The government released P43.7 billion in tax expenditure subsidy in the first nine months, exceeding the ceiling of P39.2 billion.

This is however slightly lower (by 0.9 percent) compared to the same period last year of P44.1 billion.

For 2009, the government’s tax expenditure fund is expected to amount to P55.38 billion, higher than programmed of P44.9 billion due to additional budgets requested by state-controlled corporations such as the National Food Authority, National Power Corp., and the Bases Conversion Development Authority.

Based on data from the Department of Finance, the emerging TEF as of mid-September is 23.3 percent more than originally projected.

TEF’s are appropriated budgets but government owned and controlled corporations (GOCCs) can make additional tax subsidy requests to the Department of Budget and Management when needed. These funds are used to support the tax expenditures of government agencies and GOCCs.

The tax subsidy exceeded the first half program because of additional requirements by NPC of P5.3 billion for its 2006 and 2007 value added tax liabilities. BCDA also took out P2.8 billion tax subsidy for its Subic-Tarlac Expressway project.

In the case of the NFA, the tax support covers the 50 percent tariff imposed on all rice imports.

Last year, the government’s total TEF disbursement amounted to P58.71 billion, surpassing the program of P25 billion.