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GDP declines to 508%: Philippines unable to achieve tax target of P1.456tr  

GDP declines to 508%: Philippines unable to achieve tax target of P1.456tr  

MANILA: The Bureau of Internal Revenue’s (BIR) failed to get P1.456-trillion goal for the year, which was based on a 6.5-7.5% economic growth assumption that is now probably out of reach. But the Gross domestic product grew just 5.8% in the nine months to September.

The BIR exceeded its monthly targets only twice this year: in September when it collected P105.71 billion or 2.64% above the P102.987-billion program that month and in July when collections reached P119.94 billion or 0.05% above the bureau’s P119.883-billion goal. BIR accounts for more than 70% of the state’s total revenues. With the latest tally of P1.098 trillion, it still needs to collect P358.104 billion in the last two months of the year to meet its 2014 target.

BIR is resigned to the likelihood it will miss its collection goal this year, partly as the Philippine economy itself falls short of official target, Commissioner Kim S. Jacinto-Henares said last week.

“Realistically, I don’t think we will meet the target,” Ms. Henares said in a telephone interview, when asked if the BIR could still meet its collection goal for 2014.

Despite the prospect of a missed 2014 target, Ms. Henares said BIR will continue to improve its collection to support the government’s development priorities.

Sought for comment, Bank of the Philippine Islands associate economist Nicholas Antonio T. Mapa said in a phone interview that the market would likely be unfazed if BIR falls short of target this year. “I don’t think it will affect the market in any way. They (BIR) have performed quite well and above expectations,” he said.

By end-October, BIR collections totaled P1.098 trillion, up 10.54% from P993.54 billion in 2013’s comparative 10 months but P93 billion or 7.81% short of a P1.19-trillion target for the period.

Mr. Mapa said government spending has been the bigger concern. “Even if we are running better in terms of collections, disbursements and allocations have not been commensurate,” Mr. Mapa said. “The bigger concern of the market is the slackening underspending of the government.