State-run National Transmission Corp. (Transco) plans to remit the company’s entire profit to the government’s coffers to help fund the country’s coronavirus response programs, the Department of Finance (DOF) revealed.
In a statement, the finance department said on Tuesday, July 13, that Transco will secure the approval of its board to comply with the DOF’s directive increasing the dividend remittance of the company for 2020 to 75 percent of its net earnings.
But instead of just 75 percent, Melvin Matibag, Transco president and chief executive officer said in his letter to Finance Secretary Carlos G. Dominguez III that they are “even open” to shell-out 100 percent of its net income last year for COVID-19 response.
“Transco supports the DOF in its revenue generation efforts for the government’s programs to alleviate the impact of the COVID-19 pandemic, and in fact, it is exploring the possibility of remitting 100 percent from the 2020 net earnings,” said Matibag in his letter to Dominguez.
Transco earlier remitted to the Bureau of the Treasury the amount of P8.32 billion, representing 50 percent of its net earning from 2016 to 2019, to help augment the government’s COVID-19 response fund.
Under Republic Act (RA) No. 7656 or the Dividends Law, all government-owned and -controlled corporations (GOCCs) are required to declare and remit at least 50 percent of their annual net earnings as cash, stock or property dividends to the national government.
For 2020, Transco’s dividend remittance at 50 percent of its net earnings was computed to amount to P1.63 billion.
Under Dominguez’s order for Transco to remit 75 percent of its 2020 net earnings on or before June 15, the firm’s dividend contribution will increase to P2.45 billion.
In his letter, Matibag said that for Transco to be able to comply with Dominguez’s order, it will have to seek the approval of its Board for an additional budget of P817.1 million for 2021 to cover the increase in the dividend amount to 75 percent.
“Once the Board approval is secured, Transco will request for the approval of the additional budget from the DBM (Department of Budget and Management) to support the dividend remittance to the National Government,” Matibag said.
From January 1 to May 31 this year, the total remittances of GOCCs reached P31.38 billion, topped by the P8.32-billion contribution of Transco, according to the DOF’s Corporate Affairs Group.
The other top dividend contributors were the Philippine Deposit Insurance Corp. with P7.1 billion; Philippine Amusement and Gaming Corp., P4 billion; Philippine Ports Authority, P3.76 billion; as well as Bases Conversion and Development Authority., P1.56 billion.
Moreover, Subic Bay Metropolitan Authority, P1.21 billion; and the PNOC Exploration Corp., P1 billion have remitted dividends.