The Development Budget Coordination Committee (DBCC) has revised its tax revenue projections for this year, trimming its overall target by 0.33% to P4.807 trillion, equivalent to 15.78% of the country's gross domestic product (GDP). This revised projection is 3.5% lower than the P4.983-trillion program under the 2026 Budget of Expenditures and Sources of Financing.
Data from the DBCC shows that tax revenues are now expected to account for P4.442 trillion or 92.4% of total revenues this year, a 0.7% decrease from the P4.474 trillion projected in December. The Bureau of Internal Revenue (BIR) collection target for this year was lowered by 1% to P3.393 trillion from P3.43 trillion previously.
Finance Undersecretary Rolando T. Ligon, Jr. explained that the lower target mainly reflected the ambitious goal set last year. He noted that BIR collections have increased by 9% from last year, but the set target was 25% more than the previous year.
In the first five months, BIR collections rose by 5.5% year on year to P1.434 trillion, exceeding the P1.424-trillion target for the period by 0.7%. The DBCC had tweaked its revenue collection targets after it lowered the GDP growth projection to 3.5-4.5% this year from 5-6% previously.
The DBCC also raised the Bureau of Customs' (BoC) revenue collection target by 0.7% to P1.011 trillion this year from P1.003 trillion previously. The higher BoC revenue projection reflected the agency's efforts to boost collections, as well as the weakening of the local currency against the US dollar.
Despite a three-month suspension of excise taxes on kerosene and liquefied petroleum gas (LPG), the BoC remains on track to hit its target this year. The government lifted the suspension this week after the Department of Energy certified that the average Dubai crude oil price in June fell to $79.45 per barrel, below the $80 threshold that triggers the temporary tax relief.
The DBCC also raised its nontax revenue forecast by 4.3% to P365.1 billion from P349.9 billion previously. Finance Secretary Frederick D. Go said the DBCC could again recommend suspending the excise taxes should average Dubai crude prices rise above $80 per barrel.
