PRRD adjusts dividend rates of state-owned banks

FILE: President Rodrigo Roa Duterte at the IEC Convention Center in Cebu City on May 1, 2018. RICHARD MADELO/PRESIDENTIAL PHOTO

MANILA — President Rodrigo Duterte has signed an executive order adjusting the percentage of net earnings to be declared by the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP).

Executive Order 89, signed by Executive Secretary Salvador Medialdea by the authority of the President on Aug. 28, reduces the dividend rate of LBP and the DBP, which are categorized as government-owned or controlled corporations (GOCCs).

“To support the viability and the mandate of the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP), their liquidity, capital position, medium-term plans and programs were considered in the determination of their respective reasonable dividend rates on net earnings for the selected years,” the EO read.

All GOCCs are required to declare and remit at least 50 percent of their annual net earnings as cash, stock or property dividends to the national government.

EO 89 reduces the dividend rate of Land Bank from 50 percent to zero percent for 2016 and 50 percent to 10 percent for 2017.

On the other hand, DBP’s dividend rate was reduced from 50 percent to zero percent for 2017.

Under the EO, the adjusted dividend rates set forth only apply to the concerned GOCCs and the years stated.

Earlier, the Department of Finance recommended the downward adjustment of the percentage of the selected years’ net earnings that must be declared by the LBP and the DBP as dividends to the national government.