President Ferdinand R. Marcos Jr. issued last Tuesday, November 28, Executive Order No. 48 adjusting the dividend rate of the Development Bank of the Philippines (DBP) for calendar year 2022 to strengthen its capital position and comply with central bank’s regulations.
“Pursuant to Section 5 of RA (Republic Act) No. 7656, and in the interest of national economy and general welfare, the percentage of net earnings to be declared and remitted by the DBP to the National Government for CY 2022 is hereby adjusted from fifty percent of its annual net earnings to zero percent,” read the EO signed by Executive Secretary Lucas Bersamin.
Finance Secretary Benjamin Diokno recommended the downward adjustment of the percentage of DBP’s net earnings to be declared as dividends to the National Government for 2022 to strengthen its capital position, comply with the Bangko Sentral ng Pilipinas (BSP) regulations, and augment its role in the provision of crucial resources to priority sectors for the country’s overall socioeconomic development.
Under RA No. 7656, all government-owned or -controlled corporations (GOCCs) are required to declare and remit at least 50 percent of their annual net earnings as cash, stock, or property dividends to the national government.
However, section 5 of RA 7656 provides that the President, upon the recommendation of Finance Secretary, may adjust the percentage of annual net earnings to be declared by a GOCC, in the interest of national economy and general welfare.
The DBP was created by law to address the medium and long-term needs of agricultural and industrial enterprises, particularly in the countryside, and preferably the small and medium scale enterprises.
Current DBP programs aim to further aid the economic recovery of distressed industries adversely affected by the COVID-19 pandemic and financially support key efforts in enhancing productivity in the agricultural sector to ensure food security and accelerate sustainable economic growth for infrastructure and logistics facilities.
The lowering of the dividend remittance requirement was ordered in furtherance of the said mandate to support projects for the national economy and general welfare. | PND