MANILA – President Ferdinand R. Marcos Jr. has issued an Executive Order (EO) adjusting the dividend rate of state-run Development Bank of the Philippines (DBP) for 2022 to strengthen its capital position and comply with central bank’s regulations.
Marcos signed EO 48 on Nov. 28, approving Finance Secretary Benjamin Diokno’s recommendation to cut the DBP’s rate to zero percent from the current 50 percent of its annual earnings.
“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 (calendar year) 2022 is hereby adjusted from 50 percent of its annual net earnings to zero percent,” EO 28 said.
Diokno recommended the downward adjustment of the percentage of DBP’s net earnings to strengthen its capital position, comply with 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 authorizes the President, upon the recommendation of the Finance Secretary, to 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.
EO 28 takes effect immediately. (PNA)