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Manila Bulletin devider Business devider DOF plans to access dormant billions from state-owned firms for public projects

DOF plans to access dormant billions from state-owned firms for public projects

Published Jul 15, 2024 06:14 am

The Department of Finance (DOF) has announced its plan to mobilize billions of pesos of dormant funds held by state-owned corporations to bolster government efforts in health, social services, and infrastructure development.

In a statement on Monday, July 15, the DOF said that tapping into these surplus funds within government-owned and controlled corporations (GOCCs) represents a fiscally responsible approach, obviating the need for additional borrowing or tax burdens.

The DOF, however, said that this move would not compromise the financial stability of the participating GOCCs nor hinder their service provisions.

For instance, the DOF cited the case of the Philippine Health Insurance Corp. (PhilHealth), which holds a substantial P500 billion reserve that can be utilized for covering multi-year claims.

The DOF clarified that PhilHealth's P500 billion reserve does not derive from member contributions but rather from a small portion of the substantial unutilized national government subsidies.

“In the case of PhilHealth, unused government subsidies are not part of its reserve funds, nor income that is being restricted by the Universal Health Care Act to be used by the national government as a general fund,” the DOF said.

The DOF also assured that this move full complies with all relevant laws, notably the General Appropriations Act of 2024, which mandates appropriations beyond the initial proposals of the executive branch.

“The merit of this tack is best exemplified by the fact that PhilHealth and other GOCC remittances to the treasury are what enabled the DBM [Department of Budget and Management] to release P27.5 billion to pay the 5.04 million claims of Covid pandemic era service allowances of frontliners,” the DOF said.

“The same care and diligence were exercised in calibrating the Philippine Deposit Insurance Corporation’s (PDIC) contribution to the revenue raising effort,” it added.

These were made in observance of legal railguards spelled out in legal opinions by the Office of the Government Corporate Counsel (OGCC), the DOF said.

“Moreover, the return of unused and excess funds was approved by the PhilHealth and PDIC’s respective boards,” the DOF said. “The result promotes the common good, based on the list of recipients identified in the national budget.”

Some of these are ongoing foreign-assisted Projects (FAPs), such as the Metro Manila Subway Project, the North-South Commuter Railway System, and the PNR South Long Haul Project, among other big-ticket infrastructure projects.

Other FAPs are the Support to Parcelization of Lands for Individual Titling (SPLIT) Project and the Philippine Fisheries and Coastal Resiliency Project.

“Other critical projects we have commitments to meet are the Philippine Multi-Sectoral Nutrition Project; Supporting Innovation in the Philippine Technical and Vocational Education and Training System; the Mindanao Inclusive Agriculture Development Project; and the Philippine Rural Development Project, to name a few,” it added.

The DOF said the government cannot afford to have excess money sleeping in the GOCCs while withholding the same funds from public investment. 

“Hibernating funds can help the nation without harming government corporations. This way, the government does not have to inflict additional taxes, increase our debt, and put pressure on our deficit,” the department said.

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Department of Finance (DOF) government owned and controlled corporation
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