The Bangko Sentral ng Pilipinas said Thursday it remitted P20 billion worth of advanced dividends to the national government to support the state in its fight against coronavirus disease 2019.
It said in a statement the dividends constituted 87 percent of the estimated total dividends based on the BSP’s unaudited financial statements for the year 2020.
The amount was scheduled to be remitted on March 26 through direct credit to the Treasurer of the Philippines-Treasurer Single Account which is maintained with the BSP.
“We are one government. We are one Filipino nation. And we, at the BSP, shall support all efforts to fight this once-in-a-lifetime pandemic and keep the economy afloat,” BSP Governor Benjamin Diokno said in a statement.
“The BSP has and is ready to employ the necessary tools in its arsenal to address the impact of COVID-19 while staying true to its mandate,” Diokno said.
Under its newly amended charter, the BSP is no longer mandated to remit its dividends to the national government. Section 2 of Republic Act No. 7653, as amended by R.A. 11211, provides that any and all declared dividends of the BSP in favor of the national government should be released and disbursed immediately for the payment of the BSP’s increase in capitalization.
“Nevertheless, considering this extraordinary time, the Monetary Board has approved to defer the application of the BSP’s dividends for 2019 to the BSP’s capital and remit P20 billion advance/partial dividends to support the national government’s programs during this enhanced community quarantine due to COVID-19,” the BSP said.
The bank also arranged for the purchase of government securities from the Bureau of Treasury under a repurchase agreement in the amount of P300 billion, cut the reserve requirement ratio by 200 basis points to 12 percent and policy rate by 50 basis points to 3.25 percent.
It also enabled continued access to banking institutions and advocated that banks extend the greatest possible help they can to serve not just our economy, but also the Filipino people.
Early this month, the BSP said remitted P21.48 billion worth of dividends to the government in 2018, the largest it declared since it was established in 1993 when it replaced the old central bank.
The BSP handed over P4 billion in partial dividends to the government on Feb. 20 last year and recently remitted P17.48 billion to complete the turnover to the government.
The BSP transmitted more than P26.96 billion in dividends to the government under the current administration. It incurred a net loss of P95.38 billion in 2012. Prudent management trimmed that loss to P17.51 billion in 2013, P9.86 billion in 2014 and P4.42 billion in 2015.
The BSP posted a net income of P17.81 billion in 2016 and that increased to P22.845 billion in 2017.
President Rodrigo Duterte signed into law Republic Act No. 11211 in February 2019. The new BSP Charter embodied a package of reforms that will further align its operations with global best practices, improve the BSP’s corporate viability and enhance its capacity for crafting proactive policies amid rising interlinkages in the financial markets and the broader economy.
The law removed money supply and credit levels as basis for determining monetary policy.
The focus on these indicators has declined among central banks over the years, as fostering price stability now considers a broader set of indicators.
RA 11211 also restored the central bank’s authority to issue debt papers as part of its regular operation. This gives the BSP greater flexibility in determining the timing and size of its monetary operations.