Gov’t subsidies to state firms continue to decline, says DOF
Subsidies to government-owned and -controlled corporations (GOCCs) continued to decline in the five months to May.
Officials of state firms claimed that improvements in their finances allowed them to become less dependent on state support.
Data from the Department of Finance (DOF) showed that the subsidies amounted to P10 billion from January to May, down by 16 percent from the P11.95 billion reported in the same period last year.
National Treasurer Rosalia de Leon earlier said that, based on the latest evaluations, GOCCs’ financial performances have been improving.
Also, the state firms have been remitting more dividends to the government, she added.
“Improvements in public sector governance have reduced the dependence of our GOCCs on the national government,” De Leon said.
According to the data from the Department of Finance, some of the biggest beneficiaries of state subsidies in the first five months were: National Housing Authority (NHA) with P5.33 billion, National Kidney and Transplant Institute (NKTI) with P1.12 billion, National Irrigation Administration (NIA) with P907.7 million, Philippine Coconut Authority (PCA) with P820 million, and Philippine Postal Corp. (PPC) with P515.64 million.
Many state firms are still partly dependent on state subsidies, particularly those with developmental and social protection mandates. But the DOF said that there is a standing directive for GOCCs to improve their capacity to generate income, and several institutions have done just that.
De Leon said that the government so far has collected nearly P18 billion in dividends from state firms, exceeding the collections recorded in the past years. The biggest contributors of dividends are Land Bank of the Philippines, Development Bank of the Philippines, and Philippine Amusement and Gaming Corp.
And with the improvement in their financial standing, GOCCs are expected to increase their remittances to the government in the years ahead, the national treasurer said.
Subsidies in the first five months of the year accounted for about one percent of the government’s total expenditures for the period.
The Department of Budget and Management earlier reported that total government spending in the first five months of the year reached P751.21 billion—up year on year by 12.4 percent from P668.39 billion.
The DOF likewise reported that the revenue collected in the five-month period reached P708.37 billion—up year on year by 9.7 percent from P645.64 billion.
The bulk of revenues are in the form of taxes collected by the Bureau of Internal Revenue, as well as import taxes and duties collected by the Bureau of Customs.
As a result, the government posted a budget deficit of P42.8 billion in the first five months—up year on year by 88 percent from P22.79 billion.
Despite the significant increase in the deficit, the government said that the full-year budget gap would likely settle below the target ceiling of P238 billion.