Manila - In a move to strengthen the Development Bank of the Philippines' (DBP) capital and enhance its role in the country's socioeconomic development, President Ferdinand R. Marcos Jr. has signed an Executive Order (EO) adjusting the bank's dividend rate for the year 2022 to zero percent.
According to Philippines News Agency, signed on November 28, the decision to reduce the DBP's dividend rate from the standard 50 percent of its annual earnings comes after a recommendation by Finance Secretary Benjamin Diokno. This adjustment is intended to bolster the DBP's capital position and ensure compliance with regulations set by the Bangko Sentral ng Pilipinas (BSP). Republic Act No. 7656 typically requires government-owned or -controlled corporations (GOCCs) to declare and remit at least 50 percent of their annual net earnings as dividends to the national government. However, the President, upon the recommendation of the Finance Secretary, is authorized to modify this percentage in the interest of national economy and general welfare.
The DBP plays a crucial role in supporting agricultural and industrial enterprises, particularly small and medium scale enterprises in the countryside. Its current programs are focused on aiding the economic recovery of industries impacted by the Covid-19 pandemic and supporting initiatives to boost productivity in agriculture, thereby ensuring food security and sustainable economic growth in infrastructure and logistics.
The reduction of the dividend remittance requirement aligns with the DBP's mandate to finance projects that contribute to the national economy and general welfare. EO 28, which formalizes this adjustment, takes effect immediately, allowing the DBP to channel more resources into its developmental projects and priorities.