Lawmakers question P70-B subsidy for losing state firms

MANILA, Philippines - Two congressmen questioned yesterday the administration’s decision to give P70 billion in fresh taxpayers’ subsidy next year to government corporations.

During the House plenary debates on the proposed P2-trillion 2013 national budget, Representatives Carlos Padilla of Nueva Vizcaya and Rufus Rodriguez of Cagayan de Oro City said most of the recipients of additional capital are losing companies that should be collapsed.

Padilla said there should be enough political will on the part of the administration to close down losing state firms or to sell these to interested private investors.

He said it is not a good policy to prop up state corporations that cannot even earn what is needed to keep them operating without need for taxpayers to subsidize them through the national government.

“P70 billion is a huge amount of precious taxpayers’ money that could otherwise be put to good use, that could otherwise be spent for infrastructure or important social services like education,” he stressed.

For his part, Rodriguez asked Cavite Rep. Joseph Emilio Abaya about what happened to a good governance commission for state corporations, which Congress created last year.

Abaya, the appropriations committee chairman who is defending the 2013 budget proposal, said the commission has started a study on which corporations to retain and which to collapse.

He said it would take the good governance body at least two years to complete its study.

Rodriguez said he could not understand why state firms with functions that are better carried out by the private sector continue to exist and are given annual subsidies.

“For instance, why do we have a Precision Tools Corp. and a Rubber Estate Corp.? Should the government be in the business of manufacturing precision tools? Should the government be in the business of producing rubber?” he asked.

He said producing tools and rubber should be the job of private companies. He suggested that these and many other similar state firms be collapsed and their subsidies used for more productive purposes.

The House will hold sessions again next Thursday and Friday to wrap up discussions on the 2013 budget proposal.

Congressmen usually convene only from Monday through Wednesday. They are scheduled to approve the budget on second reading before the first congressional recess starts next Saturday.