Housing, agriculture agencies get bulk of government subsidies

MANILA, Philippines — Subsidies issued to state-run firms went up 28 percent to P9.16 billion in September, bulk of which were given to housing and agriculture agencies, including a restructuring insurer.

According to the Bureau of the Treasury, funding support for government-owned and controlled corporations (GOCCs) rose by double digits in two segments.

Subsidies for major non-financial government corporations spiked 37 percent to P5.34 billion, while for other government corporations surged 32 percent to P3.82 billion.

Among major non-financial government corporations, the National Housing Authority (NHA) took up the largest share of the subsidies at P3.06 billion. The National Irrigation Administration (NIA) came in next with P2.12 billion, while the Light Rail Transit Authority received P85 million.

On the other hand, the Philippine Crop Insurance Corp. (PCIC) made up about 59 percent of the funding support extended to other government corporations at P2.24 billion. The PCIC struggles to keep its finances afloat without subsidies, forcing policymakers to reform its business model to improve its operations.

Under the chairmanship of Finance Secretary Carlos Dominguez III, the PCIC has embarked on a move to engage private firms in insuring farmers and their crops to expand its insurance reach and reduce its financial exposure.

Subsidies were also granted to the Bases Conversion and Development Authority, P735 million; Philippine Heart Center, P147 million; Civil Aviation Authority of the Philippines, P127 million; as well as the National Kidney and Transplant Institute, P107 million.

However, no funding support was issued to government financial institutions in September from P463 million a year ago, based on records from the Treasury.

Subsidies to GOCCs slipped eight percent to P145.88 billion in the nine months to September from P158.76 billion a year ago. Funding support to other government corporations slid two percent to P92.33 billion, while to major non-financial government corporations declined 18 percent to P52.72 billion.

On the other hand, subsidies to government financial institutions jumped 78 percent to P824 million during the period. While the Philippine Health Insurance Corp. received no funding support in September, it accounted for over half of the yearly total at P76.06 billion.

Although GOCCs generate income to get them through their day to day operations, they ask for subsidies to finance their programs and projects that their revenues can no longer pay for.

Subsidies rose by around 14 percent to a record P229.02 billion last year, from P201.52 billion in 2019, as state-owned firms demanded additional funds to sustain their operations during the pandemic.