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Business

Government slashes GOCC subsidies by 79% in April

Elijah Felice Rosales - The Philippine Star

MANILA, Philippines — The government tempered its expenditures in April, particularly subsidies for state-run firms, to book a budget surplus for the first time in nearly two years.

In a report, the Bureau of the Treasury said subsidies for government-owned and controlled corporations (GOCCs) fell by 79 percent to P5.12 billion in April, from P23.84 billion a year ago.

According to the Treasury, subsidies for major non-financial government corporations shrank by 73 percent to P3.67 billion, while for other government corporations dropped by 86 percent to P1.45 billion.

By distribution, the bulk of the subsidies in April were granted to agriculture, health and transport agencies. During the month, the government suspended the operations of the Metro Rail Transit Line 3 and the Light Rail Transit (LRT) Line 2 during the Holy Week for maintenance activities.

Among major non-financial government corporations, the National Food Authority received more than half of the amount at P2.06 billion, followed by the National Irrigation Administration’s P1.3 billion. The LRT Authority also obtained P250 million, while the Philippine National Railways got P60 million.

For other government corporations, the Civil Aviation Authority of the Philippines cornered the largest volume at P204 million, while the Small Business Corp. came in next with P200 million.

The Philippine Rice Research Institute secured P193 million in subsidies, while public hospitals Philippine Children’s Medical Center and the Philippine Health Center gained P184 million and P147 million, respectively.

Notably, the government has yet to release any subsidies to government financial institutions such as the Land Bank of the Philippines and the Development Bank of the Philippines.

On a yearly scale, subsidies for GOCCs plunged by 31 percent to P24.39 billion as of April from P35.26 billion a year ago. Broken down, funding support for the major non-financial government corporations decreased by 25 percent to P16.41 billion, while for other government corporations it fell by 41 percent to P7.99 billion.

For April, state spending grew by just two percent to P343.01 billion, as revenue collection rose by 19 percent to P347.95 billion. In turn, the government posted a surplus of P4.94 billion during the month, the first time that it did so in nearly two years or since June 2020’s P1.77 billion.

Although GOCCs raise revenues to sustain them through their daily operations, they still ask for subsidies to fund their programs and projects that their incomes can no longer cover.

Subsidies for GOCCs crashed by 19 percent to P184.77 billion last year, from a record P229.02 billion in 2020 after the government pulled its funding support for state-owned firms affected by the pandemic.

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