Subsidies to state firms down 37% to P20B

The government gave out some P2.2 billion in subsidies to state-owned and -controlled corporations in October, a big part of which were allocated to those engaged in projects related to utilities, labor, economic zones, tourism and trade promotion.

Documents from the Bureau of the Treasury showed that the amount was 83 percent lower than the P12.6 billion given out in the same month of 2011.

This brought cumulative subsidies to state firms for the first 10 months of this year to P20.1 billion or 37 percent less than the P30.7 billion given in the same period last year.

Cumulative expenses on subsidies continued to be lower year-on-year even as the national government’s total spending grew by 14.5-percent in January-October.

Last week, Budget Secretary Florencio B. Abad said Malacañang expected the momentum in government spending to combine with the seasonally strong holiday consumption as well as the start of spending in relation to the upcoming 2013 elections in boosting the economy.

“The sustained strength in government spending augurs well for the continuing expansion in the economy after we broke expectations with a 7.1-percent growth in gross domestic product in the seasonally slow third quarter,” Abad said.

“We are confident that this growth can be sustained in the traditionally strong fourth quarter,” he added.

Also last week, the Treasury reported that total spending in the 10 months to October reached P1.37 trillion or about three-quarters of the program for the entire year.

The top recipient of subsidies to state firms, in terms of cumulative receipt, in the first 10 months was the National Electrification Administration (NEA) with P4.4 billion.

The others in the top five recipients of subsidies were the National Food Authority with P4 billion; National Housing Authority with P2.4 billion; Philippine Health Insurance Corp. or PhilHealth with P2.2 billion, and the National Irrigation Administration (NIA), P1.5 billion.

For October alone, the NEA was also the top recipient with P1.6 billion or 73 percent of total subsidies during the month.

Other firms and agencies that got the biggest subsidies in October were the National Labor Relations Commission with P221 million; Cagayan Economic Zone Authority, P135 million; Tourism Promotion Board, P52 million, and Center for International Trade Expositions and Missions, P35 million.