Subsidies to state firms jump to P19.3 billion

MANILA, Philippines — As government hikes its spending for pandemic recovery, subsidies for state-run firms jumped by double digits, with increased allocation for agricultural and housing agencies.

According to the Bureau of the Treasury, subsidies granted to government-owned and controlled corporations (GOCCs) ballooned by 69 percent to P19.3 billion in the first quarter from P11.42 billion in the same period last year.

On a yearly basis, funding support for major non-financial government corporations jumped by 58 percent to P12.74 billion, while other government corporations expanded by 96 percent to P6.57 billion.

Among major non-financial government corporations, the National Irrigation Administration (NIA) received 60 percent of the subsidies at P7.7 billion. Last year NIA also secured the largest share of subsidies in its bracket at P38.31 billion.

The National Housing Authority obtained 25 percent of subsidies for major non-financial government corporations at P3.2 billion in the first quarter. The National Food Authority came in next with nine percent of total at P1.19 billion.

On the other hand, the Bases Conversion and Development Authority cornered a third of all the subsidies extended to other government corporations at P2.17 billion.

Under the same segment, the Philippine Fisheries Development Authority took up 13 percent at P828 million, followed by the Small Business Corp. with  P500 million.

In the first quarter, the government also issued P480 million to the Philippine Children’s Medical Center and another P441 million to the Philippine Heart Center.

Similar to 2021, the government has yet to release any funding support for government financial institutions (GFIs) as of the first three months of the year. GFIs include state-owned banks Land Bank of the Philippines and Development Bank of the Philippines, as well as the National Home Mortgage Finance Corp.

For this year, the government has set aside at least P206.75 billion in funding support, including equity and infrastructure outlays, for GOCCs. Subsidies for GOCCs declined by 19 percent to P184.77 billion in 2021 from P229.02 billion in 2020, as the government began cutting some of its pandemic expenses to trim its budget deficit.

For 2022, the government wants to bring down the deficit to 7.7 percent of the economy from a record 8.61 percent in 2021 by pushing revenue collections up to outpace spending rise.

Although GOCCs raise revenues to get them through their day-to-day operations, they also rely on subsidies to bankroll their programs and projects that their incomes can no longer cover.