The Philippine Deposit Insurance Corporation (PDIC) has remitted a total of P7.1 billion in dividend contributions to the Bureau of the Treasury (BTr) for fiscal year 2020, in response to the government’s call for support for emergency health and economic expenditures on pandemic response, including the ongoing vaccine rollout targeted at inoculating 70 million adult Filipinos against COVID-19.
Finance Secretary Carlos Dominguez III lauded the PDIC under its president, Roberto Tan, for heeding the government’s call for government-owned and controlled corporations (GOCCs) to do their part in raising additional funds for the government’s COVID-19 response.
“The dividend remittance by PDIC will be a substantial contribution to the financing of the health and economic recovery measures of the Government, while upholding the policy of the Government to maintain and preserve confidence in the banking system,” Dominguez said.
The initial dividends declared by the PDIC on Feb. 8 amounted to P4.9 billion. It declared an additional P2.2 billion last March 24, for a total of P7.1B remitted on March 25.
According to Tan, the declaration of dividends is based on the other sources of income of PDIC primarily from interest income from its investments.
Assessments from banks do not form part of the dividend base in accordance with the PDIC Charter, he said.
Under its Charter, the PDIC is required to remit dividends to the national government (NG) equivalent to at least 50 percent of its income from other sources while the PDIC Board ensures that the Deposit Insurance Fund (DIF) target level, as determined for the applicable year, has been reached.
“The ratio of the DIF to Estimated Insured Deposits (EID) as of year-end 2020 stood at 7.23 percent, higher than 5.5 percent, which is the lower range of the target DIF ratio range of 5.5 percent to 8 percent and also the benchmark for the declaration of dividends,” Tan said.
“We always exercise prudence in the management of its DIF to ensure that it maintains adequate capital to respond to potential financial assistance to failing banks, subject to certain conditions; and insurance calls in cases of bank closures,” he added.
Earlier, the Department of Finance (DOF) reported that the Philippine Ports Authority (PPA) remitted P3.541 billion in dividends to the BTr for 2020, which is more than the required minimum amount under the law.
GOCCs are mandated under Republic Act (RA) No. 7656 or the Dividend Law to declare and remit to the NG at least 50 percent of their net income as dividends.
Covering the period from January 1 to March 29, 2021, the PPA ranks as the third biggest dividend contributor to the BTr, next to the National Transmission Corporation (Transco) with P8.3 billion and the PDIC with P7.1 billion.
A total of 11 GOCCs already remitted a combined P21.44 billion in dividends to the BTr during this period.