While 2008 may have been the year that the global economic crisis blew up, it is also the year that stock buyers in the local market received record cash dividends to the tune of P219.24 billion.

A data released by the Philippine Stock Exchange showed that listed firms declared cash dividends in 2008 that was 18.8 percent higher than the P184.58 billion handed out a year before.

There were also more companies that shared a portion of their corporate earnings or accumulated profits to their stockholders. The average dividend yield—or the cash dividends as a percentage of the total market capitalization—was also 132 percent higher than the previous year.

In 2008, 91 firms declared cash dividends. They represented 37 percent out of the 245 companies with listed common shares.

In 2007, there were 84 companies that declared cash dividends. They represented 35 percent from among the 243 listed firms.

On the whole, cash dividends paid out last year represented 39 percent of the net profits of listed companies the previous year, an increase from the 36 percent average indicative dividend payout ratio in 2007.

The P219.24 billion total cash dividends also corresponded to a 5.42 percent average dividend yield— indicative return from investing in stocks, assuming prices were unchanged.

This was notably higher than the previous years. In 2007, average dividend return generated in the stock market was 2.33 percent, while it was 2.07 percent in 2006.

This was the same for companies in the index, PSEi, where dividend yields more than doubled to 5.84 percent in 2008, an increase of 124 percent from 2.6 percent in 2007.

“The increase in dividends declared by listed companies is a welcome report for the market, particularly during these difficult times. While it is true that we cannot force our companies to declare cash dividends, we have not stopped from advocating for higher dividend declarations from our listed companies, particularly through our corporate governance initiatives,” said PSE president and chief executive Francis Lim.

Who were generous?

The financials sector, which consists of listed banks, remittance and reinsurance firms as well as the PSE—accounted for 51.3 percent of total dividend declarations at P112.47 billion, up 11 percent from P101.36 billion the previous year.

The total amount of dividends declared included those of foreign-listed Manulife Financial Corporation and Sunlife Financial Corporation.

The services sector, which is made up of telecommunication, television, information technology-oriented as well as leisure and gaming firms, cornered 29..2 percent of total dividend announcements last year at P64.09 billion, higher by 37.1 percent from P46.74 billion in 2007.

Market leaders Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom Inc. (Globe) declared a total of P194 per share and P125 per share in dividends, respectively last year. Total cash dividends declared by these companies  of P36.6 billion and P16.54 billion, respectively, represented the two biggest total cash dividends declared by local firms last year.

The industrial sector, composed of food and beverage firms, utility and power generation companies as well as manufacturing firms, paid P24.53 billion in dividends last year, up 33 percent from P18.33 billion in 2007. The industrial sector accounted for 11 percent of total dividend payouts for 2008.

Companies in the property sector, for their part, declared P7.6 billion in total dividends last year from P6.84 billion the previous year.

Meanwhile, the holding firms, small and medium enterprises and the mining and oil sectors, saw their total dividend declarations decrease in 2008 from the previous year.