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BUDGETARY support to government-owned and -controlled corporations (GOCCs) surged by over 80 percent in November 2024 but dropped by 15 percent over the 11-month period year-on-year, data from the Bureau of the Treasury (BTr) showed.
Subsidies to state-run firms increased by 81.64 percent to P12.232 billion in November 2024 from P6.734 billion during the same month a year ago. This was also 2.20 percent higher than the P11.968-billion subsidies in October 2024.
However, GOCCs were given lesser budgetary support from January to November 2024. Subsidies during the 11-month period amounted to P129.442 billion, 15.42 percent lower than the P153.050 billion a year ago.
Rizal Commercial Banking Corporation Chief Economist Michael L. Ricafort told the BusinessMirror this is due to the national government’s tight fiscal space amid a series of typhoons that required calamity-related assistance.
Meanwhile, the spike in subsidies in November “could be partly attributed to the increased disbursement/utilization of budget after some government underspending earlier in 2024, especially in the third quarter of 2024,” Ricafort said.
Election-related spending ahead of the 2025 midterm elections may have also caused the higher subsidies, as some government infrastructure projects and other programs need to be expedited before the election ban, according to Ricafort.
Non-financial firms get top load
Of the subsidies extended in November 2024, major non-financial government corporations cornered the highest amount with P11.088 billion.
More than half of the allocation, or P6.836 billion, was given to the National Irrigation Administration (NIA). The National Food Authority (NFA) also received P3 billion while the National Electrification Administration obtained P900 million.
About P1.012 billion was extended to other government corporations, such as the Philippine Children’s Medical Center (P211 million), Philippine Heart Center (P168 million) and National Kidney Transplant Institute (P163 million).
Meanwhile, government financial institutions received P132 million, of which P127 million and P5 million were secured by the Social Housing Finance Corporation and Credit Information Corporation, respectively.
Over the 11-month period, the highest subsidy amount among the 44 state-run firms went to the NIA with P67.049 billion, followed by the Philippine Health Insurance Corporation (PhilHealth) at P9.599 billion and NFA with P8.250 billion.
In 2023, PhilHealth obtained the highest subsidy worth P50.746 billion out of the total P163.535 billion.
However, this year, the state-run health insurer will not be receiving any budgetary support from the national government after the congressional Bicameral Conference Committee for the 2025 budget bill removed its subsidy.
Government officials argued that PhilHealth has “adequate” reserve funds to continue the payment of members’ health benefits and even improve its benefit packages.
PhilHealth said its reserve funds are worth P281 billion while its surplus funds amounted to P150 billion as of October 2024. Its investment portfolio, meanwhile, reached P489 billion as of November 2024.
Based on the 2025 General Appropriations Act, state-run corporations will receive P127.427 billion as budgetary support this year. This went down by 32.30 percent from P188.229 billion in 2024.
“GOCC subsidies would be a function of the latest 2025 national budget dynamics such as vetoed items and other budget exclusions that could result in some reduction in the coming months of 2025,” Ricafort said.
Firms that generate more income and operate efficiently would require less financial assistance from the national government while those with lower profitability would need more subsidies, especially as they are fulfilling mandates that serve the general public, he added.