The national government's expenses in subsidizing the operations of state-owned, controlled corporations (GOCCs) and government financial institutions (GFIs) may drop by 19 percent this year, data from the Department of Finance (DoF) showed.

In its latest quarterly fiscal program, the finance department has programmed P14.1 billion in subsidies, or P3.3 billion lower compared with the P17.4 billion in the previous year.

The DoF has been attempting to reduce subsidies in favor of equity infusions because higher subsidies run counter to its goal of making these firms self-reliant and less dependent on financial assistance from the government.

In January to March, the government has set aside P1.8 billion in subsidies, 17 percent lower than the P2.2 billion recorded in the same period last year.

For the second quarter of the year, subsidies is seen to decline by P795 million at P3.9 billion from P4.754 billion a year ago.

While in July to September, the government programmed P4.6 billion in subsidies, also 17 percent lower compared with the P5.6 billion registered in the same period in 2009.

During the final three-months of the year, subsidies is expected to dropped by P1.2 billion at P3.7 billion from P4.9 billion last year.

For years, the departments of budget and finance have been releasing subsidies to GOCCs and GFIs despite the fiscal deficit position. These subsidies are released to corporations with depleted capitalization.

Under the law, the Department of Budget and Management is mandated to release equity, subsidy and net lending to GOCCs and GFIs.

The DoF has been closely monitoring problematic GOCCs including grains-agency National Food Authority, Home Guaranty Corporation, National Electrification Administration, National Development Company, Philippine National Railways and the Land Rail Transportation Authority.

In 2009, subsidies to GOCCs and GFIs dropped 23 percent last year to P17.44 billion from P21.1 billion in the previous year. NFA, NHA, the Local Water Utilities Administration and Philippine National Railways were the state-owned firms that enjoyed hefty subsidies from the national government.

State subsidies to GFIs last year reached P900 million, while GOCCs received P16.55 billion from the national government.