THE CENTRAL BANK remitted P15 billion in advanced dividends to give the government liquidity amid the prolonged crisis.
“Extraordinary liquidity measures were undertaken. These include purchases of government securities in the secondary market, remittance of P35 billion in advance dividends, and provisional advances to the National Government,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said in a speech on Tuesday.
Mr. Diokno said in a Viber message that they remitted the additional P15 billion last month.
“[The] BSP is committed to sustaining a sound financial system conducive to a strong and inclusive economic recovery,” Mr. Diokno said.
Government-owned and -controlled corporations are required by law to remit half of their profits to the Bureau of the Treasury. However, the New Central Bank Act lets the BSP use these dividends for its capitalization.
In March 2020, the BSP also remitted P20 billion in advanced dividends to the National Government to support its coronavirus pandemic response.
The BSP’s move to remit dividends this year is a welcome development as the country continues to face the crisis, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said.
“I think this is one of those extraordinary measures during extraordinary times. It is also delivering on what Mr. Diokno has consistently said during this once-in-a-lifetime pandemic crisis that the BSP will support government all the way,” Mr. Asuncion said in a Viber message.
In July, the BSP for the fourth time extended a P540-billion short-term, no-interest loan to the National Government, which Mr. Diokno called “bridge financing.” It is expected to be repaid in October.
The central bank earlier said they are willing to extend direct advances to the government and keep benchmark rates low “for as long as necessary” to support economic recovery. — L.W.T. Noble