DOF commits improved revenue, proposes budget cuts

DOF commits improved revenue, proposes budget cuts

- in News, Philippines

The Department of Finance (DOF) has committed to further improve the collections of the state’s main revenue agencies, which reported “promising growth figures” in tax revenues of 8.8 percent in the first half of 2017 compared to the same period last year.

Finance Secretary Carlos Dominguez III made the commitment on behalf of the Bureaus of Internal Revenue (BIR) and of Customs (BOC) as the Senate finance chaired by Sen. Loren Legarda submitted for plenary approval the DOF’s proposed budget for 2018 amounting to PhP19.73 billion.

In his presentation last week before the Legarda-chaired committee on the DOF’s 2018 budget proposal, Dominguez pointed to the Department’s positive fiscal performance, which showed total revenue collections improving by 4.1 percent, from P2.109 trillion in 2015 to P2.196 trillion pesos in 2016. Dominguez said the DOF’s proposed 2018 budget is lower by 16 percent compared to the preceding fiscal year, which sets the example for other government agencies to utilize their respective allocations prudently and efficiently.

Over the same period, the BIR improved its collection by 9.3 percent from P1.433 trillion to P1.567 trillion, while the BOC improved 7.8 percent from P367.5 billion in 2015 to P396.3 billion in 2016, Dominguez informed the Legarda committee.

For the first six months of 2017, Dominguez said total revenues grew 6.8 percent from the same period last year from P1.101 trillion t0 P1.176 trillion, while tax revenues rose 8.8 percent from P982.9 billion to P1.069 trillion.

“Other revenue-generating agencies have also achieved huge improvements in its collection by 14.8 percent. Overall, we have achieved a strong tax revenue growth rate of 9.1 percent in 2016,”

“We can also expect further improvements in our 2017 collections due to the ongoing administrative reforms and, hopefully, the early beneficial effects of tax reform,”

“These are promising growth figures, and our main revenue agencies are committed to maintaining this momentum,”

– Finance Secretary Dominguez

After only two about hours, Legarda closed the committee deliberations on the DOF’s 2018 budget proposal, saying, “Thank you very much to the DOF team. Your budget is being submitted.”

The 2018 proposed budget of the DOF and its attached agencies, dropped by P3.5 billion from 2017 because majority of the investment outlays, and property, plant and equipment were already provided through this year’s budget.

“The DOF voluntarily submitted a lower budget for 2018 compared to the preceding year to set an example for other departments to operate efficiently,”

– Dominguez, in a previous statement.

Along with reductions in the capital outlays of other DOF-attached agencies, this 2018 budget cut for the DOF, which has a P21.30 billion outlay this year, was also largely the result of the significant decline in the allocation for the Bureau of Treasury (BTr), whose P6.46 billion budget for 2017 went down to P4.36 billion for 2018.

For 2017, the BTr’s allocation represented a 288-percent hike from the previous year owing to its capital subscriptions to foreign financial institutions, including the Asian Infrastructure Development Bank.

Of the P19.7 billion proposed DOF budget for the next fiscal year, P17.97 billion covers new general appropriations, while P1.75 billion accounts for automatic appropriations, of which P602 million is set aside for retirement and life insurance premiums, and P1.152 billion will go to the Special Accounts in the General Fund for several programs under the BIR, BOC and the Insurance Commission (IC).

Camarines Sur Rep. Luis Raymund Villafuerte, who earlier sponsored the DOF’s  proposed appropriations in the House of Representatives, said that “the Department will continue to expand its programs, projects and services—particularly the BIR’s Revenue Administration Program, which comprises 79 percent of its budget; the BTr’s Financial Asset Management Program, which also comprises 79 percent of its budget; and the BOC’s Customs Revenue Enhancement Program, which comprises 38 percent of its total budget,” despite the 16 percent reduction.

For the Office of the Secretary, its allocation also decreased from P1.62 billion in 2017 to P1.38 billion in 2018.

The allocations in 2018 for other DOF-attached agencies also declined.

These include the BOC, from P3.82 billion in 2017 to P3.11 billion in 2018; BIR, from P8.57 billion to P8.04 billion; IC, from P7 million to P6 million; Securities and Exchange Commission, from P646.86 million to P629.87 million; and Central Board of Assessment Appeals, from P19.11 million to P18.63 million.

The budget of the Privatization Management Office went up by P21.79 million from P54.23 million in 2017 to P76.01 million in 2018, along with the Bureau of Local Government Finance from P263.10 million to P305.13 million, and the National Tax Research Center from P51.20 million to P57.43 million.

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