Adjusting the dividend rates of selected government owned and/or controlled corporations on their 1994 earnings pursuant to section 5 of Republic Act No. 7656

EXECUTIVE ORDER NO. 260 July 14, 1995

ADJUSTING THE DIVIDEND RATES OF SELECTED GOVERNMENT OWNED AND/OR CONTROLLED CORPORATIONS ON THEIR 1994 EARNINGS PURSUANT TO SECTION 5 OF REPUBLIC ACT NO. 7656

WHEREAS, Section 1 of Republic Act No. 7656 provides that;

"Section 1. Declaration of Policy. It is hereby declared the policy of the State that in order for the National Government (NG) to realize additional revenues, government owned and/or controlled corporations, without impairing their viability and the purposes for which they have been established, shall share a substantial amount of their net earnings to the National Government (NG)."

WHEREAS, to support the viability and mandate of the government owned and/or controlled corporations (GOCCs), the liquidity, retained earnings position and medium-term plan and programs of these GOCCs were considered in the determination of the reasonable dividend rates of such corporations on their 1994 net earnings;

WHEREAS, pursuant to Section 5 of RA 7656, the Secretary of Finance recommended the adjustment on the percentage of annual net earnings that shall be declared by...

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Summary of Executive Order No. 260

Declaration of Policy (Section 1 of Republic Act No. 7656)
- The State declares the policy that government owned and/or controlled corporations (GOCCs) shall share a substantial amount of their net earnings to the National Government (NG) without impairing their viability and purposes.

Considerations for Dividend Rate Adjustment (Whereas clauses)
- The liquidity, retained earnings position, and medium-term plans and programs of the GOCCs were considered in determining reasonable dividend rates.
- The Secretary of Finance recommended adjusting the percentage of annual net earnings to be declared as dividends by various GOCCs in the interest of national economy and general welfare (Section 5 of RA 7656).

Adjusted Dividend Rates on 1994 Net Earnings (Section 1)
- Land Bank of the Philippines: 30% (cash)
- Manila International Airport Authority: 20% (cash)
- Metropolitan Waterworks and Sewerage System: 30% (cash)
- National Electrification Administration: 15% (cash)
- Philippine Center for Economic Development: 25% (cash)
- Public Estates Authority: 20% (cash)
- Philippine National Oil Company (PNOC): 50% dividend rate on net earnings after deducting the remittance made to NG from the PETRON privatization proceeds equivalent to 50% thereof under Executive Order No. 37; dividend should be paid in cash.

Applicability (Section 2)
- The adjusted dividend rates are only applicable to the 1994 net earnings of the concerned GOCCs.

Effectivity (Section 3)
- This Executive Order shall take effect immediately.