Subsidies to GOCCs jump 54% in 10 months

MANILA, Philippines – Subsidies extended to government-owned and controlled corporations (GOCCs) jumped 54 percent in the first 10 months of the year as financial assistance to cash-strapped National Food Authority (NFA) reached P7.7 billion as of end-October, the Bureau of Treasury reported yesterday.

Data released by the treasury yesterday showed that subsidies extended to state-run enterprises reached P15.95 billion in the first 10 months of the year or P5.6 billion higher than the P10.36 billion assistance extended in the same period last year.

Aside from NFA that received P7.7 billion, other major recipients of financial assistance from January to October this year include National Housing Authority (NHA) with P3.44 billion, the National Livelihood Development Corp. (NLDC) with P1.1 billion, the National Telecommunications Commission (NTC) with P1.02 billion, the controversial Tourism Promotions Board (TPB) with P421 million, and the Philippine Rice Research Institute (PRRI) with P313 million.

Budget Secretary Florencio Abad said the financial assistance extended to GOCCs exceeded the P13.3 billion program by 20.1 percent or P2.7 billion due to the full release of NFA’s full-year subsidy of about P8 billion.

“Spending for subsidies for GOCCs was higher than program by P2.7 billion or 20.1 percent, given the full release of the P8-billion subsidy for the price stabilization and food security program of NFA,” Abad stressed.

The government grants subsidies to NFA to allow the grains agency to fulfill its mandate of selling price at affordable rates even if these were bought at high prices.

However, the debt of the company swelled to P171 billion as of May this year from only P28 billion in 2003.

Legislators have been urging the Aquino administration to rechannel the subsidies extended to NFA direct to the poor through the conditional cash transfer (CCT) program.

For the month of October alone, subsidies extended to GOCCs surged 292 percent to P6.28 billion from P1.6 billion in the same month last year.

Financial assistance extended to NFA reached P5.6 billion while P405 million was given to the Tourism Promotions Board and P139 million to the PRRI.

Abad said last month’s subsidy extended to state-owned businesses exceeded the monthly program of P1.3 billion by P4.98 billion.

Subsidies extended to GOCCs declined by 17.4 percent to P17.44 billion last year from P21.11 billion in 2008.

Latest data released by the Department of Finance (DOF) showed that the country’s budget deficit reached P270.3 billion or P22.5 billion lower than the programmed shortfall of P292.8 billion for the period of January to October.

Government revenues inched up by 7.3 percent to P993.2 billion in the first 10 months of the year from P925.4 billion in the same period last year while expenditures went up by 6.0 percent to P1.263 trillion from P1.191 trillion.

The tax take of the Bureau of Internal Revenue (BIR) improved by 9.6 percent to P670.9 billion from P612 billion while the collections of the Bureau of Customs (BOC) jumped by 16.1 percent to P213.5 billion fm P183.9 billion.

Finance Secretary Cesar Purisima said the government is confident that it would be able to contain the budget shortfall within the deficit ceiling of P325 billion or 3.9 percent of gross domestic product (GDP) this year from a record deficit of P298.5 billion or 3.9 percent of GDP last year.

“We are confident that given our strong commitment to improve revenue collections and manage expenditures prudently, while at the same time working on expanding the tax base, we will achieve the full year deficit level of P325 billion,” he stressed.

The Aquino government has committed to trim the budget deficit to two percent of GDP starting 2013 until the end of Aquino’s term in 2016. –Lawrence Agcaoili (The Philippine Star)