Gov’t subsidy to state firms up 139% in Q1; NIA granted biggest chunk

Subsidies given away by the national government to state-run corporations during the first quarter jumped 139 percent year-on-year to P19.666 billion, with over half granted to the National Irrigation Administration (NIA).

The latest Bureau of the Treasury data showed that subsidies received by government-owned and/or -controlled corporations (GOCCs) from January to March more than doubled from P8.244 billion a year ago.

The NIA was the recipient of P11.083 billion or 56 percent of the first-quarter subsidies.

According to its website, the NIA is the GOCC mainly responsible for irrigation development and management in the country.

Last year, the NIA was one of the largest recipients of GOCC subsidies totaling P16.909 billion, only exceeded by the Philippine Health Insurance Corp.’s (PhilHealth) P43.776 billion.

Free irrigation was one of the banner platforms of President Duterte during his campaign in 2016.

The NIA was hence allotted a higher P38.4 billion under the 2017 national budget not only to provide free irrigation, but also to build new irrigation systems and rehabilitate and restore existing facilities to jump-start anew the country’s agriculture sector.

An additional allocation of P2 billion was intended as irrigation fee subsidy in lieu of the collection of irrigation service fees. According to reports, the NIA has been collecting P1.8-P2 billion in irrigation service fees annually.

In March, President Duterte-appointed NIA administrator Peter Laviña quit his post, saying he was “quietly leaving the government” to spare the administration from embarrassment.

Laviña was accused of seeking money from government contractors, an allegation which he had denied.

Laviña, who was also Mr. Duterte’s spokesperson during the campaign, had said he never betrayed the President’s trust.

Former Armed Forces of the Philippines chief of staff Ricardo Visaya replaced Laviña.

Record grant

Also during the first quarter of this year, the National Food Authority got P5.1 billion in subsidies, while the Subic Bay Metropolitan Authority—the investment promotion agency that grants tax and other perks to investors in the Subic Bay Freeport Zone—was granted P1.113 billion.

At end-March, major nonfinancial government corporations cornered the bulk or P17.186 billion of the subsidies; other government corporations, P2.147 billion; and government financial institutions, P333 million.

The Governance Commission for GOCCs had said that up to 90 percent of the subsidies that state corporations receive were being spent on programs and projects, while the remainder covered operational expenses.

For 2017, the government had programmed to grant P128.9 billion in subsidies to GOCCs.

Last year, the national government gave away a record P103.2 billion.