MANILA, Philippines - The Senate has asked the Development Bank of the Philippines (DBP) to study the possibility of remitting additional dividends to the National Government considering that it now has a total of P18 billion in retained earnings.
In a hearing called by the Senate committee of finance yesterday, Sen. Franklin Drilon urged the state-owned bank to help out the National Government which is facing a challenge of finding additional revenues from non-tax sources.
As required by the law, DBP remits 50 percent of its net earnings to the National Government. Drilon has suggested that DBP turn over up to P10 billion from its retained earnings.
According to outgoing DBP chairwoman Patricia Sto. Tomas, the bank has accumulated around P18 billion in retained earnings over a period of more than 10 years. Sto. Tomas, who was recently replaced by Jose Nuñez Jr. as chairman of the board, said she would ask to convene the board in order to discuss the proposal of the Senate.
Drilon said the committee on finance, through the Senate President, would make a formal request to the DBP for the remittance of additional dividends for the National Government.
“Given that you have P18 billion in retained earnings, you may consider declaring special dividends for government,” Drilon said.
“We were able to convince Bangko Sentral to declare additional P9.3 billion (in dividends). You can top it by declaring P10 billion,” he added.
After Drilon recently made public the report of the Commission on Audit about the BSP’s unremitted dividends amounting to P16.5 billion accumulated from 2003 to 2006, the BSP has agreed to settle the amount through an additional remittance of P9.312 billion.
“This will significantly reduce the budget shortfall and will help in the President’s program of improving the economy without imposing new or additional taxes,” Drilon said.
DBP corplan, budget and special projects head Benedicto Bitonio Jr. said this could be done but would have an impact on the capital adequacy ratio of the bank.
“But as far as I know, at this point we can,” Bitonio said.
Sto. Tomas, acknowledged that the DBP has an obligation to help out the National Government as a 100-percent state-owned financial institution.
“I’m sure we all recognize that the government is the sole stock holder of the DBP and there is no reason why we shouldn’t help National Government in this one,” she said.