TEVES SAYS REVENUE TARGET OF P975B STAYS
MANILA, JUNE 2, 2006 (STAR) By Des Ferriols - The government, seeking to eliminate budget deficits by 2008, has not changed its P975-billion revenue target for this year, Finance Secretary Margarito Teves said yesterday.
"I would like to emphasize that our 2006 revenue target of P975 billion remains unchanged," Teves told a press briefing yesterday, after reports that the Bureau of Internal Revenue (BIR) is pressing for a cut in its collection target.
"We are committed to meeting our targets and achieving a budget deficit of no more than P125 billion for the year," Teves said.
The Arroyo administration has made a commitment to collect P975 billion in revenues this
year to be able to reduce its deficit to P125 billion.
However, the BIR has been having a hard time meeting its targets and asked the DOF to adjust its goals.
According to Teves, the DOF could reallocate the collection target but the bottom line target for the whole year would not change.
According to Teves, the DOF would review its agency targets with the BIR, Bureau of Customs and the Bureau of Treasury to assess their May and June numbers.
"This may lead to an internal reallocation of target within the agencies but let me emphasize that our year-end target will remain the same," Teves said.
Last year, the budget gap was P146.5 billion, equivalent to about 2.7 percent of gross domestic product (GDP). The Arroyo government made a commitment to cut this down further to at least 2.5 percent of GDP this year and to ultimately balance the budget by 2008.
Teves said an "internal reallocation" of the revenue targets was possible but there would be no change in the total revenue collection target.
"We realize that meeting all our targets is critical to investor confidence and sustained growth, and we will take every necessary measure to ensure that we will achieve these goals," Teves said.
The BIR missed its target by P7 billion which it attributed to the unexpected use of tax credit certificates to offset corporate income tax payments at the end of the fiscal year on April 15.
Teves characterized the increase in TCC use as "significant" and admitted the government was at a loss as to exactly how much TCCs were in circulation that could potentially erode future income tax collections.
Nevertheless, Teves said there was still a surplus in April largely due to the decline in spending as the Arroyo administration continued to use the 2005 reenacted budget.
Actual disbursement, according to Teves, reached only P77.4 million, seven percent lower than the same period last year when total spending amounted to P83.4 million.
The April fiscal performance brought the year-to-date total deficit to P50 billion, down 16.9 percent compared to P60.1 billion last year.
Total revenues, on the other hand, were 16.1 percent higher than last year, amounting to P300 billion compared to P258.4 billion over the same four-month period in 2005.
On the other hand, total spending amounted to P350 billion for the first four months, up 9.9 percent compared to last year’s P318.5 billion.
Teves said that aside from the slowdown in spending, interest expense was also significantly lower this year at P24.7 billion for April alone, compared to last year’s P26.9 billion.
Chief News Editor: Sol Jose Vanzi
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