The paper looks into the profile of the AFP commissary stores and the PNP service stores benefited by tax subsidy and evaluates the effects of said subsidy on the operational efficiency of commissary outlets and service stores to their intended beneficiaries. It finds that the continuing grant of tax subsidy to AFPCES and PNPSSS enables their respective outlets to sell their products/items at much lower prices than private/commercial outlets/stores and allows them to establish more outlets in far-flung areas. On the other hand, it notes the leakages and/or abuses in the operationalization of said outlets and stores which include the enjoyment of non-member-beneficiaries of the PX privileges intended only for member-beneficiaries, and the absence of a monitoring scheme to determine whether the purchases by member-beneficiaries are within the prescribed ceiling.