MANILA – President Ferdinand R. Marcos Jr. has modified the proportion of annual net profits to be allocated by the state-run Land Bank of the Philippines for the year 2022, in an effort to bolster its financial stability.

In an Executive Order (EO) 43 signed by Marcos on October 11 and disclosed on Saturday, the dividend rate for LandBank was adjusted to zero percent from its previous allocation of 50 percent of annual earnings.

The Landbank and the Development Bank of the Philippines had earlier remitted P50 billion and P25 billion, respectively, to the Bureau of the Treasury for the initial capital of the Maharlika Investment Fund.

“The revised dividend rate specified in Section 1 of this Order is exclusively applicable to LandBank for the calendar year 2022,” as stated in the EO.

This decrease, made at the suggestion of Finance Secretary Benjamin Diokno, was carried out “in the interest of the national economy and the overall well-being of the country.”

Marcos initiated the reduction in the dividend rate to reinforce LandBank’s capital position, ensure its adherence to the capital adequacy requirements set forth by the Bangko Sentral ng Pilipinas, and enhance its role in aiding industries adversely impacted by the 2019 coronavirus disease pandemic in their economic recovery.

“Through its various programs, the Land Bank of the Philippines (LBP) is dedicated to offering financial support to the agricultural sector, encompassing roughly 3.6 million Filipino farmers and fisherfolk, as well as other critical participants in the agricultural value chain. It also seeks to promote financial inclusion, digital transformation, and sustainable development for the benefit of all Filipinos,” EO 43 highlighted.

According to Republic Act (RA) 7656, all government-owned and -controlled corporations (GOCCs) are obliged to declare and remit a minimum of 50 percent of their earnings to the national government.

RA 7656 also confers the authority to the President, based on the recommendations of the Secretary of Finance, to modify the percentage of annual net earnings to be declared and remitted by a GOCC.

EO 43 is effective immediately. (ai/mnm)