Omnibus Insular Areas Act of 1988 - Extends the Essential Air Services Program provisions of the Federal Programs and Services Agreement until October 1, 1998.

Authorizes the Ninth Judicial Circuit of the United States to provide assistance to the the courts of the freely associated states (Micronesia, the Marshall Islands, and Palau). Permits the Chief Justice of the United States or the chief judge of the Ninth Judicial Circuit to authorize any circuit judge of, or district judge within, the Ninth Circuit to serve temporarily as a judge of any court of a freely associated state.

Amends the Compact of Free Association to: (1) direct that the agricultural and food programs for the Biikini and Enewetak Atolls be provided by a U.S. or Marshallese contractor through a grant to the Government of the Marshall Islands; and (2) authorize the food programs of the Rongelap and Utrik people.

Authorizes the President to negotiate agreements which provide that: (1) the United States shall provide for the distribution of controlled substances in the freely associated states under the Controlled Substances Act; or (2) the freely associated states shall be eligible for U.S. exports of narcotic drugs upon establishing and maintaining a system to report annual estimates of narcotic need to the International Control Board and imposing control on such drugs consistent with the Single Convention on Narcotic Drugs, 1961.

Designates Northern Marianas College as a depository to receive Government publications and directs the Superintendent of Documents to supply to the College one copy of each such publication. Amends the Education Amendments of 1972 to add the Northern Marianas College to the list of land grant colleges in the territories to receive an endowment.

Authorizes the Northern Mariana Islands, American Samoa, Guam, the Virgin Islands, Puerto Rico, and the Trust Territory of the Pacific Islands to treat waste water treatment funds as grants, provided that the Administrator of the Environmental Protection Agency concurs.

Waives a requirement for local matching funds in order to have a Federal program or project apply to or take place in the Insular Areas.

Amends the Revised Organic Act of the Virgin Islands to require the President (currently, the Attorney General) to appoint a U.S. marshal for the Virgin Islands.

Repeals the requirements that the District Court of the Virgin Islands for the Division of Saint Croix be held in Christiansted and for the Division of Saint Thomas and Saint John at Charlotte Amalie.

Increases to 50 percent (currently, 30 percent) of the proceeds from the sale of certain lands transferred from the Navy to Guam the amount Guam may use for port development and not have to pay the Federal Government.

Declares, for purposes of U.S. citizenship provisions of the Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the United States of America, that: (1) persons born in the Trust Territory of the Pacific Islands who have at least one parent born in the Trust Territory are to be considered citizens of the Trust Territory of the Pacific Islands; (2) the term "person" shall include such person's children; and (3) persons shall not owe allegiance to any foreign state if they affirm under oath that they do not consider themselves to have owed allegiance to that foreign state on November 3, 1986 (thus granting Trust Territory citizenship, and U.S. passport eligibility, to certain persons born in the Northern Mariana Islands after termination of the United Nations trusteeship).

Declares, for purposes of U.S. citizenship provisions of the Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the United States of America, that: (1) persons born in the Trust Territory of the Pacific Islands who have at least one parent born in the Trust Territory are to be considered citizens of the Trust Territory of the Pacific Islands; (2) the term "person" shall include such person's children; and (3) persons shall not owe allegiance to any foreign state if they affirm under oath that they do not consider themselves to have owed allegiance to that foreign state on November 3, 1986. Allows a parent, guardian, or person in loco parentis to give the oath for children under 13 years of age.

Amends the Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the United States of America to: (1) provide that a person born in the Trust Territory of the Pacific Islands shall be considered to have been a citizen of the Trust Territory on November 3, 1986, and not owing allegiance to a foreign state if one parent of such person was born in the Trust Territory and such person took no affirmative steps to acquire or preserve foreign nationality after his or her 18th birthday; and (2) Specify that a "person" shall be construed to refer to any person and his or her child (thus granting Trust Territory citizenship, and U.S. passport eligibility, to certain persons born in the Northern Mariana Islands after termination of the United Nations trusteeship).