The national government continues to bleed financially just to prop up inefficient or loss-making state-owned firms.

Such subsidy bloats the so-called consolidated public sector deficit that needs to be financed by borrowings.

Historically, the government directly subsidizes agencies and certain government-owned or controlled corporations as a social life line to the marginalized sector.

GOCCS with a “social mission” such as the National Food Authority, Philippine Health Insurance Corp., and National Corp traditionally ge the bulk  of these financial lifelines.    

In fact, the Aquino administration continued to prop up GOCCs, pouring P31.74 billion in subsidies into them as of the end of October.

This was almost double the P15.95 billion released in the same period last year, data from the Bureau of Treasury showed.

Last October alone, the financial support to state firms more than doubled -- from P6.28 billion in the same month last year to P12.63 billion.

Quite surprisingly, the biggest recipient of taxpayers’ money in October was state lender Land Bank of the Philippines with P7.93 billion, which was released in a single tranche.

This is totally out of character for LBP which had held the enviable record of profitability over the last few years unlike other government financial institutions that had to be bailed out by the state.

The other state firms that were extended substantial subsidies during the period were PhilHealth with P6.62-billion, Napocor  with P3.62 billion, and the NFA with P2.5 billion.

In the past months, the government had been stepping up its financial assistance to state agencies and firms whose mandates are in the areas of poverty alleviation, provision of health services to indigents, housing, and food security.

Finance Secretary Cesar Purisima had earlier said that in step with its continuing efforts to rationalize government corporations, the Aquino administration was reclassifying state firms and reviewing their assets to determine which might be ripe for privatization.

The goal was to sift state assets that could be commercialized and privatized from those that would remain under state ownership and continue to receive monetary support from the government, he said.

Purisima said the government might continue bailing out ailing state firms if needed since it still had “a lot of budgetary leeway”. Read another way, it was underspending.