CITING the need to give greater financial leeway to the Philippine Guarantee Corp. (PhilGuarantee) to perform its mandate, President Duterte exempted the government-owned and controlled corporation (GOCC) from paying dividend to the national government (NG) for fiscal years 2019 and 2020.
In his Executive Order 153, Duterte decided to adjust the rate of annual net earnings that PhilGuarantee must remit to the NG from 50 percent to zero percent during the said years. The President based his decision upon the recommendation of the Department of Finance (DOF), PhilGuarantee’s parent agency.
The order is only applicable to PhilGuarantee for CYs 2019 and 2020, the president said.
By law, specifically Republic Act 7656, GOCCs like PhilGuarantee are required to declare and remit at least 50 percent of their annual net earnings as cash, stock, or property dividends to the NG.
Duterte said his new EO will allow PhilGuarantee to better do its role of facilitating and promoting “socio-economic development through provision of credit guarantees” to priority sectors.
The issuance also aims to allow the GOCC to maintain its “capital position” and comply with regulations of the Bangko Sentral ng Pilipinas.
An agency attached to the DOF, PhilGuarantee provides “development financing” through provision of credit guarantee to the following: trade and investments; exports; infrastructures; energy; tourism; agriculture; business and/or modernization; housing; micro-scale, small and medium enterprises; and, other priority sectors of the economy and regional development.
PhilGuarantee announced last August it was able to provide guarantees to loans in the agriculture sector worth P3.5 billion during the first half of the year. The GOCC said these debts were incurred by 35,369 small farmers and fishermen.