With debt as a major challenge faced by the new administration, raising revenues has never been more crucial than at this time.
Benjamin Diokno, secretary of the Department of Finance, expects the Bureau of Internal Revenue (BIR) to have better collection performance in the second half of the year, as he projects that the 2022 revenue target will be met.
Diokno said over the weekend the tax agency should collect taxes “efficiently and fairly.”
“I consider revenue collectors as essential workers. Revenues are essential for achieving the goals embodied in our Medium-Term Fiscal Framework (MTFF). BIR officials commit to better second half performance. I expect this year’s revenue target will be met,” Diokno told reporters.
“Digitalization is the key. It removes discretion. BIR is slightly behind target while BOC (Bureau of Customs) exceeds its target largely due to higher oil prices and peso depreciation,” he added.
BIR collections in May amounted to P216.6 billion, slightly below the target of P216.98 billion, but notching a 17.91 percent increase from the P183.7 billion logged in the same month last year.
Likewise, BIR’s total collection of P959 billion as of end-May fell below the P1.026 trillion five-month goal yet exceeded last year’s performance for the same period of P872.4 billion by 9.92 percent.
Meanwhile, latest data showed that the BOC recorded its highest monthly collection in history in June, with P76.29 billion in revenues, surpassing its target of P56.29 billion by 35.5 percent.
BOC also surpassed its midyear target collection of P327.812 billion by 21.05 percent with collections of P396.804 billion since January 2022. BOC’s cumulative collection this year is also higher by 31.5 percent than the P301.746 billion midyear collection in 2021.
Earlier this month, Diokno disclosed details of the government’s first-ever MTFF that is aimed at reducing the deficit, promoting fiscal sustainability and enabling robust economic growth.
The fiscal strategy under the MTFF, which was submitted by the economic team to President Ferdinand Marcos Jr., will be implemented in two stages over the entire term of the administration.
Diokno said the MTFF contains near-term and medium-term strategic plans for socioeconomic development which will be presented in detail to the public by Marcos in his first State of the Nation Address scheduled today.
Among the targets set under the framework is for the economy to expand by 6.5 to 7.5 percent in 2022. Economists project this goal to be the highest growth rate among the Asean+3 countries, which include Japan, South Korea and China.
Diokno said economic growth is targeted at 6.5 to 8 percent from 2023 to 2028.
“This framework will set the tone or will be our game plan for the next six years. This is the first time that this government or any government of the Philippines has presented such a game plan,” Diokno earlier said.
According to the Department of Finance, the MTFF demonstrates the government’s holistic approach in accelerating economic growth and promoting the welfare of Filipinos. It will also serve as the government’s guidebook in reducing poverty incidence and lowering the country’s debt-to-gross domestic product (GDP) ratio.
“We are not only concerned with growth per se, but we are also concerned with reducing poverty. So, our target is that by the end of President Marcos’ term, poverty incidence will be down to a single digit — nine percent,” Diokno said.
The MTFF’s overall goal is to create more quality jobs and reduce poverty incidence by steering the economy back to its high-growth path in the near term and sustain the high, but inclusive and resilient, growth over the medium term.
The Marcos Jr. administration also aims to elevate the country to upper middle income status, where per capita income for Filipinos is at $4,046 by the end of the President’s term, Diokno said.
Diokno is confident that government revenues will continue to pick up and the deficit will decrease in the near term.
“The desire is to reduce the deficit which ballooned during the pandemic to around nine percent deficit-to-GDP ratio, to around three percent,” he said.
Moreover, the government aims to cut the debt-to-GDP ratio from the current 63.5 percent as of the first quarter of 2022 to 60 percent by 2025.
