Palace grants Landbank remittance relief
The Land Bank of the Philippines (Landbank) was granted relief from remitting half of its annual net income to the national government for the seventh year, after the state-run bank remitted its full contribution of P50 billion to the seed capital of the Maharlika Investment Fund (MIF) last month. Under Executive Order No. 43 signed on Oct. 11, which Malacañang made public on Saturday, President Ferdinand Marcos Jr. slashed Landbank’s dividend rate from 50 percent to zero for 2022. The Landbank had a net income of P30.06 billion in 2022, higher than its P21.7 billion net earnings recorded in 2021. Under Republic Act No. 7656, all government-owned and -controlled corporations (GOCCs) are required to declare and remit 50 percent of their annual net earnings to the national government. But the same law allows the president, upon the recommendation of the finance secretary, to adjust the percentage of annual net earnings to be declared by a GOCC “in the interest of national economy and general welfare.” According to Landbank’s 2021 annual report, it turned in a total of P46.1 billion in cash dividends from 1993 until 2018. The dividends remitted in a given year are for the earnings from the previous year. Landbank’s net income has been increasing yearly from P13.58 billion in 2016 to P30 billion in 2022, except in 2020 when profits eased to P17.14 billion from P18.5 billion in 2019. Landbank said it had remitted a “significant amount” of its capital as cash dividends to the government. “However, to ensure a strong capital and compliance with regulatory capital requirements, [Landbank] requests for dividend relief or adjustment of dividend rates,” it added. Thus, through edicts similar to EO 43, the chief executive has been granting dividend relief to Landbank since 2016. Diokno recommendation Landbank made zero remittances in 2016, 2018-2021 and only 10 percent in 2017. In 2022, Landbank said it remitted a “special cash dividend” of P8.5 billion to the national government from its acquisition of United Coconut Planters Bank.EO 43 cites a recommendation from Finance Secretary Benjamin Diokno, who is also board chair of Landbank, for “downward adjustments” of the percentage of the dividends to be remitted by the bank. The zero remittance is intended to support Landbank’s capital position, maintain its compliance with the capital adequacy requirements of the Bangko Sentral ng Pilipinas (BSP), and “expand its role in the economic recovery of industries adversely affected
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