The Bureau of Internal Revenue posted higher collections in the first two years under the Duterte watch compared with those the previous administration.
Data submitted by the BIR to the Finance Department showed the collection performance averaged 96.7 percent in the first two full years under the Duterte administration, compared with an average of only 94.5 percent in the full five years of the Aquino government.
The BIR said while the tax effort under the previous administration did not go beyond 11 percent, it rose to 11.27 percent in 2017 and 11.26 percent in 2018 under the leadership of President Rodrigo Duterte.
The BIR attained 97.35 percent (P1.78 trillion of P1.83 trillion) and 96.04 percent (P1.96 trillion of P2.04 trillion) of its collection target for 2017 and 2018, respectively, compared to only 86.12 percent (P1.44 trillion of P1.67 trillion) in 2015 with a tax effort of 10.82 percent.
The 2015 goal attainment was significantly lower than the previous year’s 91.65 percent (P1.33 trillion of P1.45 trillion) with the tax effort at 10.56 percent.
Data showed that the BIR performed better with a 97.05 percent (P1.22 trillion of P1.253 trillion) accomplishment of its target and a tax effort of 10.54 percent in 2013. It collected 99.23 percent (P1.06 trillion of P1.066 trillion) of its target in 2012, but with a tax effort of 10.02 percent and 98.31 percent (P924 billion of P940 billion) in 2011, with a tax effort of 9.52 percent.
Data from the Bureau of the Treasury showed that this year, the BIR posted a 13-percent year-on-year growth in the first quarter.
BIR’s total revenue in January to March hit P468.2 billion, up by 11 percent or P45.1 billion from last year’s first-quarter achievement, the Treasury said.
Tax reforms led to the strong performance of revenue collection agencies under the Duterte watch, with total revenues growing 15.2 percent from P2.473 trillion in 2017 to P2.850 trillion in 2018, the first year of implementation of the Tax Reform for Acceleration and Inclusion law.
Tax revenues grew 14 percent from P2.250 trillion in 2017 to P2.565 trillion in 2018. The 2018 tax effort of 14.7 percent of GDP was the highest in 20 years, according to Finance Secretary Carlos Dominguez III.
The country’s debt-to-GDP ratio also continued its downward trajectory under the Duterte administration despite the ambitious infrastructure buildup, with the national government debt in relation to GDP at 42.1 percent in 2017 and falling further to 41.9 percent in 2018.
Global credit watchdog S&P Global Ratings upgraded the country’s investment-grade score to “BBB+” from “BBB” on April 30, citing the Philippine economy’s strengths that included the tax reform program and higher revenue collections which enabled the government to finance the “Build, Build, Build” infrastructure program.
The upgrade is a notch away from “A-” which is within the much-coveted “A” rating category.
Aside from tax reform, S&P also cited other initiatives of the government such as the liberalization of the rice sector, strengthening of the Bangko Sentral ng Pilipinas’ charter and improving the ease of doing business.
Dominguez said “S&P Global’s credit rating upgrade for the Philippines by one notch higher to “BBB+” was an undeniable tribute to President Duterte’s unwavering commitment to bold reforms that are crucial to sustained and inclusive growth—and to his strong political will to get these tough initiatives done at the soonest.”