Government to slash GOCC subsidies

MANILA, Philippines — The Aquino administration is looking at slashing its subsidies to government owned and controlled corporations (GOCCs) next year by almost half of this year’s programmed budget.

Data from the Department of Finance showed that the government will likely set aside only P11.232 billion for subsidies to state-owned companies in 2012, significantly lower by 45 percent compared with P20.473 billion this year.

Finance Undersecretary Gil S. Beltran, however, explained that the significant decline in government’s proposed subsidy fund for next year is due to expected lower rice procurement by cash-strapped National Food Authority.

The proposed amount of subsidies, however, is subject to Department of Budget and Management’s approval, which will be later on submitted to Congress for deliberations.

The Bureau of Treasury earlier reported that government’s expenses in subsidizing the operations of state-owned and controlled corporations nosedived in April compared with the same month last year.

The government spent only P110 million in subsidies in April, or a billion pesos lower compared with P1.110 billion incurred in the same month in 2010.

The finance department has been attempting to reduce subsidies in favor of equity infusions because higher subsidies run counter to its goal of making these firms self-reliant and less dependent on financial assistance from the government.

In January to April, the government spent P1.183 billion in subsidies, or more than double compared with P4.434 billion in the same period last year.

In 2010, the government spent P20.473 billion in subsidies from only P17.439 billion recorded in 2009.

The Department of Finance has programmed P14.1 billion in subsidies last year, or 19 percent lower compared with the P17.4 billion in the previous year. –CHINO S. LEYCO, Manila Bulletin