Castro flags Marcos EO reducing DBP's remittance to national gov't

House Deputy Minority Leader France Castro on Monday expressed alarm over President Ferdinand "Bongbong" Marcos Jr.'s executive order (EO) reducing the remittance of state-run Development Bank of the Philippines (DBP) dividends to the national government.

In a statement, Castro said Executive Order No. 8, which slashed the DBP's dividend rate to zero percent, may favor the proposed Maharlika Investment Fund (MIF) rather than the national budget.

Castro made the position less than a week after the House of Representatives approved the MIF measure, or House Bill 6608, on third and final reading before it adjourned session.

The MIF bill, which seeks to maximize the investible funds of state-run financial institutions and ultimately increase public funds for government infrastructure and services, also provides that part of its initial funding will come the DBP, which will pitch P25 billion.

"In our initial reading of this EO, it seems that this was issued to increase DBP's capital for the Maharlika fund," Castro said.

"Consequently though because DBP would not remit anything to the national government, this would be a huge loss from the people's coffers and the source of funds for the next General Appropriations Act (GAA)."

GMA News Online has reached out to Malacañang and DBP Corporate Secretary Rene Gaerlan for their comment and will publish their answers as soon as they become available.

According to EO 8, the adjusted dividend rate or zero percent set forth is applicable only to the DBP for calendar year 2021.

One of the EO's premises indicated that the Secretary of Finance recommended the "downward adjustment" of the dividend rate in order to support the capital position of the DBP, allow it to comply with Bangko Sentral ng Pilipinas regulations, and to sustain its role in the economic recovery of industries adversely affected by the COVID-19 pandemic.

The order is pursuant to Republic Act No. 7656 or the measure requiring government-owned or -controlled corporations to declare dividends under certain conditions to the national government.

Meanwhile, amid the swift passage of the MIF bill in the House, Castro called on senators not to rush on approving a similar bill.

"I expect them Senators to give more for consultation because here in the House, the consultation was just a day, and it was even a briefing because they already approved the bill before the briefing," Castro said in a CNN Philippines interview.

"I expect them to be more consultative and hear other stakeholders like the Central Bank governors, Associate Justice Antonio Caprio," she added.

Retired Supreme Court Justice Antonio Carpio earlier said that the MIF is a losing investment because the cost is higher than the projected gains. —Llanesca T. Panti/KBK, GMA Integrated News