President Ferdinand R. Marcos Jr. has signed an executive order (EO) adjusting the percentage of net earnings to be declared by the Development Bank of the Philippines (DBP).
According to the EO signed December 9 by the President, the percentage of net earnings to be declared and remitted by the DBP to the national government for Calendar Year 2021 is adjusted from 50 percent of its annual net earnings to zero percent, pursuant to Section 5 of Republic Act No. 7656.
R. A. 7656, otherwise known as the Dividend Law, requires all government-owned or -controlled corporations (GOCCs) to declare and remit at least 50 percent of their annual net earnings such as cash, stock or property dividends to the national government.
Based on the law, the President, upon the recommendation of the Secretary of Finance, may adjust the percentage of annual net earnings to be declared by a government-owned and controlled corporation (GOCC) “in the interest of national economy and general welfare.”
The finance secretary has recommended the downward adjustment of the percentage of the net earnings that shall be declared by the DBP as dividends to the National Government for the Calendar Year 2021, as what the law provides.
“The Secretary of Finance recommended the downward adjustment… in order to support the capital position of the DBP, allow it to comply with Bangko Sentral ng Pilipinas (BSP) regulations, and sustain its role in the economic recovery of industries adversely affected by the COVID-19 pandemic,” the President’s EO read. OPS