Subsidies to GOCCs double in first semester

MANILA, Philippines - Subsidies extended by the government from January to June doubled compared to the same period last year, with both the National Food Authority (NFA) and the Philippine Health Insurance Co. (PhilHealth) receiving the biggest chunks of the subsidy pie as of end-June.

According to the latest data from the Department of Finance (DOF), subsidies given to state-owned companies rose to P14.162 billion during the first six months of the year.

In contrast, subsidies given to the same government-owned and controlled corporations (GOCCs) in the same period last year amounted to only P7.466 billion.

PhilHealth, the state-owned health insurer received the biggest amount during the period with P5.069 billion.

The NFA, meanwhile, received P2.5 billion from January to June. However, this is smaller than the P2.85 billion received by the NFA in the same period last year.

The government grants subsidies to NFA to allow the grains agency to fulfill its mandate of selling price at affordable rates even if these were bought at a high price.

Last year, total subsidies given by the government to state-owned agencies including NFA amounted to P7.466 billion from January to June, data from the Department of Finance (DOF) showed.

The Finance department is continuously reviewing the performance of government-owned and controlled corporations (GOCC) to determine which agencies may be recommended to Congress for abolition or which may eventually be privatized.

Subsidies are booked as expenses and put a strain on the government’s widening budget deficit.

The government expects the deficit to hit P290 billion by yearend or 3.2 percent of gross domestic product (GDP) which is lower than the P314.4 billion recorded last year.

The Aquino administration is striving to contain the budget gap by enhancing tax administration instead of implementing new taxes. It hopes to raise economic growth to seven percent to eight percent this year and in the next three years.