10.05.2015
The Monetary Board (MB) recently approved the liberalization of regulations on dividend declaration of banks and quasi-banks (QBs) on shares of stock and similar capital instruments.
The policy amendment aligns the dividend declaration standards with international standards on the rights of shareholders in particular; holds more accountable the board of directors and management of the bank and QB on the declaration of dividends; and makes more transparent to the public the dividend declaration in view of the required disclosures.
The policy will bring publicly listed banks/QBs in a position to comply with the 30 calendar day’s timeline prescribed under the ASEAN Corporate Governance Scorecard (ACGS) for the payment of dividends to shareholders of record.
Further, the policy also requires that the dividend declaration be immediately recognized as a liability in accordance with Philippine Accounting Standards and that it be disclosed in the statement of equity changes and in the notes to the financial statements.
Dividend declaration is ultimately the responsibility of the bank/QB and its board of directors. Banks and QBs that meet the pre-qualification criteria including capital adequacy requirements shall be qualified to declare and pay dividends without prior Bangko Sentral verification.
Any bank or QB that misrepresents or does not comply with the amended regulations on dividend declaration shall be reverted back to the “prior Bangko Sentral verification” requirement. It may also be subject to other enforcement actions provided by law/regulations including possible declaration of unsafe or unsound banking practice.
Source: http://www.bsp.gov.ph/publications/media.asp?id=3884
