Subsidies to GOCCs hit P12.56 billion in 9 months

MANILA, Philippines – Subsidies disbursed by the government to government-owned and controlled corporations (GOCCs) and state-owned agencies rose to P12.56 billion from January to September this year, P1.81 billion higher than last year’s P10.75 billion.

This was despite plans by the Department of Finance (DOF) to cut subsidies for state-owned firms to contain the government’s yawning budget deficit.

The budget gap has already swelled to P237.5 billion during the nine-month period, only P12.5 billion short of the full-year ceiling of P250 billion.

With the nine-month subsidies already at P12.56 billion, disbursements for the whole of 2009 would likely exceed total subsidies released last year amounting to P13 billion.

The bulk of the subsidies in the first nine months went to the National Housing Authority, which got P3.7 billion. The NHA is mandated to develop and implement a comprehensive and integrated housing program for the poor.

The next major recipient is the National Food Authority (NFA), whose mandate to sell rice at prices cheaper than market rates, has resulted in heavy losses for the government.

During the nine-month period, the state-owned grains agency received P2 billion.

The Philippine National Railways, which is mandated to provide railway services to promote economic development, received P1.062 billion.

The National Home Mortgage Finance Corp., the government’s major secondary market for home mortgages that uses the funds of agencies to buy home mortgages, got P900 million while the National Irrigation Administration, which implements irrigation projects necessary to boost agriculture, received P892 million.

The Philippine Coconut Authority, which develops the country’s coconut industry, received P422 million.

Despite the higher subsidies from January to September this year compared to the same period in 2008, the disbursements in September were lower than the subsidies released the previous month.

In September alone, disbursements stood at P596 million, lower than the P1.463 billion recorded in August as the government tries to reduce the amount given to state-owned firms.

The Department of Finance is continuously reviewing the performance of GOCCs to determine which may be recommended to Congress for abolition. –Iris C. Gonzales (The Philippine Star)