Subsidies to state firms only half of H1 target

Elijah Felice Rosales - The Philippine Star

MANILA, Philippines — The government missed by more than half its subsidy program in the first semester due to the delayed filing of special budget requests (SBRs), but expects funding for state-owned firms, particularly for health agencies, to go up in the second semester.

According to the Bureau of the Treasury, subsidies released from January to June declined by over 31 percent to P88.28 billion from P128.68 billion during the same period last year.

The amount accounted for just about 50 percent of the P178.2 billion program that policymakers allocated to finance select programs and projects initiated by government-owned and controlled corporations (GOCCs).

Subsidies issued to major non-financial government corporations fell by over 30 percent to P31.96 billion. Similarly, support for other government corporations plunged by roughly a third to P55.49 billion.

Among major non-financial government corporations, the National Irrigation Administration (NIA) received more than half of the subsidies at P16.84 billion. The National Housing Authority (NHA) got P7.3 billion in support, while the National Food Authority obtained P7 billion.

On the other hand, the Philippine Health Insurance Corp. (PhilHealth) made up nearly 82 percent or P45.45 billion of the subsidies extended to other government corporations.

In June, subsidies granted to GOCCs crashed by over 80 percent to P8.34 billion from P42.03 billion during the same month last year as state-owned firms failed to submit documents for the release of their SBRs, as well as billings to pay for their contractors.

The Department of Budget and Management (DBM) said GOCCs, including the PhilHealth, NIA, NHA, Bases Conversion and Development Authority and National Electrification Administration, are expected to file SBRs in the latter half of the year.

As such, the DBM projects spending to recover in the second semester through the release of subsidies to GOCCs and payment for contractors. PhilHealth, for one, has a pending request of P30 billion that the DBM vowed to release once requirements are complied with.

The government ramped up its spending in the first semester by 10 percent to P2.2 trillion from P2.01 trillion during the same half in 2020. In spite of this, it fell short of its spending target of P2.43 trillion for the period due to the decline in GOCC subsidies.

Although GOCCs generate revenues to keep their day to day operations afloat, they ask for subsidies from the government for programs and projects that their own income can no longer fund.

Last year, subsidies disbursed to GOCCs rose by around 14 percent to a record P229.01 billion, from P201.52 billion, as the government shelled out funds to make sure that its agencies survive the financial onslaught of the pandemic.


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