The Bangko Sentral ng Pilipinas (BSP) has filed a protest against the claims of the Commission on Audit (CoA) that it has unpaid dividends to the National Government amounting to P16.45 billion.

“BSP (is) disputing the findings and computation of the CoA,” said a ranking government official who requested anonymity. “It is still pending resolution.”

The central bank submitted its position paper to CoA challenging its evaluations. “What we’ve been told is that BSP is not agreeable with the CoA assessments and that they will not remit (the amount),” the official said.

The Department of Finance (DoF) has already sought the opinion of the Department of Justice (DoJ) regarding the “fine points” of Republic Act No. 7656 (“An Act Requiring Government-Owned or Controlled Corporations to Declare Dividends under Certain Conditions to the National Government and For Other Purposes”) also known as the “Dividends Law.”

The DoF wanted confirmation as to the proper implementation of the law, specifically on the “declaration and remittance of dividends by a GOCC of more than 50 percent of its annual net earnings” and if the collection of such amount would not “require the issuance of a presidential directive in order to be valid and effective.”

Unlike other GOCCs, the BSP is the only government corporation that remits 75 percent of its net earnings to the NG as dividends while the remaining 25 percent is the residual surplus reserves.
The issue is the distribution of the BSP net income relative to the provisions of both RA 7656 and its own New Central Act or Republic Act 7653.

BSP argued that it has authority to maintain reserves and to deduct the necessary reserves when calculating its net profits. It cites sections 43, 44 and 132b of the BSP charter for basis for these exclusions.

CoA assessed that in 2003, the BSP 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, which needed P5.8 billion for its rehabilitation. In 2004, the BSP excluded another P3.09 billion from its earnings as reserves for fidelity losses and a year later, P3.23 billion was also deducted, partly as initial seed money for its P1 billion liability insurance fund.