Gov’t subsidies to GOCCs up P35 B in July

Bigger subsidies were provided to more government-owned and – controlled corporations (GOCCs) last July than in the same period a year ago, data from the Bureau of the Treasury showed.

A total of P35.26 billion in credit were extended to six GOCCs during the first month of the Duterte administration, up more than 15 times from last year’s P2.32 billion provided to three firms. The National Government gives out credit to GOCCs and state-run financial institutions to support their operations. They, in turn, remit more than half of their annual earnings as dividends. Subsidies form part of state expenditures, while dividends are recorded under revenues. In July, dividends, which are usually reported on specific months of the year, reached only P46 million. Broken down, a huge chunk of subsidies were provided to the Philippine Health Insurance Corp. (PhilHealth) which received P33.8 billion in funding. It was followed at far second by the National Irrigation Administration (NIA) with P683 million, Philippine Crop Insurance Corp. with P646 million, and Philippine Heart Center with P113 million. At the bottom and below the P100-million mark were the Philippine National Railways with P13 million and Southern Philippines Development Authority with P4 million. For the first seven months, subsidies already reached P71.86 billion, a 55.23-percent increase from P46.29 billion last year, data showed. PhilHealth still accounted for the bulk of subsidies from January to July with P35.27 billion, followed by the National Housing Authority which was granted P10.63 billion and NIA with P8.82 billion. Bigger subsidies were recorded in July as the Duterte government recorded a wider budget deficit of P50.67 billion, the widest in four months. The budget gap – which indicates more revenues spent than earned – brought the seven-month tally to P170.98 billion, accounting for nearly 44 percent of this year’s cap, figures showed. The new government widened the cap to P388.87 billion, equivalent to 2.7 percent of gross domestic product (GDP) upon taking over. The original limit was at P283.7 billion, accounting for two percent of GDP.