The Asian Development Bank says Tonga still faces ongoing hurdles to repay loans this financial year.
The ADB liaison officer in Tonga, Saia Faletau, says Tonga's revenues remain low, with remittances still down after the global financial crisis.
With public servants' salaries making up about 55 percent of total government expenditure, Saia Faletau says there is room for cuts.
"When you talk about the financial challenges that government face to repay the loan, basically it can repay the loan in place of operations of government. The main problem basically come from the huge drop in its revenues collection, which is through the impact of the global economic crisis."
The Matangi Tonga reports Tonga managed a slight fiscal surplus in 2012 due to budget support grants.