State-run firms fail to remit October dividends to National Government

MANILA, Philippines - State-run firms failed to remit dividends to the National Government (NG) in October even as the country’s fiscal authorities have been urging these government-owned and controlled corporations (GOCCs) and government financial institutions (GFIs) to put in a bigger share of their earnings to the national coffers.

Latest data from the Bureau of the Treasury showed that in October alone, the National Government did not receive a single centavo from state agencies.

In contrast, the government received P931 million in dividends from GOCCs and GFIs in October last year.

Soledad Cruz, director of the Department of Finance’s Corporate Operations Office said government agencies are still awaiting their audited financial statements from which they will base the amount of dividends they will remit to the National Government.

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 National Government.

The remittance should be in the form of cash or in real estate properties with clean titles.

Dividends form part of the National Government’s total revenues.

Despite the zero remittance in October, the January to September dividends have already surpassed the full-year dividends target of P4 billion, data from the Treasury also showed.

As of end-September, dividends amounted to P11.067 billion, higher than the P4.473 billion remitted in the same period last year.

The higher-than-expected dividends during the nine-month period came about after the Bangko Sentral ng Pilipinas remitted P6-billion 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 for 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 GOCCs.

The department has asked GOCCs and 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.

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 Finance department believes these agencies can remit more than their required share.

The budget deficit has already swelled to P266.1 billion as of end-October, already above the full-year ceiling of P250 billion.