The government’s equity infusions to state-controlled corporations and other agencies as capital outlays continue to fall below the program, amounting only to P600 million in the first nine months versus the program of P10.5 billion.

“Equity contributions fell short by P9.9 billion (or 94.5 percent) than the programmed level as a result of reprogramming of releases for capital support to GOCCs,” according to the Department of Budget and Management (DBM).

Still, the finance and budget departments said the emerging equity releases for 2009 is P6.63 billion. Last year, the budget was P4.4 billion but only P1.69 billion was actually disbursed.

Under the law, the DBM is mandated to release equity, subsidy and net lending to GOCCs and government financial institutions.

The Department of Finance, in the meantime, has been attempting to reduce subsidies in favor of equity infusions to help GOCCs restore financial stability.

As of September, the Bureau of the Treasury said that equity only amounted to P573 million from P1 billion the same period last year. For the month of September alone, total releases were P122 million.

Subsidies to GOCCs, as reported earlier, amounted to P12.56 billion in the first nine months of this year. This is less than P500 million away from the full-year subsidy budget of P13 billion.
Including cash advances or net lending and equity, total GOCC support in the first nine months amounted to P23.3 billion from August’s P18.7 billion.

The government spent P1.07 trillion from January to September, of which P235.28 billion were interest payments and P199.22 billion are allotment to local government units.

Next year, the budget support for GOCCs is higher at P36 billion from P32 billion in 2009. These are in the form of subsidy, equity and net lending or cash advances.

The programmed subsidy for 2010 is P14.17 billion from P13 billion this year. Equity infusion to controlled corporations, in the meantime, will amount to P6.76 billion next year. Total advances is higher next year to P15 billion.

Budgetary support for controlled corporations next year will total P21 billion. This will include the P4 billion multi year obligation authority for the central bank, the first of a 10-year P40-billion capitalization program.

Last year the GOCC subsidies totaled P16.98 billion, exceeding the program of P10.25 billion.

The DoF has been strictly monitoring the finances of GOCCs to minimize impact on public sector finance. Closely monitored GOCCs are National Food Authority, Home Guaranty Corp., National Electrification Administration, National Development Co., Philippine National Railways and the Land Rail Transportation Authority.