Record subsidies have been programmed for state-owned and -controlled corporations (GOCCs) next year based on government budget documents.
The Budget of Expenditures and Sources of Financing for 2018 lists P162.55 billion in GOCC subsidies, 19.9 percent higher than the P135.50 billion estimated for 2017,
If achieved, the programmed subsidies — also 30 percent higher than the P125 billion in 2016 – will be the highest since the government began compiling relevant data in 1997.
For instance, the Land Bank of the Philippines was allotted P25.62 billion while the Development Bank of the Philippine (DBP) will receive P1.13 billion.
Finance Secretary Carlos Dominguez 3rd said subsidies for the two state-owned banks were needed to boost their capital in compliance with Bangko Sentral ng Pilipinas requirements.
“Both banks need to meet a certain level amount of capital adequacy ratio, so we want to make sure that these banks are strong enough to do that,” he said.
Dominguez also noted that the DBP was now is reorienting its activities to become an infrastructure bank, which
will require the bank to have higher capital.
“By the way these infrastructure program is very large so you need a lot of funds. So it really makes sense for us to invest, this is really an investment to keep them healthy as well as to make sure that they can move forward,” he said.
Meanwhile, National Treasurer Rosalia de Leon said the P25 billion allotted for LandBank would not only boost its capital but will also fund complimentary programs.
“That would be for the implementation of LandBank of the Conditional Cash Transfer program, and then an additional P1.1 billion for the PUV Modernization program,” she said.