Gov’t subsidies to state firms declined in Aug
The Philippine government gave out a total of P90.6 billion in subsidies to 55 state-owned and-controlled corporations in the eight months ending in August as the growth in spending during the period was driven more by debt servicing.
Data from the Bureau of the Treasury show that the amount of subsidies for the eight months dropped by 34 percent from P136.7 billion in the same period of 2021.
Most of the subsidies given out from January to August went to healthcare, irrigation and housing initiatives, with Philippine Health Insurance Corp. (PhilHealth) receiving the largest amount at a total of P33.69 billion.
Others among the top five recipients of subsidies were the National Irrigation Administration (NIA) with P26.75 million; National Housing Authority (P8.94 billion); National Food Authority or NFA (P3.56 billion); and Bases Conversion and Development Authority (P2.17 billion).
In August alone, the government spent P15.54 billion on subsidies, lower by 63 percent compared to the P42.35 billion given out in the same month last year.
PhilHealth received the month’s largest amount at P11.23 billion while the NIA got P2.53 billion; Philippine Fisheries Development Authority, P291 million; NFA, P219 million; and Philippine Children’s Medical Center, P164 million.
From January to August, the reduction in subsidies outpaced that of interest and principal payments on borrowings, which decreased by 25 percent to P682.25 billion from the P909.32 billion paid out in the same period of 2021.
The amount spent on debt servicing dropped as a decrease in amortization outran an increase in interest payments.
For the eight month period, a total of P340.08 billion was spent on interest payments, showing an increase of 17 percent from the yearago P291.49 billion.
Also, a total of P342.77 billion in principal was paid, falling by 45 percent from P617.83 billion in the first eight months of last year.
Latest data show that, at the end of August, the debt stock reached a new record high of P13.02 trillion. Of the total, 69 percent or P8.94 trillion were domestic borrowings while 31 percent or P4.08 trillion was obtained from foreign lenders.
As of the end of the first semester, the debt-to-GDP ratio has receded from 63.5 percent at the end of
March but still above the 60-percent threshold that is considered prudent based on international standards.
The Marcos administration’s economic team has set a goal of reducing the debt-to-GDP ratio to 52.5 percent by 2028 or the end of the President’s term.
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