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Business

GOCC subsidies up 8-fold in August

Elijah Felice Rosales - The Philippine Star

MANILA, Philippines — Subsidies to government-owned and controlled corporations (GOCCs) grew eight-fold to more than P42 billion in August due to increased support for state-run health services.

Based on records from the Bureau of the Treasury, subsidies granted to GOCCs rose to P42.35 billion in August from P4.98 billion a year ago on overwhelming hikes in funding support for two segments of government-owned firms.

Subsidies secured by major non-financial government corporations quadrupled to P10.15 billion, while those received by other government corporations ballooned to P32.2 billion.

Among major non-financial government corporations, the National Irrigation Administration took 59 percent of total at P6.01 billion. The National Housing Authority followed with P3 billion, while the Local Water Utilities Administration came next with P706 million.

The Philippine Health Insurance Corp. (PhilHealth) made up more than 95 percent of subsidies extended to other government corporations at P30.6 billion. PhilHealth requires funding support from its principal to cover for the decline in member contributions during the pandemic.

Finance Secretary Carlos Dominguez III in August said PhilHealth struggles to pay off its debts after sustaining a deficit of P25.5 billion in the first semester.

As such, Dominguez said PhilHealth may need to adjust the benefits it provides to its members to cut its debts and losses, as well as survive the pandemic, even as he vowed the government will subsidize the state-run health insurer for as long as finances can.

Further, the government injected P500 million in subsidies to the Small Business Corp. tasked to issue loans to micro, small and medium enterprises in need of additional capital.

The government also infused P168 million and P147 million to the government-owned hospitals Philippine Children’s Medical Center and Philippine Heart Center, respectively. Likewise, it gave P147 million in subsidies to the Development Academy of the Philippines.

On an annual scale, subsidies released to GOCC have dropped by about 10 percent to P136.71 billion as of end-August, from P151.61 billion a year ago. By segment, funding support for major non-financial government corporations declined by nearly 22 percent to P47.37 billion, while other government corporations slid by around three percent to P88.51 billion.

Although GOCCs raise revenues to bankroll their day-to-day operations, they ask for subsidies from the government to run programs and projects that their own income can no longer fund.

Last year subsidies extended to state-run firms jumped by roughly 14 percent to P229.01 billion, from P201.52 billion in 2019. PhilHealth received over a fourth of the volume at P62.39 billion to bankroll its services at the height of the pandemic.

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