GOCC subsidies down nearly 19% in May

Subsidies provided to government-owned and -controlled corporations (GOCCs) fell 18.73% year on year in May to PHP 7.92 billion, the Bureau of the Treasury (BTr) said.

The Treasury reported that month on month, May subsidies dropped 45.57% from April.

The National Government (NG) extends subsidies to GOCCs to help fund operational expenses not covered by their revenue.

In May, the National Irrigation Administration (NIA) topped the subsidy list with PHP 3.54 billion or 44.72% of the total.

The National Electrification Administration received PHP 1.25 billion and National Food Authority (NFA) PHP 750 million.

The Philippine Fisheries Development Authority was granted PHP 724 million in subsidies in May. It did not receive subsidies in the previous month.

State-run firms on the subsidy list included the Philippine Heart Center (PHP 385 million), the Sugar Regulatory Administration (PHP 208 million), the Philippine Coconut Authority (PHP 170 million), the Philippine Rice Research Institute (PHP 133 million), the National Kidney and Transplant Institute (PHP 124 million), and the Philippine Children’s Medical Center (PHP 120 million).

Other GOCCs obtaining subsidies exceeding PHP 50 million include the Development Academy of the Philippines (PHP 77 million), the Light Rail Transit Authority (PHP 74 million), the Cultural Center of the Philippines (PHP 60 million), the Lung Center of the Philippines (PHP 59 million), the National Dairy Authority (PHP 58 million), the Philippine Institute for Development Studies (PHP 44 million), the Center for International Trade Expositions and Missions (PHP 27 million) and the Philippine Institute of Traditional and Alternative Health Care (PHP 20 million).

Those receiving less than PHP 20 million were the People’s Television Network, Inc. (PHP 18 million), the Metropolitan Waterworks and Sewerage System (PHP 14 million), the Aurora Pacific Economic Zone and Freeport Authority (PHP 10 million), the Philippine Tax Academy (PHP 10 million), the Philippine Center for Economic Development (PHP 9 million), and the Subic Bay Metropolitan Authority (PHP 8 million).

The Southern Philippines Development Authority, The Tourism Infrastructure & Enterprise Zone Authority, and the Zamboanga City Special Economic Zone Authority all received PHP 7 million in May. 

Receiving no subsidies were the Land Bank of the Philippines, the Small Business Corp., the National Housing Authority, the National Power Corp., the Philippine National Railways, the Bases Conversion Development Authority, the Intercontinental Broadcasting Corp.-13, the Philippine Crop Insurance Corp., the Power Sector Assets and Liabilities Management Corp. (PSALM), and the Tourism Promotions Board.

“This could be part of the fiscal reform measures to (limit) subsidies to GOCCs (to) priority and mission-critical items for economic growth and development,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said over the weekend.

In order to plug the budget deficit, profitable state-run firms with surpluses have been requested to remit more dividends, he said.

As of May 15, the Department of Finance had collected PHP 76 billion in GOCC dividends.

In the first five months, the budget deficit widened 29.41% year on year to PHP 523.9 billion, as the government accelerated spending on infrastructure and social programs.

In the first five months, GOCC subsidies hit PHP 45.05 billion, down 21.03% from a year earlier.

The NIA was the top recipient in the five months with PHP 15.34 billion. This was followed by PSALM (PHP 8 billion) and the NFA (PHP 3.75 billion).

In a separate report, PIDS, the government think tank, urged the government to repurpose the NIA’s idle irrigation water rights for broader public use, including household supply and other municipal needs.

PIDS reported that more than 1.3 million liters per second of irrigation water, intended for farmland — now goes largely unused as many agricultural areas have been converted into residential and commercial communities. — Aubrey Rose A. Inosante