The Philippine Department of Finance (DoF) expects no change to its 2026 revenue targets, even as the economy confronts headwinds, public infrastructure spending slows, and collections from key industries remain weak.

"Right now, we haven't talked about the targets yet but I don't think there will be any changes," DoF Undersecretary Rolando T. Ligon, Jr. told reporters on the sidelines of the SGV Tax Symposium, an event hosted by professional services firm SGV & Co., on Monday.

The government has set a P4.81-trillion revenue target for the year, of which P4.44 trillion is expected to come from tax revenue and P365.12 billion from non-tax collections. Within the program, the Bureau of Internal Revenue (BIR) is tasked with raising P3.39 trillion, while the Bureau of Customs (BoC) carries a P1.01-trillion target. Those targets underpin the government's budget for the year, making full-year delivery by both bureaus a key gauge of fiscal program execution.

"The BoC is above the target. The BIR is still struggling. Hopefully, they will be able to deliver by the end of the year," Mr. Ligon said.

As of end-September, the BIR's gross collections stood at P2.465 trillion, running 1.7% behind its P2.51-trillion target for the period.

BIR Commissioner Charlito Martin R. Mendoza, speaking on the sidelines of the same event, attributed the lag to broader economic pressures.

"We are facing some economic headwinds, including a slower pace of public infrastructure spending which is really impactful when it comes to our revenue collection," he said. "Our revenue from banking and gaming has also been low."

Despite trailing its program, the BIR remains "cautiously optimistic" about meeting its full-year goal, noting that gross collections rose 5.6% year on year in the first nine months.

"We remain cautiously optimistic that we will still be able to meet our goal for this year. But then again, despite that, we have grown by 5.6% for the first nine months of the year. And I think that is significant given the economic headwinds that we are facing," Mr. Mendoza said.

Asked what could drive collections in the final three months of the year, he cited a pickup in government infrastructure projects and stronger value-added tax (VAT) payments from digital service providers (DSPs).

"I think our government infrastructure projects are already picking up. When it comes to public infrastructure spending, the multiplier effect is big. So it really significantly impacts our collections," he said.

"Our collection of VAT on DSPs is good. In fact, we've almost met the full year projection," he added. The stream is a recent one: the Philippines brought digital services into the VAT net under Republic Act No. 12023, a 2024 law that required digital service providers, including foreign platforms, to charge the tax on sales to users in the country.

The BIR is also counting on stronger collections next year as infrastructure spending recovers. "Hopefully, our outlook will be better by next year, especially for the first quarter where we expect that the pace of public infrastructure spending to speed up," Mr. Mendoza said.

Infrastructure and other capital outlays fell 36% to P457 billion in the seven months to July. The government has budgeted P931.54 billion for infrastructure and other capital outlays this year, leaving just over half of the program still to be disbursed in the remaining months — the recovery Mr. Mendoza is counting on to speed up collections.

The BoC, which collects duties, taxes and fees on goods entering the country, meanwhile collected P7.406 billion in the first nine months, exceeding its P748.494-billion target for the period by 1.2%.

"We are on track," BoC Commissioner Ariel F. Nepomuceno said on the sidelines of the same event, even in the face of weaker volumes.

"From what I understand, consumers are still back. So, we don't expect the volume to be the same as last year. But we're still confident that with collection efficiencies, we are still going to hit our targets," he added.

Between Oct. 1 and 19, the BoC collected P52.5 billion, equivalent to 53.5% of its collection target for the full month. — Justine Irish D. Tabile

Source: BusinessWorld