Manager Monte Mesa said Monday night.

Mesa said without the tourists returning to Guam, the EIP funds "will greatly help our local economy."

"We need it," he said.

GPO's mall hours remain from 10 a.m. to 7 p.m., and could return to pre-pandemic hours when tourist arrivals have returned to at least 50% of what they used to be, Mesa said.

Gov. Lou Leon Guerrero plans to reopen tourism and ease post-travel quarantine if at least 50% or 62,500 of Guam's adult population are fully vaccinated by May 1. As of Saturday, 38,705 have been fully vaccinated.

Downside

John, of ASC Trust and GEDA, said the concern locally is that as businesses are beginning to ramp back up for opening tourism, federal funds "act as a disincentive for some workers to return to work."

Employers have reported to the Guam Department of Labor PUA claimants who allegedly refused to go back to work or were absent frequently purportedly to continue claiming PUA. GDOL warned PUA claimants that this is considered a federal fraud.

John also said as not all segments of the economy have been hit by the pandemic at the same level, "this level of funding could create some inflationary pressures."

The long-term issue, he said, "will of course be debt on a national level" and a global level since the U.S. "isn't acting in a vacuum spending."

But for many households, receiving the EIP 3 soon will help keep the lights on and a roof over their head.

Doslyn Fereichy, a mother of three, said her household will use their anticipated EIP 3 to pay rent, power and water bills that are now behind, as well as to buy a used car for the family.

She lost her job prior to the pandemic, while her husband got work hour cuts because of it.

Other households said they will also use their EIP 3 to pay debts, be current in their utility bills, and help them set aside some for other emergencies.

Haidee Eugenio Gilbert

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