State firms remit P8.5 billion in dividends to government

MANILA, Philippines - Dividends remitted by state-run firms to the government stood at P8.505 billion in the first seven months of the year, boosted by the P7.740-billion remittance in July alone.

Dividends in June amounted to only P10 million while the January to June dividends stood at only P765 million.

The Department of Finance (DOF) has been urging government agencies to remit more dividends to the government – more than the mandatory 50 percent of their yearly income if possible – to help raise funds for public spending which in turn, could help cushion the country against the negative impact of the global economic slowdown.

Under Republic Act 7656 or the Dividends Law of 1994, government owned and controlled corporations (GOCCs) and government financial institutions (GFIs) are required to remit half or 50 percent of the income earned in each fiscal year to the government. The remittance should be in the form of cash or in real estate properties with clean titles.

Dividends form part of the government’s total revenues. From January to July, total revenues of the government reached P644.100 billion, of which revenues from taxes amounted to P599.170 billion and non-tax revenues, P74.843 billion.

The government has been stepping up efforts to improve its finances amid a widening budget deficit. Dividends from state-run agencies and GFIs have been formed part of revenues but the Finance department believes these agencies can remit more than their required share.

This year, the government hopes to contain the budget deficit at P250 billion, revised from an earlier projection of P199 billion.

From January to July, the budget deficit has already swelled to P188.4 billion or 462.5 percent more than the P33.4- billion deficit recorded in the same period last year.

In July alone, the budget gap rose by 124.4 percent from the P15.4 billion recorded a year ago, latest data from the DOF showed.