The Department of Finance (DoF) may have to renew talks with the central bank for the collection of P16.45 billion dividends that the Commission on Audit (CoA) said was owed to the National Government.

Exactly one year ago, the DoF affirmed the CoA report that the Bangko Sentral ng Pilipinas (BSP) has understated dividend payments by P16.45 billion over a spread of three years or from 2003 to 2006.

Failing to raise P30 billion from privatization last year, the DoF turned to the collection of dividends from government owned and controlled corporations such as the BSP for additional funds. For this year, with a programmed deficit of P293 billion, the BSP back dividends are needed more than ever.

Based on Republic Act No. 7656 entitled “An Act Requiring Government Owned or Controlled Corporations to Declare Dividends under Certain Conditions to the National Government and for Other Purposes” any officials violating this law will be penalized a fine of up to P50,000 and imprisonment of up to one year.

Under the law, the GOCC’s chief executive officer and its chief financial officer is liable if found in violation of the provisions of the law.

According to the CoA report, the BSP under-declaration amounted to only P7.07 billion for 2003 to 2006 but the years of non-payment has increased the total to P16.45 billion.

CoA said the BSP deducted funds for its reserves before computing the dividends. In 2003, the deductions totaled P3.1 billion from its net earnings, of which P800 million was for property insurance and P2.3 billion was for the Security Plant Complex.

Again in 2004, the BSP removed P3.09 billion from its earnings as reserves for fidelity losses and another P3.23 billion was deducted in 2005. It was from this amount that the BSP set up its P500-million liability fund for its directors and officers.

The Bureau of the Treasury (BTr) had sent the BSP in 2003 the bill to pay the P7 billion under-declared dividends. It was BTr chief Omar Cruz who wrote the BSP to settle the amount two years ago.

In the New Central Bank Act, the BSP remits 75 percent of its net profits to a sinking fund until such time as the net liabilities of the old central bank will have been liquidated or to the NG as dividends with the remaining 25 percent as residual BSP surplus.

In 2008, BSP remitted dividends worth P6 billion.