Metro Manila (CNN Philippines, April 27) — The Department of Finance has pitched a funding source for a possible third Bayanihan law: bumping up the required percentage of dividend remittances of government-owned and controlled corporations (GOCC) to the Treasury from their net earnings.
A DOF statement on Monday said Finance Secretary Carlos Dominguez III proposed to House Speaker Lord Allan Velasco in a letter to raise the current dividend rate of 50% to 75% after their recent meeting on sources of funding for a possible third stimulus package. Budget Secretary Wendel Avisado was also part of the meeting.
“I agree with you that fiscal stimulus measures need to be backed up by adequate revenue sources,” read Dominguez’s letter to Velasco, who earlier filed House Bill No. 8628 or the Bayanihan to Arise as One Act with Marikina City Rep. Stella Quimbo. https://cnnphilippines.com/news/2021/4/13/econ-managers-looking-for-funds-for-Bayanihan-3.html
The measure, also known as Bayanihan 3, is worth ₱420 billion and aims to give the ailing local economy a much-needed boost amid the COVID-19 pandemic and provide gravely affected sectors additional assistance.
The finance chief has consistently emphasized the amount of fiscal stimulus measures must be kept within levels wherein the country’s fiscal deficit remains manageable and not burden future generations with “unsustainable” debt servicing.
“We are continuously studying the matter and we will be providing you with an updated version as soon as available,” Dominguez’s letter read. “Let us continue to work together as we build back the best possible future for the Filipino people.”
The DOF noted that these recommendations will require amending several provisions of Republic Act No. 7656 or the Dividend Law and cover the net earnings of GOCCs beginning 2020.
The proposed Bayanihan 3 will succeed the Bayanihan 1 and 2 laws, otherwise known as the Bayanihan To Heal As One and Bayanihan To Recover As One acts, which were passed to help Filipinos cope with the immediate impact of the coronavirus health crisis.
The economy remains in recession, suffering its worst annual contraction of -9.6% in 2020, as the country deals with dampened business activity and bleak consumer confidence amid tight quarantine restrictions.
