Government subsidies to GOCCs hit P17.4 billion in 2009

MANILA, Philippines – Subsidies disbursed by the government to government-owned and controlled corporations (GOCCs) and state-owned agencies reached P17.439 billion last year, already way above the P11.3 billion programmed subsidies for the period, latest data from the Bureau of the Treasury (Btr) showed.

The latest figure is 17.43 percent more than the P21 billion disbursed in 2008, data also showed.

Subsidies are still on the rise despite plans by the Department of Finance (DOF) to slash subsidies for state-owned firms to plug the government’s yawning budget deficit.

For the whole of 2009, the single biggest recipient of government subsidies is cash-strapped National Food Authority (NFA) with P2 billion each in July and in November.

This makes NFA the biggest recipient of government subsidies since the start of the year.

The government subsidizes the operations of NFA because it is mandated to sell rice at lower prices, usually at a heavy loss for the agency and to state coffers.

The next biggest recipient is the National Housing Authority (NHA) which is mandated to develop and implement a comprehensive and integrated housing program for the poor. NHA received P3.858 billion in subsidies last year.

Other major recipients of subsidies last year are the Local Water Utilities Administration which received P1.950 billion and the Philippine National Railways which received P1.168 billion. PNR is mandated to provide railway services to promote economic development.

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, is also one of the highest recipients. It got P900 million in subsidies last year.

The DOF is continuously reviewing the performance of government-owned and controlled corporations to determine which may be recommended to Congress for abolition.

Subsidies given to state agencies are on the rise even as the government is facing a swelling budget deficit which is expected to hit a record P293 billion this year. –Iris C. Gonzales (The Philippine Star)