The Bangko Sentral ng Pilipinas (BSP) has again thrown a lifeline to the National Government (NG) by remitting ₱16 billion out of its net income to support the government’s anti-pandemic programs.
BSP Governor Benjamin E. Diokno said that while the central bank under its revised charter is no longer mandated to remit dividends to the NG, it will continue to do so for as long as there is a need.
“Considering this extraordinary time, the BSP has decided to remit dividends to support (NG) COVID-19 related programs,” said Diokno.
Diokno said the BSP declared dividends of ₱15.896 billion for the fiscal year 2020. He said the ₱15 billion was remitted last June 28 while the remaining ₱896 million was deposited to the NG coffers last month, August 18.
“The amount represents 50 percent of the total net income of BSP for 2020,” he said. “Last year, BSP remitted more than ₱20 billion in dividends to support the government in its fight against the COVID-19 virus. The amount was computed based on BSP’s net income for fiscal year 2019,” he also said.
The revised BSP Charter provides that “any and all declared dividends of the BSP in favor of the NG shall be released and disbursed immediately for the payment of the BSP’s increase in capitalization.” The BSP’s ₱50-billion capitalization has been increased to ₱200 billion and the BSP was supposed to accumulate this amount from its net income.
Diokno said that BSP law exempts it from declaring dividends while it is building up its capitalization but the BSP has deferred the capital build-up and still remitted ₱20 billion in advance dividends in 2020 and another ₱16 billion this year for a total of ₱36 billion since the pandemic started.
The ₱20-billion dividends remitted in March 2020 came from the central bank’s 2018 net income of ₱39.85 billion.
As of the end of May this year, the BSP reported a net income of ₱30.21 billion, up by 115.17 percent year-on-year or from ₱14.04 billion.
Last year, the BSP reported a net income of ₱34.53 billion which was down from 2019’s ₱46.24 billion.
The central bank’s amended law or Republic Act 11211 (“An Act Amending Republic Act No. 7653, Otherwise Known as the ‘New Central Bank Act’, and for Other Purposes”) was approved last February 14, 2019. Section 2 of the amended charter specified that declared dividends will be deposited in a special account in the BSP’s general fund and will be “earmarked for the payment of the BSP’s increase in capitalization (and) such payment will be released and disbursed immediately and will continue until the increase in capitalization has been fully paid.”