Duterte cuts dividend rate of Overseas Filipino Bank

Published August 6, 2021, 5:49 PM

by Genalyn Kabiling

The Overseas Filipino Bank (OFBank) does not have to remit dividends from its 2016 earnings to the national government after President Duterte issued an order cutting its dividend rate.

President Rodrigo Duterte (File photo/Malacañang)

Under Executive Order No. 146, the President adjusted the percentage of net earnings to be remitted by the OFBank from 50 percent of its annual net earnings to 0 percent.

“The adjusted dividend rate set forth in Section 1 of this Order is applicable only to the OFBank for CY 2016,” the order read.

The downward adjustment was recommended by Department of Finance “to support the capital position of the OFBank and allow it to comply with Bangko Sentral ng Pilipinas regulations, as well as support the Bank’s short- and long-term plans and programs for Filipino overseas, in the interest of national economy and general welfare.”

Under Republic Act No. 7656, all government -owned and -controlled corporations are required to declare and remit at least 50 percent of annual net earnings as cash, stock or property dividends to the national government. The same law however allows the President to adjust the percentage of annual net earnings to be declared by a government corporation in the interest of national economy and general welfare.

The order took effect immediately after it was signed by the President on August 5. A copy of the order was released by the Palace Friday, August 6.