GOCCs’ dividend remittance bumped up to 75 percent of earnings

MANILA, Philippines — The Department of Finance (DOF) has increased the dividends to be collected from state-run firms to up to 75 percent of their earnings as the government looks for more revenues for the country’s development needs.

Finance Secretary Ralph Recto said he increased the dividend rate remittance of government-owned and controlled corporations (GOCCs) from their net earnings to 75 percent from the minimum of 50 percent.

“We are looking for ways to increase revenues without new taxes,” Recto told reporters.

The Dividends Law of 1994 mandates all GOCCs to declare and remit at least 50 percent of their annual earnings, as cash, stock or property dividends to the Treasury.

Last year, GOCCs remitted P99.98 billion in dividends to the Bureau of the Treasury.

As of April 24, dividend collections from GOCCs reached P39.8 billion, a fivefold increase from last year’s P8 billion.

GOCC dividends are sources of non-tax revenues that fund infrastructure and other social and economic programs of the government.

Based on the revised implementing rules and regulations of the law in 2016, the DOF may request GOCCs to remit above the 50 percent minimum dividend rate in the event that GOCCs have excess cash or windfall earnings.

This is provided that viability and purposes for which GOCCs have been established are not impaired.

Increasing the dividend rate aims to promote fiscal discipline and improve revenue generation efforts of the government.

Further, Recto also signed a department circular providing the guidelines to implement the special provisions of the 2024 General Appropriations Act (GAA).

This would enable the DOF to mobilize substantial non-tax revenues from GOCCs’ unrestricted fund balances to unlock the unprogrammed appropriations of the 2024 GAA to fund priority programs and projects.

Recto is also intensifying the push for the privatization of government assets, which will lead to better operational efficiency and higher investment returns.

Recto has ordered the Privatization Management Office to recalibrate its list of assets for disposal to include those in mining, construction as well as residential and commercial lots, among others.