President Rodrigo Duterte on Thursday signed an executive order (EO) adjusting the dividend rate of the Overseas Filipino Bank (OFBank).
The OFB will no longer have to remit any dividends from its net earnings in 2016 to the national government after Duterte issued EO No. 146, which adjusted the dividend rate of the OF Bank from 50 percent to 0 percent upon the recommendation of the Department of Finance (DOF).
“The adjusted dividend rate set forth in Section 1 of this order is only applicable to OF Bank for CY 2016,” the one-page issuance read.
Under Republic Act No. 7656, government-owned or controlled corporations (GOCC) such as the OF Ban are required to remit 50 percent of their annual net earnings as cash, stock, or property dividends to the national government.
The Commission on Audit (COA) previously flagged OFB in 2019 after it found the GOCC failed to declare and remit dividends amounting to P43.083 million in 2016 to the national government.
COA recommended the OFB management to secure the approval of the President to adjust its dividend rate to zero.
Duterte opted to adjust the dividend of the OFB to support its capital position and allow it to comply with the Bangko Sentral ng Pilipinas (BSP) regulations.
The measure also aims to allow the bank, which primarily caters to Filipinos abroad and their beneficiaries, the short- and long- term plan for its clients.
EO 146 immediately took effect after it was signed last Thursday.
As of May, OFB registered P1.5 billion worth of online transaction from its over 37,000 accounts.
It is the first digital-only and branchless government bank.