Among the recent fiscal issues that have come up after the sustained attack against the newly enacted budget or General Appropriations Act (GAA) 2025 is the clamor against the remittance of the Philippine Deposit Insurance Corp. (PDIC) to the Bureau of the Treasury (BTr) of P107.2 billion to help finance some unprogrammed appropriations.
I checked some numbers of government-owned and -controlled corporations (GOCCs) at the Budget of Expenditures and Sources of Financing (BESF). Sources of funds of GOCCs are equity and subsidy from the National Government, corporate borrowings, and corporate funds. Uses of funds are general administration and support (GAS), support to operations, operations, and projects.
Those under the Department of Finance (DoF) with high available balances (sources minus uses) are the Development Bank of the Philippines (DBP), the Land Bank of the Philippines (LANDBANK), and the PDIC. Earlier, DBP and LANDBANK resources had been remitted for the initial funding of the Maharlika Investment Fund.
The Power Sector Assets and Liabilities Management Corp. (PSALM) under the Energy department also has a large available balance yearly, but only about half of PDIC’s. The Philippine Health Insurance Corp. (PhilHealth) had no available balance in 2024 (see Table 1).
Tapping PDIC’s excess funds for some government expenditures is a good move, for four reasons. One, the P107 billion is equivalent to its available balance for 2022 and 2023 alone. Two, it is less than the Deposit Insurance Fund (DIF) requirement in 2023 of P187 billion, derived as the DIF ratio 5.5% multiplied by total insured deposits of P3.4 trillion. Three, the assurance from PDIC President Roberto Tan that the DIF “remains adequate to cover risks in the banking system in case of insurance calls.” And, four, tapping excess funds of financially stable GOCCs is a lot better, far superior, to raising taxes or raising additional borrowing.
So, I support the DoF and the Department of Budget and Management (DBM) in tapping the PDIC excess funds. The same way that I supported their move to tap excess funds of PhilHealth (funds that came from taxes paid by smokers, vapers and drinkers of alcohol and sugary beverages, not from direct contribution of members).
If there is one thing that I wish the DoF and DBM would do, or that President Ferdinand Marcos, Jr. would push, is to have an across-the-board spending cut, targeting a budget balance, and significantly reducing the public debt stock, reducing interest payments.
I want to see spending cut from infrastructure, foreign aid-funded projects, and social services like the budgets of state universities and colleges (SUCs) including UP. The SUCs budget has been jumping up, from P67 billion in 2019 to P81 billion in 2021, P107 billion in 2023, and P133 billion in 2024 — which is double its budget just five years earlier.
Much of the infrastructure — roads, airports, seaports, power plants, etc. — are now financed and constructed by private corporations via public-private partnership (PPP). The user-pay principle is a lot superior to the all taxpayers-pay principle.
Education, healthcare, and household welfare should first and foremost be personal and parental responsibilities, not the government’s responsibility. Government should still help, but be limited to primary and secondary education, limited to infectious diseases and not compromised with non-infectious diseases because these result in bottomless health spending. Plus, local governments units (LGUs) are putting up their own hospitals, their own universities, their own social welfare programs, and they always have a budget surplus while the National Government (NG) always has a budget deficit.
There was some good news in public finance in 2024: revenues in January-November were higher than in the full-year 2023 while expenditures were controlled. This led to a lower deficit, although it was still above P1 trillion, and borrowings are below P2 trillion (see Table 2).
We should sustain this momentum. A lot of the criticism made by various NGOs and pressure groups about the GAA 2025 is that their favored sectors — like healthcare and education — did not get more money than they wished. They wanted more health and education socialism and are not interested in fiscal balance, nor in asserting personal and parental responsibility in how people run their lives. They hate the legislators and want the endless dependence of the people on the government, which is run and fund-appropriated by the politicians they hate. There is irony and hypocrisy there.
To remove the irony, people should demand less public spending and borrowing, less taxation and regulations, and more money in their pockets to finance their household needs, to do more philanthropy for needy people.
Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.
