NextGen Day

President Rodrigo Duterte signed an executive order (EO) revising the Philippine Guarantee Corporation’s dividend rate (PHILGUARANTEE).

Following the proposal of Finance Secretary Carlos Dominguez, Duterte signed EO No. 153 on Monday, which reduces the dividend rate of PHILGUARANTEE to zero percent of its yearly net earnings from 50 percent.

“Pursuant to Section 5 of RA [Republic Act] No. 7656, the percentage of net earnings to be declared and remitted by the PHILGUARANTEE to the National Government for CYs [calendar years] 2019 and 2020 is reduced from 50% to 0%,” the EO stated.

Only PHILGUARANTEE is subject to the amended dividend rate set forth in Section 1 of this Order for the calendar years 2019 and 2020.

All government-owned or controlled corporations (GOCCs) are required by RA No. 7656 to declare and remit to the National Government at least 50% of their yearly net earnings in cash, stock, or property dividends.

It also states that, on the proposal of the Secretary of Finance, the President of the Philippines may change the proportion of yearly net earnings that a GOCC must declare in the benefit of the national economy and general welfare.

To support PHILGUARANTEE’s role in facilitating and promoting socio-economic development through the provision of credit guarantees to priority sectors of the economy, as well as support its capital position and allow it to comply with RA No. 7656, the Secretary of Finance has recommended a downtrend adjustment of the percentage of net earnings that shall be declared by the PHILGUARANTEE as dividends to the National Government for CYs 2019 and 2020.

The PHILGUARANTE is a GOCC established pursuant to Executive Order No. 58, Series of 2018.

Its mission is to facilitate and promote socio-economic and regional development by providing credit guarantees in support of trade and investments, exports, infrastructure, energy, tourism, agricultural business/modernization, housing, micro, small and medium enterprises, and other priority sectors of the economy.

EO No. 153 goes into effect right now.

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