Philippines Reduces State Subsidies to GOCCs Amidst Economic Recovery

In the first 11 months of 2023, the Philippine government demonstrated a notable decrease in financial support to its state-run corporations (GOCCs), reflecting a strategic shift aligned with the nation’s economic rebound. The Bureau of the Treasury’s data revealed a 4.5% reduction in subsidies to GOCCs compared to the previous year, amounting to approximately PHP 153.05 billion. This decline signifies the government’s confidence in the ongoing economic recovery, allowing for a reduced dependency on state support for these corporations.

Despite the overall decrease, November 2023 saw a slight increase in subsidies, reaching PHP 6.74 billion, a minor uptick from PHP 6.16 billion in November 2022. This contrast underscores the dynamic nature of government support, adjusting to the varying needs of state-run enterprises throughout the year. Interestingly, subsidies in November plummeted 73.2% from October’s PHP 9.19 billion, yet were 9% higher compared to the same month in the previous year.

The largest recipient of government subsidies was the Philippine Health Insurance Corp. (PhilHealth), receiving a substantial PHP 50.7 billion. This allocation reflects the government’s prioritization of healthcare and social services, especially crucial in the post-pandemic recovery phase.

The strategic reduction in subsidies is part of the government’s broader fiscal management approach, ensuring that resources are efficiently allocated and state-run firms are encouraged towards greater self-reliance. As the Philippine economy continues its trajectory of recovery and growth, such fiscal measures play a pivotal role in balancing public expenditure with economic stability and growth.