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Benjamin Diokno, the finance secretary, ruled out any connection between the state-owned Development Bank of the Philippines’ (DBP) dividend relief and potential investments in the Maharlika Investment Fund (MIF).

This comes after House Deputy Minority Leader France Castro stated on Monday that Executive Order (EO) 8, which decreases DBP’s dividend to zero and may favor the planned MIF rather than the national budget, “was issued to increase DBP’s capital into the MIF.”

“Land Bank of the Philippines) and DBP (Depository and Clearing Corporation) have reduced their dividend remittance in the past, long before the MIF was conceived, in order to improve the ability of both government banks to deliver on their mandate and at the same time, maintain their financial standing,” Diokno said in a statement on Monday.

Government-owned and controlled corporations (GOCCs) are required to give the federal government at least half of their annual profits by Republic Act (RA) 7656, also known as the Dividend Law.

The statement noted that, in accordance with RA 7565, “the President of the Philippines may change the percentage of annual net earnings to be declared by a government-owned and controlled corporation (GOCC) for the benefit of the national economy and general welfare.”

According to EO 8, however, the decrease in DBP’s dividend is intended to increase the financial institution’s capital base in accordance with BSP standards.

It was observed that DBP provides finance for a range of initiatives, including community development, environment and social services, infrastructure and logistical facilities, and micro, small, and medium-sized enterprises (MSMEs).

In order to achieve national food security, it was further stated that “the numerous programs of the DBP aim to solve weaknesses in the agriculture sector and strengthen the resilience of the agricultural value chain.”

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