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By Chino S. Leyco, Reporter
PHILIPPINE economic managers have agreed to
reduce the tax collection targets of the Bureaus of Internal Revenue
(BIR) and of Customs for next year.
The Development and Budget Coordinating
Committee (DBCC) cut BIR’s collection goal to P844.90 billion from
the original P844.95 billion.
The inter-agency body, which sets the
country’s macroeconomic targets, also trimmed Customs’ goal by
P18.8 billion to P235.6 billion from the original P254.4 billion.
Both agencies account for at least 80 percent of
the government’s total revenues.
Including revenues emanating from other
agencies, the govern-ment’s total target however was raised to
P1.09 trillion from the original P1.108 trillion.
DBCC earlier is targeting to collect a total of
P1.108 trillion in tax revenues next year and nontax revenues of
P127.3 billion, or total revenues of P1.236 trillion.
Of the non-tax revenues amount, income
from the Bureau of the Treasury is seen to hit P57.3 billion, while
proceeds from privatization are expected to hit P29.7 billion.
Nontax revenues from other sources such as fees
and charges from state agencies are expected to hit P40.3 billion.
The finance department is currently aiming a
balanced budget at end-2008, as President Arroyo is trying to
restore the country’s revenue and tax effort to pre-Asian
Financial Crisis levels.
The government’s tax effort fell steadily from
a high of 17 percent of economy in 1997 to 12.4 percent in 2004. The
BIR tax effort plunged from a high of 13 percent in 1997 to 9.7
percent and back to 10.8 percent last year.
Multilateral lending agencies like World Bank,
Asian Development Bank, and International Monetary Fund, along with
rating agencies Standard and Poor’s, Moody’s Investor Service,
and Fitch Ratings want the Philippines to improve its tax effort.
Ratings agencies have criticized the
government’s reliance on its privatization program to generate
revenues.
Local borrowings raised in Q1
For the first quarter next year, the government
raised its planned borrowings from the local market.
In a memorandum issued to government securities
eligible dealers, the Bureau of Treasury said it plans to borrow P84
billion in the first three months, higher than the P63 billion
programmed in the first quarter this year.
The first-quarter borrowing plan is in line with
the government’s earlier announcement that it would source a
bigger portion of its funding requirements next year from the
domestic market to stem the peso’s rapid appreciation. The local
currency is Asia’s best performer so far this year, rising 18.8
percent against the dollar.
In the memorandum, the bureau said it plans to
sell P39-billion worth of Treasury bills and P45 billion worth of
Treasury bonds.
About P298.43 billion of the total amount to be
borrowed this year would be used to pare down maturing domestic and
foreign debt while P82.52 billion would be used to finance the
government’s budget shortfall.
At end-November, domestic borrowings dipped 12.5
percent to P303.96 billion. The government borrowed P415.95 billion
from domestic and foreign creditors in the first 11 months this year
or P176.44 billion lower than the P592.39 billion raised in the same
period last year.
The amount borrowed at end-November
however was still P35 billion above the P380.95 billion programmed
for the period. This was due to the government’s efforts to take
advantage of a strong peso and low interest rates to pare down its
debt.
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