Philippines government subsidies to state firms soar in April

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The government more than tripled its budgetary support to state-run firms to P28 billion in April, with the agriculture and energy sectors gobbling up the bulk of the subsidies.

Data from the Bureau of the Treasury showed that subsidies to government-owned and controlled corporations (GOCCs) surged to P27.72 billion in April from just P8.96 billion in the same period last year.

During the month, budgetary support for major non-financial government corporations climbed by 30 percent to P15.8 billion from a year ago.

Likewise, subsidies for other government corporations soared to P10.52 billion from just P2.08 billion a year ago.

The government grants subsidies to GOCCs as a way to cover operational expenses that are not supported by their own revenues.

For April, about 41 percent of the total subsidies went to the National Irrigation Administration at P11.43 billion. This is a nearly 200 percent jump from the P3.89 billion it received in the same period last year.

The Power Sector Assets and Liabilities Management Corp. (PSALM) secured the second highest subsidy at P8 billion. Same month last year, PSALM did not receive any budget support.

The National Housing Authority (NHA) came in third with P3.75 billion. NHA only received P836 million in subsidies in April 2023.

Other top subsidy recipients during the month in review are the agriculture sector through the Philippine Crop Insurance Corp., Philippine Rubber Research Institute and the Philippine Coconut Authority.

During the month, no subsidy was released to the National Home Mortgage Finance Corp., Social Housing Finance Corp., Local Water Utilities Administration, National Electrification Administration and National Food Authority.

The Aurora Pacific Economic Zone and Freeport Authority, Philippine Fisheries Development Authority, Philippine Postal Corp. and Tourism Promotions Board also did not get subsidy allocation in April.

For the four-month period, subsidies picked up by 56 percent to P47.31 billion from P30.27 billion a year ago.

From January to April, budgetary support for major non-financial government corporations reached P30.98 billion, up by 58 percent, while subsidies for other government corporations increased by 31 percent to P13.75 billion.

In April, the government swung to a lower budget surplus of P42.7 billion as the growth of state expenditures outpaced what the government collected from revenues. During the month, overall government expenditures grew by 32 percent to P494.5 billion while revenues picked up by just 22 percent to P537.2 billion despite the tax season.