BIR exceeds collection target in July

MANILA, Philippines — Collections by the Bureau of Internal Revenue (BIR) in July exceeded the  revised target  amid a pickup in consumer spending, according to the Department of Finance (DOF).

In a press briefing, Finance Secretary Carlos Dominguez said BIR collections reached P126.72 billion in July, 2.08 percent higher than the agency’s revised goal of P124.14 billion.

“The major tax gains last month were seen in both excise and value-added taxes, signs that   consumer spending is starting to pick up,” Dominguez said.

However, historical data from the Bureau of the Treasury (BTr) showed this is nearly 30  percent lower than the BIR’s collection of  P180.34 billion in the same month last year.

Meanwhile, the finance chief also cited the collection efforts of the Bureau of Customs (BOC), which was able to raise P50.07 billion in July or  5.03 percent up from the P47.67 billion target.

Dominguez attributed this to higher volume of imports.

“This follows the above-target performance in June and signals rising economic activity,” he said.

Dominguez noted the above-target collection performance of the BIR and the BOC as signs that the economy is already starting to recover from the impact of the COVID-19 pandemic.

Aside from this, Dominguez said the manufacturing sector has also seen improvements as the economy gradually reopened.

“For instance, the value of production index for the month of June showed a smaller annual decline of 22.5 percent compared to the 31.2 percent decrease in May, and 41.2 percent in April,” Dominguez said.

“While the volume of production index in June shrank by 19.3 percent year on year, the decline was slower compared to May’s drop of 28.5 percent and 38.8 percent in April,” he added.

In addition, the DOF chief said the country’s overall manufacturing capacity reached 73 percent in June, up from 72.4 percent in May and 70.5 percent in April.

Meanwhile, he said the decline in the country’s merchandise trade eased to 19.9 percent, coming from a steep contraction of 35.3 percent in May and 59.5 percent in April.

“This slower decline in the country’s trade performance signals resumption of economic activities,” he said.

Dominguez reiterated that the Philippines is in a good fiscal position to respond to the coronavirus crisis.

“President Duterte’s prudent approach to fiscal and economic management has made us one of the strongest, most resilient, and credit-worthy economies in this region,” he said. “Even in this protracted struggle, we have the fiscal space for decisive action, and will continue to access favorable terms of credit from our development partners.”