Department of Justice

DOJ says PCSO not exempt from remitting dividends to treasury

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DOJ says PCSO not exempt from remitting dividends to treasury
Justice Secretary Jesus Crispin Remulla says the GOCC Dividends Law applies even to PCSO

MANILA, Philippines – The Philippine Charity Sweepstakes Office (PSCO) is not exempt from declaring and remitting dividends to the Bureau of the Treasury, according to the Department of Justice (DOJ).

The DOJ took that position on September 27 after PCSO General Manager Melquiades Robles sent a letter seeking the agency’s opinion on the matter.

Robles had knocked on DOJ’s doors after the Department of Finance (DOF) required PCSO to remit dividends to the national treasury in accordance with Republic Act No. 7656.

Justice Secretary Jesus Crispin “Boying” Remulla said Republic Act 7656 – or the Government-Owned or Controlled Corporation Dividends Law – applies to all GOCCs, except those which are created to administer real or personal properties or hold funds for the use of its members.

“A review of PCSO’s charter, Republic Act No. 1169, readily shows that it was neither created or organized by law to administer real or personal properties, nor to hold funds in trust for the use of its members,” Remulla wrote.

He added that PCSO isn’t listed in the law as among the agencies exempted from remitting dividends from the national government.

Why PCSO wrote the letter

The PCSO did not want to cave in to DOF’s demand due to the following reasons:

  • It has no net earnings that can be declared dividends and remitted to the government
  • Incomes and earnings from PCSO become part of its charity fund, intended for social services
  • disbursements from the charity fund need the approval of the president
  • Several laws passed after RA 7676 compel PCSO to hold in trust funds for various programs of the government
  • There are unique operational constraints that prevent the PCSO from remitting net receipts

The PCSO had also argued that the Office of the Government Corporate Counsel already said in a 2016 opinion that it is not covered by RA 7656, and that remitting to the government would violate its charter since its earnings are already allocated by law for certain expenses.

“As much as possible we avoid reviewing opinions of the OGCC because, while it is true that this Department exercises supervision and control over OGCC, it has adopted a policy of acting sparingly on requests for review or confirmation of any opinion rendered by the OGCC, unless the same is patently erroneous,” the DOJ said. – Rappler.com

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