Gov’t subsidies drop in August

State subsidies to governmentowned and -controlled corporations (GOCCs) dropped in August, but the Duterte administration’s total monetary aid to these companies continued to rise in the first eight months of the year.

Data from the Bureau of the Treasury showed the national government had disbursed R6.08 billion in subsidies to state-run firms in August, lower by 18 compared with R7.4 billion in the same month a year ago.

Based the Treasury report, nearly half or 46.3 percent of the total subsidy releases, equivalent to R2.82 billion, went to the National Irrigation Administration (NIA).

At end-August, the total financial support given to the agency amounted to R23.89 billion.

In January, President Rodrigo R. Duterte stopped the NIA from collecting the Irrigation Service Fee (ISF) from farmers. There is also a bill pending in Congress seeking to make the agency’s free irrigation program permanent.

After NIA, the second biggest recipient of monetary help was the Philippine Crop Insurance Corp. (PCIC), the implementing agency of the government’s agricultural insurance program.

Based on the Treasury data, PCIC received R1.4 billion worth of subsidy from the national government in August, its first financial aid for the year.

Subsidies to NIA and PCIC cornered 69.3 percent of the government’s total disbursements for the month.

Meanwhile, other GOCCs that enjoyed financial aid were the Social Housing Finance Corp. ( R 929 million), Small Business Corp. ( R350 million), National Power Corp. (R263 million), and the Philippine Children’s Medical Center (R89 million).

Subsidies also went to Subic Bay Metropolitan Authority (R65 million), Philippine Rice Research Institute (R38 million), Philippine Heart Center (R38 million), Philippine Institute for Development Studies ( R27 million), and Lung Center of the Philippines (R22 million) received subsidies in August.

Other recipients were Center for International Trade Expositions and Missions (R16 million), Zamboanga City Special Economic Zone Authority (R8 million) and Southern Philippines Development Authority (R3 million).

In the first eight months of the year, the Treasury reported that the national government’s total subsidies to GOCCs stood at R81.17 billion, up by 2.4 percent compared with R79.26 billion in the same period last year.

For next year, the national government earmarked a record R162.55 billion in financial aid for GOCCs and government financial institutions (GFIs), up by 20 percent compared with the projected R135.51-billion disbursements this year.

The increase is attributed to the government’s non-recurring expenses on the conditional cash-transfer (CCT) program being facilitated by the Land Bank of the Philippines, which aims to support Filipino households that will be affected by the proposed tax reform package.

Aside from the CCT, the government has also tapped the Development Bank of the Philippines (DBP) to help in funding the planned public utility vehicle (PUV) modernization program.

The Land Bank and DBP are traditionally non-recipients of monetary aid from the national government as these two state-owned lenders are members of the so-called “Billionaires’ Club,” an elite class of GOCCs that declare R1 billion or more in dividends annually.

The budget department is allocating R25.62 billion in subsidies for Land Bank next year and another R1.13 billion for the DBP.