GOCC subsidies down to P78 B in 2015

By Prinz Magtulis (The Philippine Star), March 28, 2016

MANILA, Philippines – Higher revenue contributions and less subsidies marked last year’s financial performance by government-owned and -controlled corporations (GOCCs), data from the Bureau of the Treasury showed.

Subsidies declined 3.01 percent to P78.01 billion, while reported dividends surged 32.4 percent to P32.269 billion.

The government gives money to GOCCs to support their operations and dues. These subsidies are recorded in the monthly reported balance sheet as part of state expenditures.

In turn, these entities, by law, are required to report at least 50 percent of their annual earnings to government coffers as revenues.

“It shows better financial performance on the part of GOCCs,” Finance Assistant Secretary Ma. Teresa Habitan said in a phone interview last week.

The Department of Finance oversees GOCCs’ financial health, while the Governance Commission on GOCCs regulates their entire operations.

In 2011, President Aquino criticized certain GOCCs for offering huge bonuses and perks to their executives even as they financially underperform.

Last year, the Philippine Health Insurance Corp. (Philhealth) received the biggest subsidy amounting to P34.87 billion, data showed. Comparative data on dividends are not yet available.

Following Philhealth and their corresponding subsidies were National Irrigation Administration (P11.68 billion), National Housing Authority (P11.21 billion), National Food Authority (P4.25 billion) and National Electrification Agency (P4.18 billion).

The other billion-peso recipients of subsidies were Local Water Utilities Administration (P1.85 billion), Philippine Crop Insurance Corp. (P1.33 billion) and Social Housing Finance Corp. (P1.28 billion).

In an earlier interview, Astro del Castillo, managing director at First Grade Holdings Inc., said while more GOCC dividends are welcome, it should not be construed as a measure of efficiency.

“For example, if NHA is given P20 billion to build houses and yet it was not able to do so but it has big dividends, I do not think that’s a good measure of efficiency,” Del Castillo said.

“The real testimony of reforms is whether these institutions are able to do the mandate given them by the republic,” he added.