DBP exempted from remitting earnings in 2021

MANILA, Philippines — Citing the Development Bank of the Philippines’ role in the recovery of industries hit by the COVID-19 pandemic, President Marcos issued an executive order (EO) exempting the DBP from remitting its earnings to the national government for the year 2021.

According to EO 8 signed by the President on Dec. 9, the percentage of net earnings to be declared and remitted by the DBP to the national government for Calendar Year (CY) 2021 is adjusted from 50 percent of its annual net earnings to zero percent.

“The Secretary of Finance recommended the downward adjustment... in order to support the capital position of the DBP, allow it to comply with Bangko Sentral ng Pilipinas regulations and sustain its role in the economic recovery of industries adversely affected by the COVID-19 pandemic,” the EO read.

“The adjusted dividend rate set forth in Section 1 of this Order is applicable only to the DBP for CY 2021,” the order also read.

Section 5 of Republic Act 7656, otherwise known as the Dividend Law, requires all government-owned or -controlled corporations (GOCCs) to declare and remit at least 50 percent of their annual net earnings such as cash, stock or property dividends to the national government.?

DBP’s primary function is to provide banking services to cater to the medium and long-term needs of agricultural and industrial enterprises with emphasis on small and medium-scale industries.

“The various programs of the DBP aim to address gaps in the agricultural sector and increase the resilience of the agricultural value chain in the pursuit of national food security,” EO 8 stated.

The EO also cited the DBP’s programs, which seek to provide credit support for infrastructure and logistics facilities; the micro, small and medium enterprises; environment and social services and community development, to drive immediate economic growth and recovery.?

Under RA 7656, the President, upon the recommendation of the Secretary of Finance, may adjust the percentage of annual net earnings to be declared by a GOCC “in the interest of national economy and general welfare.”