Finance Secretary Benjamin Diokno on Monday said there is “absolutely no link” between the executive order (EO) signed by President Ferdinand R. Marcos Jr. reducing the Development Bank of the Philippines’ (DBP) dividend to the national government to zero percent and the proposed DBP investment in the proposed Maharlika Investment Fund (MIF).
Diokno made this assertion after House Deputy Minority Leader France Castro on Monday said the executive order may favor the proposed MIF rather than the national budget.
“The reduction in the remittance of dividend of LBP (Land Bank of the Philippines) and DBP have been made in the past, long before the MIF was conceived, in order to improve the ability of both government banks to deliver on their mandates and, at the same time, maintain their financial standing,” Diokno explained.
President Marcos earlier ordered the reduction to support the capital position of the DBP, allow it to comply with Bangko Sentral ng Pilipinas (BDP) regulations, and sustain its role in the economic recovery of industries adversely affected by the COVID-19 pandemic.
“The grant of dividend relief aims to provide DBP with a stronger capital base in support of its mandated developmental programs,” Diokno pointed out.
The executive order notes that the DBP’s programs aim to provide credit support for infrastructure and logistics facilities; micro, small and medium enterprises (MSMEs); environment and social services; and community development, to drive immediate economic growth and recovery.
“The 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 EO read.
Under Republic Act (RA) 7656, all government-owned or -controlled corporations (GOCCs) are mandated to declare and remit at least 50 percent of their annual net earnings as cash, stock or property dividends to the national government.
The President of the Philippines, however, may adjust the percentage of annual net earnings to be declared by a government-owned and controlled corporation (GOCC), in the interest of the national economy and general welfare, according to RA 7656. #
