State-run firms remit P11 billion in dividends to government

MANILA, Philippines - Dividends remitted by state-run firms to the government rose to P11.067 billion in the first nine months of year, already surpassing the full-year target of P4 billion, Finance Undersecretary Jeremias Paul Jr. said yesterday.      

The remittance during the nine-month period also exceeded the amount recorded   in the same period last year amounting to P4.473 billion.     

Paul attributed the higher-than-expected dividends during the   nine-month period to the P6-billion remittance by the Bangko Sentral ng Pilipinas (BSP) in July for its 2008 income. 

The BSP remitted P6 billion in dividends in July after posting a net   income of P8.93 billion last year, a turnaround from a loss of P87 billion in 2007. The country’s chief monetary authority incurred losses in 2007, mainly from its foreign exchange transactions.

The last time the BSP remitted dividends was in 2006 when it posted an income of P3.7 billion.     

The rest of the amount for the nine-month period – amounting to   P5.067 billion – came from other government-owned and controlled corporations (GOCCs).     

Aside from the P6 billion remittance of the BSP, Paul said the Department of Finance (DOF) has been urging government agencies to remit more dividends to the government.     

Finance Secretary Margarito Teves said the DOF has asked GOCCs   and government financial institutions (GFIs) to remit more than the   mandatory 50 percent of their yearly income 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, GOCCs and 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.

The government has been stepping up efforts to improve its finances on the back of a widening budget deficit. Dividends from state-run agencies and GFIs have formed part of revenues but the DOF 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.

However, the budget deficit has already reached P237.5 billion from January to September or 345 percent more than the P53.4 billion deficit incurred in the same period last year and just P12.5 billion shy of the full-year target.

In September alone, the deficit hit P27.5 billion, or 27.2 percent, more than the P21.6 billion deficit incurred in the same month last year.