Hike dividend payouts of GOCC, Gullas urges (Sabong News)

A member of the House Committee on Appropriations on Sunday said President Duterte may increase the dividend payout by government-owned or -controlled corporations (GOCCs) to help fund the Bayanihan 3 bill. In a statement, Cebu Rep. Eduardo R. Gullas said the President has the power to increase the dividend payout by GOCCs under Republic Act (RA) 7656. “Right now, under the law, GOCCs are required to declare cash dividends and remit to the national treasury at least 50 percent of their (prior year’s) net earnings,” said Gullas. “However, under the same law, the President, upon the recommendation of the Secretary of Finance, may increase the dividend payout to any rate higher than 50 percent for all covered GOCCs,” he added. Speaker Lord Allan Jay Q. Velasco is pushing for the passage of his proposed bill seeking P420 billion for a Bayanihan 3 program. The proposal is seen as a “lifeline” amid the raging pandemic that continues to cripple the economy and hurt the livelihood of millions of Filipinos. The Bayanihan 3 seeks the following: funding for social amelioration for households; capacity-building assistance for badly affected businesses in critical economic sectors; aid for farmers; wage subsidies for workers in small businesses; grants to displaced workers; Internet access allowances for students and teachers; Covid-19 treatment and vaccines; and, rehabilitation of communities distressed by recent typhoons and floods. Velasco has earlier said that economic managers are still studying potential funding sources for . Also, House Committee on Economic Recovery Cluster co-chairman Joey Sarte Salceda said funding for the Bayanihan 3 can be sourced from “obese” GOCCs and other tax measures. Salceda said they are now working with economic managers to find ways to craft “deficit neutral” lifeline measures under the proposal. Gullas said a number of GOCCs are still making good money amid the economic and health crises. “[They] are in a position to pay out incremental dividends to the national treasury,” Gullas said. He cited the case of the Bangko Sentral ng Pilipinas (BSP), which has been swamped by private corporations applying and paying for new licenses to establish digital banking and electronic money platforms, amid the dramatic shift to online transactions. A total of 57 GOCCs paid an aggregate P157 billion in cash dividends to the national treasury in 2020, according to the Department of Finance. The top 15 dividend contributors included the following: BSP (P40.53 billion); Philippine Deposit Insurance Corp. (P17.98 billion); Philippine Amusement and Gaming Corp. (P17 billion); Tourism Infrastructure and Enterprise Zone Authority (P12 billion); and, the Civil Aviation Authority of the Philippines (P6 billion). Other top contributors were: the Manila International Airport Authority (P6 billion); Philippine Ports Authority (P5.05 billion); Philippine National Oil Co. (P5 billion); Philippine Reclamation Authority (P4.4 billion); and, the National Power Corp. (P4 billion). The other contributors were Philippine Charity Sweepstakes Office (P2.27 billion); PNOC Exploration Corp. (P2 billion); Philippine Economic Zone Authority (P2 billion); Bases Conversion and Development Authority (P1.17 billion); and, Clark Development Corp. (P1.13 billion). SALCEDA noted that the Philippines should maximize the investment grade credit rating of BBB+ with a “stable” outlook by Japanese debt watcher Rating and Investment Information Inc. (R&I) to the Philippines. He said that given this rating, an ambitious vaccination program and a recovery package with incentives for “health-affirming behavior” through Bayanihan 3 will further strengthen the country’s prospects. “This is a crucial vote of confidence. It also indicates that we have some room for fiscal maneuver,” Salceda said. “We can afford a more ambitious vaccination and relief program, through Bayanihan 3.” Earlier this month, the lawmaker said the dividend remittances of GOCCs should be increased to 75 percent from 50 percent, and that new taxes on Philippine Offshore Gaming Operators and e-sabong (online cockfights) should be passed. SALCEDA added that “we can keep our credit ratings strong if we pass fiscal reforms that help us pay for debt in the future.” “That’s why we’re working with the DOF to curb smuggling and tax abuse through administrative regulations. We are also working with them to pass the remaining packages of tax reform, which I think we can still do before 2022,” Salceda said. “Debt now is interest and principal payments in the future. So, we have to be careful, only borrowing what we can confidently pay. At the same time, we can borrow more now if we prepare the reforms needed to help pay our borrowings. As long as the reforms are strong, we will be alright,” the lawmaker explained. Salceda said the credit rating affirmations make him more confident that government can finance the P141-billion direct appropriations under Bayanihan 3. “We need to extend cash aid because it helps people stay home and comply with COVID standards. I also suggested that we give cash incentives for getting vaccinated, because it will cost you one or two days of queuing and rest,” Salceda explained. “Bayanihan 3 is of course, not yet stimulus. I think stimulus should come after we can go out already. We just really need a lifeline, a , until mass vaccination,” he added. “In 2022, we should continue to go big with infrastructure and stimulus. The impact of stimulus will really come once we achieve herd immunity. So, I welcome this credit rating affirmation. It means we can afford to go big,” Salceda said.