Metro Manila (CNN Philippines, October 14) — President Ferdinand Marcos Jr. has issued an executive order allowing the Land Bank of the Philippines (Landbank) not to remit any of its net earnings last year to the national government.
Under Executive Order No. 43 signed on Oct.11 and announced on Saturday, Marcos adjusted the government-owned bank’s dividend rate from 50% to 0%.
Republic Act (RA) No. 7656 requires all government-owned or -controlled corporations to declare and remit at least 50% of their annual net earnings as cash, stock, or property dividends to the national government. The percentage may be adjusted by the president, upon the recommendation of the Finance secretary, “in the interest of national economy and general welfare.”
The EO stated that Finance chief Benjamin Diokno endorsed the downward adjustment “to support the capital position of the [Landbank], maintain its compliance with Bangko Sentral ng Pilipinas regulations on capital adequacy requirements, and expand its role in the economic recovery of industries adversely affected by the COVID-19 pandemic.\”
Marcos clarified that the adjusted rate is applicable only for 2022 earnings.
He signed the directive around a month after Landbank sent to the Bureau of the Treasury its required ₱50-billion contribution for the Maharlika Investment Fund (MIF).
Under the MIF law, the initial capital for the fund will come from the national government and Landbank at ₱50 billion each, and the Development Bank of the Philippines (DBP) at ₱25 billion.
