Subsidies to GOCCs cut by 23%

by VG Cabuag, Business Mirror

Posted at Oct 25 2010 01:33 AM | Updated as of Oct 25 2010 09:35 AM

MANILA, Philippines - The government’s subsidies to nonfinancial state-owned firms were slashed by 23% in the first 9 months of the year, although the National Housing Authority (NHA) still received the highest monetary aid for the period.

Figures from the Bureau of Treasury showed that the national government gave some P9.67 billion to the government-owned and -controlled corporations (GOCCs) for the period, or 23% lower than the previous year’s subsidies of P12.56 billion.

The NHA received P3.44 billion for the period, the highest among the GOCCs. The agency, however, has not been receiving subsidies from the national government since June.

In September alone, the government cut its subsidies to nonfinancial GOCCs to P319 million, or 89% lower than the P596 million released during the same month last year.

President Aquino issued in September Executive Order 7, suspending the package of incentives and stopped the increases in the salaries and other benefits of board members, executives and regular employees of GOCCs exempted from the Salary Standardization Law until December 31.

Major beneficiaries of the funding disbursed in September were the Philippine Coconut Authority, which received P78 million; National Livelihood Development Corp., P52 million; and Philippine Children’s Hospital, P39 million.

Subsidies also went to Philippine Heart Center at P34 million; Cultural Center of the Philippines, P33 million; Lung Center of the Philippines, P26 million; the Department of Trade and Industry’s Center for International Trade and Exposition, P25 million; and National Dairy Authority, P9 million.

The government hopes to contain the budget deficit within a P325-billion ceiling, or 3.9 of the country’s gross domestic product, by cutting unnecessary expenses, including the funds given to state firms.

The national government’s nine-month budget deficit hit P259.79 billion in September, or P13.87 billion lower than the programmed P259.8 billion ceiling for the period.

Spending for January to September this year amounted to P1.154 trillion, or P54.2 billion lower than the programmed spending of P1.208 trillion.