Question & AnswerQ&A (DOF)
The policy is that Government-Owned or Controlled Corporations (GOCCs), without impairing their viability and purposes, shall share a substantial amount of their Net Earnings to the National Government to realize additional revenues and promote fiscal discipline.
GOCCs refer to corporations organized as stock or non-stock that serve public needs, owned directly or indirectly at least 51% by the National Government, including financial institutions owned or controlled by the government but excluding acquired asset corporations, state universities, and colleges.
Dividends refer to the distribution of profits to stockholders of a corporation proportional to their shareholdings and can be in cash, shares of stock, or property. Dividends declared and remitted to the National Treasury are non-refundable.
At least fifty percent (50%) of their Net Earnings must be declared and remitted as dividends to the National Government on or before May 15 each year.
Yes, but only upon express written permission from the Secretary of Finance. Remittances in stock or property require submission of documentary requirements and approval.
GOCCs created to administer properties held in trust for members like Government Service Insurance System, Social Security System, Home Development Mutual Fund, Employees Compensation Commission, Overseas Workers Welfare Administration, and Philippine Health Insurance Corporation are excluded unless the earnings are from operations not held in fiduciary or trustee capacity.
The DOF may recommend deferral or disapproval of performance incentives of GOCC's appointive directors, and BTr shall assess a penalty charge equal to the prevailing 364-day Treasury bill rate plus five percent (5%) on the dividend due. For failure to remit stock or property dividends, immediate cash equivalent remittance is required, with additional sanctions if further defaults occur.
Upon conviction, responsible members may be fined from Ten thousand to Fifty thousand pesos or imprisoned from one to three years, or both, at the court's discretion, in addition to other sanctions.
For GOCCs directly owned by the National Government whose shares are not listed, stock dividends shall be recorded as income to the General Fund and as additional paid-up equity by the National Government to the GOCC upon DBM issuance of the appropriate document under the General Appropriations Act.
The GOCC must submit a request to the Secretary of Finance on or before May 15 of the year following the relevant dividend year with documentary requirements including board resolution, financial statements, dividend computation, corporate budget, and justifications as per Annex A.