Despite difficulties in raising revenues amid the pandemic, the national government opted to increase the amount of subsidy it extended to state-owned corporations due to mounting health insurance claims.

Data from the Bureau of the Treasury revealed that the financial support extended to government owned and controlled corporations (GOCCs) soared to P42.35 billion in August from only P4.99 billion in the same month last year.

According to a report from the Treasury bureau, the the Philippine Health Insurance Corp., commonly known as PhilHealth, received the biggest portion of the subsidy, amounting to P30.61 billion.

As of August 2021, the amount of financial support that the national government gave away to PhilHealth has reached P76.06 billion, already above the P62.4 billion total disbursements in 2020.

Since the onset of pandemic last year, the Treasury document showed that the national government’s total support given to PhilHealth amounted to P138.46 billion.

Last Sept. 8, Finance Secretary Carlos G. Dominguez III said that PhilHealth needs a long-term plan to fix the agency’s “serious systemic problem,” particularly in servicing payments and claims.

Dominguez, an ex-officio PhilHeath board member, also noted that the state-run insurer is “struggling with their own systems to pay off their current debts” after contributions dwindled while expenses increased amid the pandemic.

PhiHealth incurred a P25.5 billion deficit as of June this year, the finance chief disclosed.

Aside from PhilHealth, other GOCCs that received a huge portion of the subsidy in August include the National Irrigation Administration, P6.01 billion; and the National Housing Authority, P2.9 billion.

In January to August 2021, the national government released P136.71 billion worth of subsidies to GOCCs, down 10 percent compared with P151.61 billion in the same period last year.

At end-August, PhilHealth also cornered a huge chunk of the subsidy, equivalent to 55.6 percent of the total releases.

Last week, the Treasury bureau reported that the national government’s budget deficit tripled in August to P120.9 billion from P40.1 billion in the same month last year.

Based on the Treasury report, the 24 percent growth in expenditures outpaced the six percent level of increase in revenue collections in August that resulted in a wider fiscal gap.

The Treasury bureau attributed the higher budget deficit to the release of funds for financial aid to households when Metro Manila and some provinces returned to enhanced community quarantine.

Moreover, PhilHealth’s subsidy also pushed up the national government’s expenses, the bureau said.