BSP remits P15.9 billion to government in 2021

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has remitted P15.89 billion in dividends to the national coffers last year to boost the government’s war chest against the pandemic.

The central bank remitted partial dividends of P15 billion in June last year and another P896 million in August, representing the BSP’s dividends for 2020.

This is on top of the P23 billion infused by the BSP in 2020 for its earnings in 2019. The amount was remitted in two tranches, including P20 billion in March 2020 and P3 billion in September 2020.

In all, the central bank transmitted P38.9 billion in dividends to the national government over the past two years, as part of the BSP’s extraordinary liquidity measures.

To support the country through this unprecedented crisis, the Monetary Board has decided to defer the application of BSP dividends to its capital and remit the amount to the national government.

Under its amended charter, the BSP is no longer mandated to remit its dividends to the central government.

President Duterte signed Republic Act 11211 in February 2019, amending RA 7563 or the New Central Bank Act of 1993. It allowed the BSP to raise its capitalization to P200 billion from P50 billion, to be sourced from dividends declared by the BSP in favor of the national government.

The new charter exempted the central bank from paying taxes on income derived from governmental functions.

BSP Governor Benjamin Diokno earlier said the central bank continues to keep up with the whole-of-government approach to address the global health crisis.

The BSP’s COVID measures have unleashed P2.3 trillion, equivalent to 13 percent of gross domestic product (GDP), into the financial system to keep the economy afloat amid the pandemic.

Aside from remitting dividends to the national government, the BSP extended a non-interest bearing P540 billion provisional advances to the national government that was recently reduced to P300 billion and purchased government securities in the secondary market, among others.

To boost market confidence on cost and availability of credit resources, the BSP has maintained an accommodative monetary policy stance after slashing interest rates by 200 basis points in 2020, bringing the benchmark rate to an all-time low of two percent and lowered the bank reserve requirement ratio.

The regulator also counted newly granted loans to micro, small and medium enterprises (MSMEs), as well as large corporations severely affected by the pandemic as alternative compliance to the level of deposits banks are required to keep as reserves with the central bank.

It also extended regulatory and operational relief measures to maintain stability of the financial system and ensure public access to financial services were implemented.

The BSP issued time-bound and targeted regulatory and operational relief measures to encourage BSP-supervised financial institutions to continue their support to the economy, particularly the MSME sector.