BIR, BOC seen missing 2025 targets
Government revenue collections from the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) will most likely come in below official targets this year amid “extraordinary” circumstances, including the widening probe into anomalous flood control projects, Finance Secretary Frederick Go said.
Asked to assess the revenue performance of both agencies, Go said collections this year were softer than the targets set by the Development Budget Coordination Committee of P3.23 trillion for the BIR and P1.06 trillion for the BOC.
“It’s a very extraordinary year. I think the previous performances cannot be used as a basis to compare against what happened this year. We were under really extraordinary circumstances,” he said in an interview with reporters.
“I think it’s (revenues) expected to be softer,” he added.
As of end-October, the BIR had collected P2.65 trillion, while the BOC recorded P784.6 billion. As it is, BIR Commissioner Charlie Mendoza has already given a conservative estimate that the agency will bring in P3.1 trillion this year.
Go pointed to the ongoing investigation into alleged flood control corruption as a key factor weighing on revenue performance.
“The whole key to all of this is for us to get over the hump of this public works investigation. The sooner people move on from it, the better for the economy and the better, therefore, for revenue collection. So, if all goes according to plan, then we should be looking at a much brighter 2026 in the first quarter,” he said.
For now, Go said he remains confident in seeing an economic rebound if there are “proper prosecution, proper restitution, and genuine reform in the public works arena.”
The softer revenue performance comes as economists flag growing fiscal pressures linked to the same corruption issue.
In a commentary, analysts at Nomura said the government’s fiscal balance was projected to return to a deficit of P152 billion in November, from a small surplus of P11.2 billion.
This outlook, they said, reflects “a drop in revenue growth as a result of the weakening economy, even as non-interest expenditure growth likely continued to contract due to the ongoing corruption scandal.”
The good news is price gains would likely stay benign, which can give the central bank more room to cut rates—benefiting borrowers like the government. Nomura added that inflation may settle at 1.5 percent in December, which they attributed to “stable energy and fuel prices as well as rice prices remaining broadly unchanged.”
“Core inflation likely remained stable, due to weak demand-side conditions, reflecting negative spillovers from the drop in government spending due to the corruption scandal,” the bank said.
