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This page features the full text 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.
REPUBLIC
ACT NO. 7656AN
ACT REQUIRING GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS TO DECLARE
DIVIDENDS
UNDER CERTAIN CONDITIONS TO THE NATIONAL GOVERNMENT, AND FOR OTHER
PURPOSES.
Section
1. Declaration of Policy. — It
is hereby declared the policy of the State that in order for the
National
Government to realize additional revenues, government-owned 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.
chanrobles virtuallaw libraryred
Sec.
2. Definition of Terms. — As
used in this Act, the term:
(a) "National
Government" refers to the entire machinery of the central government,
as
distinguished from the different forms of local governments. chanrobles virtuallaw libraryredchanrobles virtuallaw libraryred(b) "Government-owned
or controlled corporations" refers to corporations organized as a stock
or non-stock corporation vested with functions relating to public
needs,
whether governmental or proprietary in nature, and owned by the
Government
directly or through its instrumentalities either wholly or, where
applicable
as in the case of stock corporations, to the extent of at least fifty
one
percent (51%) of its capital stock.This
term shall also include financial institutions, owned or controlled by
the National Government, but shall exclude acquired asset corporations,
as defined in the next paragraphs, state universities, and colleges.
(c) "Acquired
asset corporation" refers to a corporation: (1) which is under private
ownership, the voting or outstanding shares of which were: (i) conveyed
to the Government or to a government agency, instrumentality or
corporation
in satisfaction of debts whether by foreclosure of otherwise, or (ii)
duly
acquired by the Government through final judgment in a sequestration
proceeding;
or (2) which is a subsidiary of a government corporation organized
exclusively
to own and manage, or lease, or operate specific physical assets
acquired
by a government financial institution in satisfaction of debts incurred
therewith, and which in any case by law or by enunciated policy is
required
to be disposed of to private ownership within a specified period of
time.
(d) "Net
earnings" shall mean income derived from whatever source, whether
exempt
or subject to tax, net of deductions allowed under Section 29 of the
National
Internal Revenue Code, as amended, and income tax and other taxes paid
thereon, but in no case shall any reserve for whatever purpose be
allowed
as a deduction from net earnings.
Sec.
3. Dividends. — All government-owned
or -controlled corporations shall declare and remit at least fifty
percent
(50%) of their annual net earnings as cash, stock or property dividends
to the National Government. This
section shall also apply to those government-owned or -controlled
corporations
whose profit distribution is provided by their respective charters or
by
special law, but shall exclude those enumerated in Section 4 hereof: Provided,
That
such dividends accruing to the National Government shall be received by
the National Treasury and recorded as income of the General Fund.
chanrobles virtuallaw libraryred
Sec.
4. Exemptions. — The provisions
of the preceding section notwithstanding, government-owned or
-controlled
corporations created or organized by law to administer real or personal
properties or funds held in trust for the use and the benefit of its
members,
shall not be covered by this Act such as, but not limited to: the
Government
Service Insurance System, the Home Development Mutual Fund, the
Employees
Compensation Commission, the Overseas Workers Welfare Administration,
and
the Philippine Medical Care Commission.chanrobles virtual law library
Sec.
5. Flexible Clause. — In the
interest of national economy and general welfare, the percentage of
annual
net earnings that shall be declared by a government-owned or
-controlled
corporation may be adjusted by the President of the Philippines upon
recommendation
by the Secretary of Finance.
Sec.
6. Penalty. — Any member of the
governing board, the chief executive officer and the chief financial
officer
of a government-owned or -controlled corporation who violates any
provision
of this Act or any of the implementing rules and regulations
promulgated
thereunder, in addition to other sanctions provided by law, upon
conviction
thereof, shall suffer the penalty of a fine not less than Ten thousand
pesos (P10,000.00) but not more than Fifty thousand pesos (P50,000.00)
or imprisonment of not less than one (1) year but not more than three
(3)
years, or both, at the discretion of the court. chanrobles virtuallaw libraryred
Sec.
7. Implementing Rules and Regulations.
— The Department of Finance shall formulate and issue the necessary
rules
and regulations within sixty (60) days from the effectivity of this Act
and shall exercise primary jurisdiction in its implementation.
Sec.
8. Separability Clause. — If
for any reason or reasons any part of the provision of this Act shall
be
deemed to be unconstitutional or invalid, the other parts or provisions
hereof which are not affected thereby shall continue to be in force and
effect.cralaw:red
Sec.
9. Repealing Clause. — Executive
Order No. 399, dated April 29, 1990, and other laws, decrees, executive
orders, letters of instruction, rules and regulations, and portions
thereof
inconsistent with the provisions of this Act are hereby repealed or
modified
accordingly.cralaw:red
Sec.
10. Effectivity Clause. — This
Act shall take effect fifteen (15) days after its publication in the
Official
Gazette or in at least two (2) national newspapers of general
circulation,
whichever comes earlier. chanrobles virtuallaw libraryred
Approved:
November
9, 1993
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