The Duterte administration may borrow less than programmed for the rest of the year should the government’s two main tax agencies continue to exceed their downscaled collection targets, the Department of Finance (DOF) said.
While the Bureau of Internal Revenue (BIR) and Bureau of Customs were about 12 percent below their collections last year as of August, Finance Secretary Carlos G. Dominguez III noted that the two agencies have recently shown “positive developments.”
Data from the DOF showed the BIR and Customs have raised P1.527 trillion in January to August this year, higher than their revised collection target of P1.636 trillion by 7.2 percent, but lower than last year’s P1.863 trillion.
“We are still short of what we would like, however, the revenue agencies have shown that they are still very active, they are taking the job very seriously and have in fact exceeded the revised targets,” Dominguez told reporters.
Asked if this favorable tax collection performance would result in less borrowings, Dominguez said “we are waiting to see how the rest of the year goes by,” but “these new developments of course are positive and we may not need to borrow as much as we did.”
The inter-agency Development Budget Coordination Committee earlier lowered its collection targets for the BIR and Customs due to subdued economy in the wake of the coronavirus pandemic.
“We knew that demand is down therefore VAT collections would be down. Our excise tax collections were down because, again, the demand for cars is down and demand for practically everything has dropped,” the finance chief said.
Earlier, Domiguez said the national government will borrow a total of P3 trillion in 2020 to bridge its widening budget deficit amid the COVID-19 crisis that dragged down tax and non-tax revenues.
As of July, the Duterte administration had borrowed a record P1.856 trillion.
The BIR and Customs, meanwhile, are tasked to collect P2.192 trillion this year, lower than their actual revenue haul last year of P2.8 trillion.
The BIR’s goal was reduced by 3 percent to P1.686 trillion from an earlier P1.744 trillion, while Customs’ target is now at P506.15 billion, lower by 6 percent compared with the previous estimate of P542 billion.