National Government orders GOCCs to hike dividend remittances by 20%

Government-owned and controlled corporations (GOCCs) will be required to increase their cash dividend remittances to the National Government from 50 percent to 70 percent.

The 20-percent increase in cash dividend remittances is part of government’s efforts to raise revenues to keep this year’s budget deficit of P145-billion in check.

Keeping the budget deficit within programmed target is being required by the country’s creditors such as the World Bank and the International Monetary Fund.

At the same time, international credit rating agencies also want to see government succeed in staying within the deficit target since this will largely influence their decision to reconsider their outlook of the country’s creditworthiness in the international debt market.

Despite improvements on the political front, several international credit rating agencies such as Moody’s Investor Service maintained their negative outlook on the country’s sovereign ratings.

For the first four months this year, the budget deficit has already widened to P38.7 billion, or about P500 million more than the programmed deficit for the period.

Aside from borrowing from the international debt market and implementing other revenue-enhancing measures, the Department of Finance (DOF) also intends to raise cash dividends being turned over the national coffee by GOCCs.

The government is also speeding up the privatization of its stake in GOCC’s. This year alone, it projects revenues from privatization to reach P17 billion.

Government has prioritized the privatization of its stake in power distributor Manila Electric Co. (Meralco) broadcasting network IBC-13, tollway operator Philippine National Construction Corp. (PNCC) and several properties of International School and Muslim-bank, Amanah Bank.

Government is also implementing an austerity program this year which includes among others: generation of savings equivalent to 10 percent of non-personal services expenditures of government agencies, GOCCs and government financing institutions based on the 2000 budget or corporate operating budget, and scaling down or discontinuing low priority programs, activities and projects. – Rocel Felix