Government subsidies to state-run firms plunged to a near-decade low in 2025, largely due to the near-total elimination of funding for Philippine Health Insurance Corp. (PhilHealth), which was the top beneficiary for a decade from 2014 to 2023.

Total subsidies fell to ₱106.9 billion last year, the lowest level since 2016 when support stood at ₱103.2 billion, Bureau of the Treasury (BTr) data published last March 3 showed.

This 22.9-percent year-on-year decline comes as the Marcos Jr. administration scaled down its funding support for major non-financial government-owned and/or -controlled corporations (GOCCs).

The sharp fiscal contraction mirrors a significant reduction in support compared to recent years, continuing a downward trend from the ₱138.8 billion recorded in 2024 and the ₱163.5 billion seen in 2023.

Notably, the reduced subsidies in 2025 were less than half of the pandemic-era peak in 2020, when subsidies reached ₱229 billion.

During the Covid-19 pandemic, the national government (NG) provided wage subsidies to workers in severely affected small businesses and distributed cash aid to vulnerable sectors during the peak of the strictest lockdowns to contain the virus.

Subsidies to major non-financial government corporations were slashed by ₱28.1 billion, or nearly one-third of their 2024 support, to ₱67.3 billion from ₱95.4 billion a year ago. This category remained the largest recipient, accounting for more than three-fifths of total subsidies.

Within this category and among all GOCCs, the National Irrigation Administration (NIA) posted the largest reduction. Subsidies for NIA decreased by ₱24 billion, or a third, to ₱47.2 billion in 2025 from ₱71.2 billion in 2024.

Other firms that contributed to the decline were the National Housing Authority (NHA), with subsidies dropping by more than three-fourths to ₱1.3 billion last year from ₱5.5 billion. Support for the National Electrification Administration (NEA) was also reduced to ₱1.5 billion from ₱4 billion in 2024.

Local Water Utilities Administration’s (LWUA) subsidies were eliminated in 2025.

Partially offsetting these declines was the increase in National Food Authority (NFA) subsidies to ₱14.4 billion from ₱11.3 billion.

Subsidies for other GOCCs fell by 8.2 percent to ₱39.6 billion from ₱43.1 billion in 2024, accounting for about 37 percent of total government support for the year.

The near-total elimination of subsidies for PhilHealth to merely ₱27 million—released in August last year—was the main driver of this contraction, with the government removing almost all of its ₱9.6-billion subsidy in 2024.

The move followed heightened scrutiny last year over the state health insurer’s large reserve funds and calls to rationalize government support, after the Department of Finance (DOF) transferred “excess” PhilHealth funds to the national treasury, prompting Supreme Court (SC) challenges. The SC later ruled that the transfer of PhilHealth’s excess funds to the treasury was unconstitutional and ordered the return of about ₱60 billion to the state insurer.

In 2023, PhilHealth received ₱50.7 billion, and over ₱80 billion in 2021 and 2022 at the height of the socioeconomic crises inflicted by Covid-19.

Funding for government financial institutions (GFIs) dropped to ₱509 million from ₱5.6 billion in 2024.

Under the record ₱6.793-trillion 2026 national budget, the government set aside a total of ₱264.82 billion in budgetary support to government corporations, of which ₱262.199 billion covers GOCCs’ maintenance and other operating expenses (MOOE). Capital outlays worth ₱2.621 billion account for the rest of NG support for GOCCs this year.

To recall, out of the ₱92.5-billion unprogrammed appropriations (UAs) vetoed by President Ferdinand R. Marcos Jr. from the 2026 General Appropriations Act (GAA), ₱6.895 billion represented budgetary support to GOCCs. Since UAs are not covered by regular budget financing, these can only be funded by excess or new tax and non-tax revenues, as well as foreign loans for specific projects and programs.

For 2026, the NG reinstated financial support for PhilHealth by providing ₱129.782 billion in subsidy, the biggest among all GOCCs.

The 2026 budget also allocated ₱63.247 billion in subsidies for NIA, ₱11.292 billion for NFA, and ₱10.134 billion for NEA, making them the top recipients of NG support for GOCCs this year.