MANILA, Philippines - Dividends remitted by state-owned, controlled corporations and government financial institutions reached P23.4 billion in the first half, already exceeding last year’s P18.9-billion full year total.
Data from the Department of Finance showed that Land Bank of the Philippines remitted the biggest amount to the national treasury amounting to P6 billion followed by the Philippine Amusement and Gaming Corp. with P4 billion.
Other major contributors include the Development Bank of the Philippines (P2.9 billion), Philippine National Oil Co.-EC (P1.5 billion), Philippine Ports Authority (P1.4 billion), Philippine Reclamation Authority (P1.3 billion), Manila International Airport Authority (P1.1 billion) and Power Sector Assets and Liabilities Management Corp. (P1 billion).
GOCCs are required to declare and remit at least half of their annual net earnings as cash, stock or property dividends to the National Government under Republic Act No. 7656.
Net earnings refer to income derived from all sources, whether exempt or subject to tax, net of deductions allowed under the Tax Code and income tax and other taxes paid on them.
GOCCs that administer real or private properties or funds held in trust for the use and benefit of their members such as the Government Service Insurance System, Employees Compensation Commission, Home Development Mutual Fund, Philippine Medical Care Commission and Overseas Workers Welfare Administration are exempted from the dividend obligation.
According to the Governance Commission for GOCCs, the number of state-owned firms that declared dividends increased to 50 last year from 38 in 2012.
By contributing hefty dividends, GOCCs help augment the country’s budgetary requirements for social and economic services.
While GOCCs contribute to expand government earnings, their operations also constitute expenditures for the government. Since these firms are created to protect public welfare, they are entitled to government financial support in the form of subsidies, equity infusion and lending.
With some GOCCs requiring significant amount of unconditional guarantees that onstitute a heavy drain on the public sector’s finances.