According to the Republic Act 7656 or the “Dividend Law,” all government-owned or controlled corporations (GOCCs) are required to declare and remit at least 50% of their annual net earnings such as cash, stock, or property dividends to the national government.
“Such dividends accruing to the National Government shall be received by the National Treasury and recorded as income of the General Fund,” the law read.
Metro Manila (CNN Philippines, December 16) — President Ferdinand “Bongbong” Marcos Jr. on Friday issued an executive order (EO) adjusting the dividend rate of the Development Bank of the Philippines (DBP) for 2021.
But under Section 4 of the law, it states that percentage of net earnings may be adjusted by the President of the Philippines upon the recommendation of the Secretary of Finance and in pursuit of national interest and general welfare.
In the EO, Marcos said Finance Secretary Benjamin Diokno recommended the downward adjustment in order to support the capital position of the DBP.
EO No. 8, which was signed on Dec. 9 but made public only on Friday, states that the percentage of annual net earnings to be declared and remitted by the DBP to the national government for 2021 shall be adjusted from 50% to 0%.
“Various programs of the DBP aim to address gaps in the agricultural sector and increase the resilience of the agricultural value chain in the pursuit of national food security,” the chief executive said.
He also emphasized that adjustment will allow the capital position of DBP to comply with Bangko Sentral ng Pilipinas regulations, and sustain its role in the economic recovery of industries adversely affected by the COVID-19 pandemic.
