The Philippine government is setting its sights on another stellar revenue performance in 2025 following a 27-year high revenue-to-gross domestic product (GDP) ratio achieved this year.
Government revenues are expected to reach 16.7 percent of GDP in 2024, the highest in more than 27 years since 1997.
Finance Secretary Ralph Recto told reporters he wanted to keep this level of revenue performance in 2025, citing various factors that could drive revenue growth.
“The average in the region is about 16 percent. So we’re not [doing] bad. I think next year we want to maintain at least 16.5 percent revenue-to-GDP,” Recto said.
Strong economic growth, the passage of new tax measures and improved collection efficiency will support the goal of keeping revenues at the 16 percent level, the finance chief said.
Although the Internal Revenue (BIR) and Customs (BOC) bureaus likely missed their collection targets, higher non-tax revenues made up for the overall shortfall this year, Recto said.
If the BIR and the BOC fall short, “we made up for it through the DOF with non-tax revenue. As a result, we surpassed our target this year through the DOF,” Recto said.
The finance secretary said earlier, the overall “target was roughly P4.22 trillion. We achieved something like P4.42 trillion this year.”
Based on the Budget of Expenditures and Sources of Financing, Recto said the BIR should have collected P3.05 trillion.
“I think they’ll end up this year at P2.85 trillion, more or less. Give or take a few billion pesos,” Recto said.
“It’s still double-digit growth and the reasons for that are: one, remember [that under the] BESF, there are tax measures that were supposed to be passed but were not passed into law. So naturally we won’t be collecting taxes from the tax laws that were not passed. And of course the lower GDP growth rate,” Recto said.
As for the BOC, their target was roughly P1.05 trillion.
The finance secretary said the agency will end up this year with a little less than P940 billion.
