Government-owned and -controlled corporations (GOCC) have posted record remittance that will go a long way in helping the Duterte administration hold down deficits and sustain its aggressive spending on infrastructure and human capital development, Department of Finance (DoF) Secretary Carlos Dominguez III said Friday.
Dominguez described as “remarkable financial achievement” the 54 GOCC’s combined P32 billion dividends in the January-July period alone and said it will help offset the subsidies that the government needs to shell out to other GOCC performing crucial social missions such as ensuring stable food prices and providing electrification and safe water supply to low-income communities.
The dividends are roughly P1.6 billion more or 5.2 percent higher than the P30.46 billion collected from the state-run firms for the entire year of 2017, Dominguez said.
“It is difficult to imagine our economic achievement without the tremendous contributions of our GOCCs. They have made possible mass housing, rural electrification, secure and safe water supplies for our burgeoning population, reliable mass transport and stable food prices, efficient health programs and social security services,” Dominguez said during this year’s GOCC Day held at the Rizal Hall of the Palace.
President Rodrigo Duterte received during the event a ceremonial cheque representing the dividend contributions of the GOCC for the period.
Under Republic Act No. 7656, GOCC are required to declare and remit to the national government at least half of their income as dividends.
As part of its fiscal oversight functions, the DoF is responsible for overseeing the financial sustainability of GOCC. Fiscal support such as national government guarantees on GOCC loans, advances for debt servicing and the determination and collection of GOCC dividends are also within the ambit of the DoF.
Dominguez commended the DoF’s Corporate Affairs Group led by Finance Undersecretary Antonette Tionko who, along with Assistant Secretaries Mark Dennis Joven and Soledad Emilia Cruz, “assidious[ly]” collected the dividends” from the GOCC.
The government has a total of 125 GOCC. Its newest GOCC is the Overseas Filipino Bank (OFB) which caters to the banking and financial needs of overseas-based Filipinos.
Dominguez said that because each GOCC has a unique mission, they have different management requirements and financial performance standards.
“Some, as we know, are designed to lose money and require subsidies to fulfill their missions. Others, simply, are not managed well enough. The greater number, I am happy to note, operate with such efficiency that they are able to turn in a profit and remit dividends to the national government,” Dominguez said.
Last year, total dividend remittances from GOCC reached P30.46 billion.
The top GOCC that contributed at least P1 billion in dividend remittances in 2017 were Philippine Deposit Insurance Corporation, P2.844 billion; the Civil Aviation Authority of the Philippines, P6.225 billion; the Development Bank of the Philippines, the Manila International Airport Authority, P2.251 billion; the Philippine Ports Authority, P3.103 billion; the National Power Corporation, the Bangko Sentral ng Pilipinas, P2.5 billion; Philippine Amusement and Gaming Corporation, P2.593 billion; and Philippine Charity and Sweepstakes Office, P2.535 billion. The dividend remittances of these GOCC represented 69 percent of the total dividend contributions or P22.052 billion.
In his speech, Dominguez also made special mention of the Bases Conversion and Development Authority which remitted P8.46 billion that came from the disposition of its assets in 2017 and 2018.
Dominguez urged other GOCC to strive for efficiency and practice the highest standards of corporate governance as these state-owned firms have been doing on the Duterte watch.
“Let me say that notwithstanding the diversity in the missions of our state-owned enterprises, each must constantly strive for efficiency and the highest standards of corporate governance. There should be zero tolerance for incompetence. This is, after all the expectation for all of government,” the DoF secretary said.
At the start of the Duterte administration, from July to December 2016, 13 GOCC remitted dividends for 2015 amounting to P276.52 million.