With most economic activities in Luzon grinding to a halt in the latter part of March as a result of the enhanced community quarantine, actual collections by the Bureaus of Internal Revenue and of Customs amounted to P600.86 billion in the first quarter, or P10.17 billion less than the revenues collected in the same period last year, according to preliminary data submitted to the Department of Finance.
This amount of P600.86 billion is also P156.26 billion short of the P757.12 billion revenue target for the first quarter.
Collections for March took the biggest hit, as both bureaus only hauled in a combined P163.15 billion for the month, or P34.5 billion lower than the P197.64-billion take for the same month last year, and P85.36 billion short of the target of P248.5 billion for the period.
Malacañang’s implementation of the ECQ in Luzon to slow the spread of the 2019 coronavirus started March 16 and has since been extended to April 30.
Similar containment measures have also been implemented by local government units in other parts of the country.
Finance Sec. Carlos Dominguez III said that estimates by the Development Budget Coordination Committee showed that if the economy posts zero growth this year as a result of the health, social and economic impacts of the COVID-19 pandemic, the decrease in revenues would be around P286.4 billion.
If growth is negative one percent, then the revenue decline is estimated at P318 billion.
The original revenue collection goal set by the DBCC for the two main collection agencies was a combined P3.307 trillion for 2020. The BIR was tasked to collect P2.576 trillion of that target, while the BoC was to collect P731 billion.
“Our tax collections are definitely going to be a bit lower than our original target but as I said, these are things that we can finance,” the DoF chief Dominguez said, stressing that the sound economic policies put in place by President Duterte since 2016 has given the government ample fiscal headroom to meet the challenges of COVID-19.
From January 1 to March 31 of this year, the BIR collected a total of P455.45 billion, which is 2.86 percent or P13.41 billion below the actual amount of P468.86 billion collected for that period last year. The January-March collections is also 22.86 percent short of the BIR’s P590.43 billion target for that period.
The BIR’s Large Taxpayers Service) collected P284.39 billion from January to March, or 6.14 percent lower than last year’s figure of P302.98 billion.
The LTS also failed to reach its target of P386.19 billion for this period, falling short by 26.36 percent or P101.81 billion.
In March, BIR collections amounted to only P118.35 billion, which is P29.71 billion or 20.06 percent lower than last year’s P148.05 billion. The shortfall from the March 2020 target of P190.48 billion was 38 percent or P72.14 billion.
For the same month, the LTS collected P80.19 billion, which is 17.42 percent or P16.91 billion below the P97.1 billion collected in the same month in 2019. The March collection of the LTS is also 35.58 percent or P44.28 billion short of the target for that month of P124.47 billion.
The BoC’s collections, meanwhile, from January to March 2020 totaled P145.41 billion, which is a slight improvement of 2.28 percent over last year’s P142.17 billion, but 12.76 percent or P21.28 billion lower than the target of P166.69 billion for that period.
In the BoC, the March 2020 collections amounted to only P44.8 billion, or P4.79 billion lower than last year’s figure of P49.59 billion for the same month. It is also 22.78 percent or P13.22 billion short of the BoC’s March target of P58.02 billion.
But even with the significant decline in both bureaus’ revenue collections, Dominguez has assured the people that the country is “financially able” to meet the unexpected challenges of the pandemic because President Duterte has ordered economic managers since the beginning of his term to maintain fiscal discipline and exercise prudence in state spending.
The Finance chief cited, for instance, the country’s strong macroeconomic fundamentals, with gross domestic product growth averaging 6.4 percent since President Duterte took over in 2016, and the revenue effort or collection from taxes and other sources reaching 16.9 percent in 2019, which is the highest in 22 years.
Dominguez said the country has also maintained a manageable debt-to-GDP ratio of 41.5 percent in 2019, which is a vast improvement from the 70 percent in the past.
Inflation has also remained low at 2.5 percent in March, which is within the 2020 target of 2 to 4 percent, Dominguez noted.