COA: GOCCs owe gov't P59.6 B in net income shares

MANILA, Philippines - The Commission on Audit (COA) reported that many government-owned and controlled corporations (GOCCs) have failed to remit to the government some P59.611 billion in net income shares that the Bureau of Treasury (BTr) had not collected since 2008.

More than P9.669 billion of the amount cover uncollected dividends from the Philippine Amusement and Gaming Corp. (Pagcor), which have remained outstanding for 18 years.

COA said the BTr’s failure to collect the government’s share in the net earnings of GOCCs is depriving the state of “available financial resources needed to fund its programs.”

State auditors explained that under Republic Act 7656, state-owned corporations are required to declare and remit 50 percent of their annual net earnings as cash, stock or property dividends to the government as income that will go to the General Fund.

The audit team explained that “net earnings,” as defined by law, refer to income derived from whatever source, whether exempt or subject to tax.

Records showed that in 2008, various GOCCs did not remit P23.738 billion in dividends and only P978 million was collected out of the P24.770 billion that was supposed to be received by the BTr.

In 2009, only 11.025 billion of the P26.436 billion was remitted to the government, leaving a balance of more than P15.410 billion.

The COA report said uncollected dividends covering prior years fell at P10.418 billion, P9.669 billion of which cover uncollected dividends from Pagcor from 1993 to 2008.

“The consolidated balance of dividends due from GOCCs, as reported in the last two Consolidated AARs (Annual Audit Reports), with the balance of dividends payable for 2009, totaled P59,611.442 billion,” state auditors said.

The COA report said a total 78 GOCCs with 37 subsidiaries are expected to remit dividends to the national government based on their Statement of Net Earnings except those with net losses.

Records showed that in 2009, the BTr sent billings to only 45 state-owned corporations, including seven which had audited net losses.  

“We recommended that the BTr bill all GOCCs with net income and initiate the prompt collection of unpaid dividends for CY (Calendar Year) 2009 and prior years from the GOCCs concerned to augment the financial resources of the (national government) for its priority programs,” COA said.

So far, for 41 GOCCs that were released subsidies and or equities last year, the audit team said only five firms remitted dividends of P67.094 million, which is only 0.56 percent of the total of P8.867 billion due them for 2009, thus leaving a balance of P8.799 billion.

COA has not yet computed the dividends that were not remitted in 2010 because all needed audited statements of income are not yet available for study and scrutiny.

GOCCs became controversial during the first few months of the Aquino administration after it was discovered that some of the state firms’ officials had been enjoying very high salaries coupled with lavish perks and privileges.

President Aquino issued Executive Order 24 which placed a cap on the salaries and incentives of top officials of state-owned corporations and government financing institutions (GFIs).

The government said the order sought to “address deep concerns on the excessive and unreasonable pay and perks” of board members and trustees of GOCCs and GFIs.