THE National Government is on track to achieve its revenue target of P4.27 trillion, judging from the pace set by first-half collections, a Congressional think tank said.
The Congressional Policy and Budget Research Department (CPBRD) noted, however, that first-half revenue was driven by non-tax collections, casting doubt on the sustainability of recurring tax collections.
“The revenue performance for January-June 2024 suggests that the government is on track to meet its full-year revenue target,” the CPBRD said in a report.
“The first half performance, however, shows a notable divergence between tax and non-tax collections when compared to programmed targets,” it added.
Total government revenue for the first half of 2024 amounted to P2.15 trillion, according to Finance Secretary Ralph G. Recto’s Monday presentation to the House of Representatives appropriations panel.
Of the first-half collections, P1.83 trillion came from tax revenue, up 10.8% from a year earlier. The total missed by 2.8% the first-half revenue target.
“Tax revenue underperformed, with the actual collection of P1.83 trillion falling short of the P1.86 trillion goal. This shortfall was primarily due to (the performance of) BIR collections (P1.36 trillion as against P1.40-trillion target),” the CPBRD said.
The Bureau of Customs, whose collections are also classified as tax revenue, exceeded its first-half target with P455.5 billion collected in the first half, beating its target by 3%.
Non-tax revenue generated P314.2 billion during the same period, 46% higher than target. The surge in non-tax collections is due to higher collections by the Bureau of the Treasury (BTr) and other revenue streams, the CPBRD said.
The BTr said income rose 76% to P163.9 billion in the first half of 2023.
“Bureau of the Treasury income… is P71 billion higher compared to the same period in 2023; and other non-tax revenues… doubled from P62.1 billion to P121.1 billion in the same period,” the CPBRD said.
The CPBRD noted that the BTr took in more dividends from government-owned and -controlled corporations (GOCCs), after the Department of Finance ordered an increase in GOCC dividend payouts to the government to 75% from 50%.
The remittance of unutilized funds from GOCCs also boosted the BTr’s holdings, it added.
In May, the Philippine Health Insurance Corp. and Philippine Deposit Insurance Corp. remitted P20 billion and P30 billion respectively to the BTr.
“The government’s fiscal strategy to optimize existing financial resources through the mobilization of non-tax revenue represents a pragmatic approach to fiscal management and aligns with its commitment to increase funding for priority programs without enacting new taxes or resorting to additional borrowing,” it said.
While unutilized funds from GOCCs could be a potential source of funding for the government, it should address potential tax collection issues, the CPBRD said. “Sustained revenue growth is largely contingent on brisk growth in tax revenue.”
The CPBRD report was prepared by Novel V. Bangsal, David Joseph Emmanuel Barua Yap, Jr., Jhoanne E. Aquino, Rutcher M. Lacaza, Edrei Y. Udaundo, Pamela Diaz-Manalo, Julius I. Dumangas, Ricardo P. Mira, Arlene L. Tuazon, Lawrence B. Dacuycuy, Byron M. Bicenio, Christine Marie A. Mendoza-Walog, Noel Belarmino H. Sempio, Ray Leonard D. Denolo, Alexiz S. Taaca, and Romulo E.M. Miral, Jr. — Kenneth Christiane L. Basilio
