State-run corporations only remitted a tenth of dividends

Posted on May 25, 2015

STATE-RUN corporations only remitted about a tenth of government dividends to the National Treasury in 2013, the Commission on Audit (CoA) said, adding that uncollected amounts have reached P51.5 billion.

State auditors pressed the Bureau of the Treasury (BTr) to firm up its collection strategy among 174 government-owned and -controlled corporations (GOCCs) for gross undercollections, as they found that only P6.27 billion, or a mere 11% P57.82 billion of dividends, were remitted that year.

Several GOCCs receive yearly subsidies from the national government. These state corporations, in turn, are required to remit 50% of its annual earnings to public coffers as provided by law.

However, of the 219 profitable GOCCs, only 45 remitted the full 50% share to the treasury, leaving 174 other state-run firms to account for the billions of unremitted government shares, which reached more than P50 billion.

“It must be pointed out that the non-remittance of dividends pursuant to RA (Republic Act) 7656 has been raised in our previous audit reports. This indicates that the remediation implemented by the Bureau to ensure compliance to such law was ineffective,” the auditors said in the report. “This deprived the government the use of such dividends to fund its programs and projects.”

The CoA likewise asked the BTr to go after some P18 billion of unremitted dividends from the Philippine Amusement and Gaming Corp. (PAGCOR) after noting low remittances from 2011 to 2013.

Of the P56 billion in national government shares, the casino operator only remitted P38 billion, leaving a balance of P18 billion for three years.

The auditors also recommended for the National Treasury to recompute the dividend shares due from PAGCOR since its creation in 1977 to ensure that government shares have been fully collected.

However, alongside remittances, state auditors found that subsidy releases for GOCCs exceeded the allocations under the 2013 national budget by nearly double the programmed funds.

That year, P44.7 billion was earmarked for state-run corporations. Actual releases, however, were recorded at P71.9 billion.

Under releases of P12.3 billion were likewise noted for GOCCs that year, the CoA said.

“Based on the foregoing observation, it seems that control measures are not in place to prevent releases in excess of the programmed appropriations for budgetary support for GOCCs,” the CoA said, adding that the Treasury and the Budget department should show the legal basis for the release of additional subsidies apart from the budgetary allocations. -- Melissa Luz T. Lopez