DoF not expecting any revenue-target changes

The Department of Finance (DoF) said it expects no change to its 2026 revenue targets despite economic headwinds, the slowdown in infrastructure spending, and weak revenue collection from key industries.

“Right now, we haven’t talked about the targets yet but I don’t think there will be any changes,” DoF Undersecretary Rolando T. Ligon, Jr. told reporters on the sidelines of the SGV Tax Symposium on Monday.

The government has set a PHP 4.81-trillion revenue target for the year, of which PHP 4.44 trillion will come from tax revenue and PHP 365.12 billion from non-tax revenue.

The Bureau of Internal Revenue (BIR) is expected to raise PHP 3.39 trillion in tax revenue, with the Bureau of Customs (BoC) set a target of PHP 1.01 trillion.

“The BoC is above the target. The BIR is still struggling. Hopefully, they will be able to deliver by the end of the year,” Mr. Ligon said.

At the end of September, the BIR’s gross collections hit PHP 2.465 trillion, 1.7% behind the pace against its PHP 2.51-trillion target for the period.

“We are facing some economic headwinds, including a slower pace of public infrastructure spending which is really impactful when it comes to our revenue collection,” BIR Commissioner Charlito Martin R. Mendoza said on the sidelines of the same event.

“Our revenue from banking and gaming has also been low,” he added.

Despite the shortfall, he said the BIR remains “cautiously optimistic” about meeting its full-year revenue target, adding that gross collections rose 5.6% year on year in the first nine months.

“We remain cautiously optimistic that we will still be able to meet our goal for this year. But then again, despite that, we have grown by 5.6% for the first nine months of the year. And I think that is significant given the economic headwinds that we are facing,” Mr. Mendoza said.

Asked what could drive collections in the last three months of the year, he cited a pickup in infrastructure spending and value-added tax (VAT) collections from digital service providers (DSPs).

“I think our government infrastructure projects are already picking up. When it comes to public infrastructure spending, the multiplier effect is big. So it really significantly impacts our collections,” he said.

“Our collection of VAT on DSPs is good. In fact, we’ve almost met the full year projection,” he added.

He said the BIR is also hopeful of stronger collections next year as infrastructure spending recovers.

“Hopefully, our outlook will be better by next year, especially for the first quarter where we expect that the pace of public infrastructure spending to speed up,” he added.

Infrastructure and other capital outlays fell 36% to PHP 457 billion in the seven months to July.

This year, the government has budgeted PHP 931.54 billion for infrastructure and other capital outlays.

Meanwhile, the BoC collected PHP 757.406 billion in the first nine months, exceeding its PHP 748.494-billion target for the period by 1.2%.

“We are on track,” BoC Commissioner Ariel F. Nepomuceno said on the sidelines of the same event, even in the face of weaker volumes.

“From what I understand, consumers are still holding back. So, we don’t expect the volume to be the same as last year. But we’re still confident that with collection efficiencies, we are still going to hit our targets,” he added.

Between Oct. 1 and 19, the BoC collected PHP 52.5 billion, equivalent to 53.5% of its collection target for the full month. — Justine Irish D. Tabile