State firms remit P11.4B in 10 months

MANILA, Philippines - Dividends remitted by state-run firms and government financial institutions (GFIs) inched up three percent in the first 10 months of the year on the back of stable earnings as the domestic economy recovers, the Bureau of Treasury reported over the weekend.

Data showed that dividends infused by government-owned and controlled corporations (GOCCs) to the national coffers reached P11.391 billion from January to October this year, P323 million higher than the P11.068 billion infused by government-run companies in the same period last year.

Major contributors include the Bangko Sentral ng Pilipinas (BSP), Development Bank of the Philippines (DBP) and the government’s investment arm National Development Co. (NDC).

The BSP is set to remit over P9 billion worth of dividends to the National Government this year. It has already remitted P4.475 billion last July and would remit another P4 billion once the Commission on Audit (COA) complete the review of the central bank’s financial statement.

The BSP’s net income jumped 47 percent to P13.16 billion in 2009 from P8.93 billion in 2008 due mainly to the large increase in miscellaneous income, accompanied by a decrease in interest expenses. It booked P9.67 billion worth of foreign exchange losses last year in light of the sharp appreciation of the peso against the dollar.

In 2008, the BSP posted an unaudited income of P8.93 billion from a loss of P86.94 billion in 2007 due mainly to a huge turnaround in the proceeds of its foreign exchange trading operations. It realized foreign exchange trading gains of P530 million in 2008 from a record loss of P113.7 billion in 2007 due mainly to the weakening of the peso against the greenback.

The BSP is mandated by Republic Act 7653 or the New Central Bank Act of 1993 to adhere to a market-oriented foreign exchange rate policy such that the role of the central bank is principally to ensure orderly conditions in the market. It intervenes in the market when the peso appreciates or depreciates sharply to smoothen the foreign exchange movement.

Likewise, BSP’s assets rose 9.5 percent to reach P2.566 trillion last year from P2.344 trillion in 2008 mainly due to the steady build-up in international reserves. The P222 billion rise in its assets was due to the P264.8 billion increase in its international reserves arising from the central bank’s foreign exchange operations and receipts from investment income abroad that accounted for about 80 percent of the total assets.

Furthermore, the higher asset balance was likewise attributed to the P16.5 billion rise in loans and advances.

Likewise, the BSP’s liabilities posted a double-digit increase of 10.6 percent to P2.327 trillion in 2009 from P2.103 trillion in 2008 arising from higher balances in its deposit liabilities.

The BSP charter mandates the central bank to remit 75 percent of its earnings while RA 7656 mandates GOCCs and GFIs to declare and remit at least 50 percent of annual net earnings as cash and stock or property dividends to the government. 

The government is targeting to raise P6.5 billion in dividends from state-owned firms this year but already breached the target as early as July.

The Philippines is staring at a record budget deficit of P325 billion or 3.9 percent of gross domestic product (GDP) from P298.5 billion or a similar 3.9 percent of GDP last year.

Latest data from the Department of Finance (DOF) showed that the country’s budget deficit widened by 1.6 percent to P270.3 billion in the first 10 months of the year from P266.1 billion in the same period last year. The amount was, however, P22.5 billion lower than the ceiling of P292.8 billion the January to October period.

Government revenues inched up 7.3 percent to P993.2 billion in the first 10 months of the year, from P925.4 billion in the same period last year while expenditures went up six percent to P1.263 trillion from P1.191 trillion.