Government revenues reached P4.41 trillion in 2024, the highest in 27 years, preliminary data released by the Department of Finance (DOF) showed.
The revenues collected by the government last year exceeded the P4.27 trillion program in the Budget of Expenditures and Source of Finance for 2024, as well as the Development Budget Coordination Committee’s full-year outlook of P4.38 trillion, the DOF said on Friday, January 17.
The estimated revenues based on”very preliminary figures” as of January 16, comprised of P3.78 trillion in tax revenues and P625.96 billion in non-tax earnings.
“Let me commend both the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) for more or less hitting their targets last year. I think we had the highest collection last year. I think we achieved a 16.5 percent revenue to GDP, the highest in 27 years,” Finance Secretary Ralph Recto told reporters at the DOF offices late Thursday, ahead of the release of the preliminary numbers.
Year-on-year, the preliminary collection saw a 15.45 percent increase from the P3.82 trillion generated in 2023.
“Also, because of the excess revenue to fund the unprogrammed appropriations, including (the remitted excess funds from) the Philippine Health Insurance Corp. and the Philippine Deposit Insurance Corp., including other dividends, we were able to generate an additional P200 billion,” Recto added.
DOF data also showed that the BIR raked in P2.83 trillion in revenues.
However, in a televised interview yesterday, BIR Commissioner Romeo Lumagui Jr. announced the updated collection number of P2.86 trillion for the government’s biggest revenue-generating agency.
This amount was around 13 percent higher than the BIR’s revenue in 2023 of P2.52 trillion.
The BIR also achieved the 2024 collection goal of P2.85 trillion.
“We are still waiting for the final numbers to be reconciled by early February, but we are certain that we have exceeded our target by the billions,” Lumagui said in a statement yesterday
“The billions in surplus BIR collections for 2024 means that the national government can borrow less money to maintain the 2025 budget,” Lumagui added.
BIR achieved its surplus collection in 2024 partly because of strict enforcement of the law against fake or fraudulent receipts and against illicit trade of cigarettes and vape products.
The DOF’s data also showed that the Customs bureau generated P916.6 billion last year, short of its P939.69 billion target. But it was 3.78 percent higher than the bureau’s collection in 2023 of P883.21 billion.
John Paolo Rivera, Philippine Institute for Development Studies senior research fellow, attributed the below-target performance of the BOC to several factors, top of which was the decline in actual imports, particularly in capital goods and fuel.
“Lower import volumes directly translate to reduced tariff collections, which are a major source of BOC revenues,” Rivera told Malaya Business Insight via Viber.
Another factor was the lingering uncertainties in the global economy, such as weaker demand from major trading partners and supply chain disruptions.
“Persistence of smuggling and undervaluation of goods could have negatively impacted revenue generation. Despite ongoing reforms, these issues remain a challenge for the BOC,” Rivera said.
“Recent policies promoting trade liberalization or tariff adjustments may have also influenced the revenue performance. For example, lower or suspended tariff rates on key goods (meant) to temper inflationary pressures could have contributed to the shortfall,” he said.
Michael Ricafort, chief economist at the Rizal Commercial Banking Corp. had a similar sentiment.
BOC’s collection performance which fell below program could be partly attributed to the lower tariffs on imported rice since early July 2024, Ricafort said.
He also cited the relatively slower imports amid mostly softer economic data of China, which is the world’s second biggest economy and among the biggest trading partners of the Philippines and other Asian countries.
“Risk of higher US import tariffs and retaliatory trade wars could slow down global trade and overall global economic/GDP growth,” Ricafort said via Viber.
Meanwhile, other government offices contributed P32.39 billion to the state’s 2024 revenues.
For this year, the government has a revenue goal of P4.64 trillion.
The BIR is tasked to generate P3.23 trillion while the BOC needs to surpass the P1 trillion mark.
Moving forward, I expect the BIR also to hit the targets for 2025. The challenge will be a little more for BOC because we increased their target for next year. So we want them to grow double-digit also for next year. So, I think that’s where the challenge is,” Recto said.
“And assuming they have a shortfall, assuming they don’t hit the double-digit mark, we’re preparing what we can do to ensure that we still collect the revenue so that we don’t increase the deficit, by way of non-tax revenue and other privatization proceeds, “Recto said.
So, this year, for sure we will still adopt the policy of dividend rate of 75 percent (for government-owned and -controlled corporations),” he said.