PRRD inks EO adjusting dividend rate of Overseas Filipino Bank

MANILA – President Rodrigo Duterte has signed an executive order (EO) adjusting the dividend rate of the Overseas Filipino Bank (OFBank).

Signed on August 5 and made public on Friday, EO 146 approves the adjustment of the percentage of annual net ratings to be declared and remitted by the OFB from 50 percent to zero for the calendar year 2016.

According to the EO, Finance Secretary Carlos Dominguez III recommended the downward adjustment of the 2016 dividend rate to zero in order to support the capital position of the OFBank and allow it to comply with Bangko Sentral ng Pilipinas (BSP) regulations.

The adjustment of the mandatory dividend contribution would also support the bank’s short- and long-term plans and programs for Filipinos overseas, in the interest of national economy and general welfare.

The EO complies with Republic Act 7656, which provides that the President, upon the recommendation of the Secretary of Finance, may adjust the percentage of annual net earnings to be declared by a government-owned and -controlled corporation (GOCC), in the interest of national economy and general welfare.

Under RA 7656, 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.

The OFBank did not declare and remit dividends amounting to PHP43.083 million for CY 2016 notwithstanding the approval of the President on the adjustment of the dividend rate to zero.