THE Governance Commission for Government-Owned and -Controlled Corporations (GOCCs) said it supports a proposal to increase the dividend contributions of state-owned firms to 75% of their net profit from 50% currently.
“Governance Commission fully supports the joint efforts of the Executive and the Legislature to arrive at a stimulus package that provides substantial support to the economy in the midst of the pandemic, without compromising the government’s long-term debt sustainability,” the commission said in an e-mail last week.
“In these extraordinary times, the role of GOCCs as significant tools for economic development indeed becomes even more paramount,” it added.
Economic managers and legislators are currently working to finalize a third stimulus package to help the economy recover from the economic downturn. However, the Department of Finance (DoF) stipulated that any additional spending not exceed the deficit cap equivalent to 8.9% of gross domestic product.
The Department of Budget and Management has said that possible sources include early remittance of dividends from GOCCs and realignment of budget funds.
To fund the stimulus package, the DoF proposed last month to amend Republic Act No. 7656, which will increase the minimum dividend contribution of GOCCs to the National Government to 75% of earnings from 50%.
The DoF said these changes will cover the profits of GOCCs starting 2020.
BusinessWorld asked the council to comment on the impact on government revenue of the proposal but it had not responded at deadline time.
GOCCs remitted P21.44 billion in dividends to the Treasury in the first quarter of 2021. — Beatrice M. Laforga