State subsidies drop by 8 percent to P20 billion in Q1

MANILA, Philippines — The government cut down its budgetary support to state-run firms by eight percent to almost P20 billion in the first quarter, with the bulk of the subsidies meant to support the agriculture sector.

Data from the Bureau of the Treasury showed that subsidies to government-owned and controlled corporations (GOCCs) in January to March went down by eight percent to P19.59 billion from P21.31 billion in the same period last year.

During the period, subsidies for other government corporations dropped by nearly 50 percent to P4.29 billion. It cornered 22 percent of the aggregate.

On the other hand, budgetary support for major non-financial government corporations reached P15.18 billion, up 19 percent. It covered 77 of the entire subsidies.

The remaining one percent or P112 million went to government financial institutions, largely to the National Home Mortgage Finance Corp.

The government grants subsidies to GOCCs as a way to cover operational expenses that are not supported by their own revenues.

For the quarter, a little over 50 percent of the total subsidies went to the National Irrigation Administration at P10.32 billion.

This is a slight 1.3 percent increase from the P10.18 billion it received in the same period last year.

The National Food Authority (NFA) secured the second highest subsidy at P2.25 billion. NFA only received P1.24 billion in subsidies for the three-month period in 2023.

The National Electrification Administration came in third with P2.09 billion. In the same quarter last year, NEA did not receive any subsidy.

Other top subsidy recipients during the quarter include the Social Housing Finance Corp., Philippine Heart Center, Philippine Fisheries Development Authority, Philippine Children’s Medical Center, National Kidney and Transplant Institute and SB Corp.

The smallest subsidy was given to the Philippine Center for Economic Development and the Philippine Tax Academy both at P7 million, followed by the Bangko Sentral ng Pilipinas with P10 million and the Zamboanga City Special Economic Zone Authority with P11 million.

During the quarter, the government remained at a budget deficit of P272.6 billion, a percentage higher from 2023.

This came after the government still spent beyond what it generated from revenues, although at minimal percentage this time.

During the period, total revenue collection improved by 14 percent to P933.7 billion while government spending expanded by 11 percent to P1.21 trillion.