THE Department of Finance (DOF) is seeking a higher budget for 2022 as it aims to implement modernization and digitalization programs that will help raise more funds amid the Covid-19 pandemic.
In his presentation before the Senate Committee on Finance on Wednesday, Finance Secretary Carlos G. Dominguez III said the proposed budget for DOF for 2022 under new appropriations is P21.24 billion, or 32.7 percent higher than its approved appropriations this year of P16 billion.
Despite the year-on-year increase, Dominguez was quick to point out that this is still 1 percent lower than its 2017 budget of P21.5 billion.
“The increase in next year’s funding will be spent for our modernization and digitalization programs to enhance our revenue enforcement capacity. These programs will allow us to effectively raise more funds to finance our pandemic response and economic recovery program,” Dominguez explained.
If automatic (P1.64 billion) and unprogrammed appropriations (P210 million), and the budgetary support for government-owned and -controlled corporations (GOCCs) (P95 million) are included, the total proposed DOF budget for 2022 is P23.18 billion. Apart from the modernization program, Dominguez also attributed the increase in the DOF’s budget for 2022 to the implementation of the corresponding salary adjustments for the employees of the Department and its attached agencies under the Salary Standardization Law (SSL).
The largest budget allocations of the DOF for 2022 are for the Bureau of Internal Revenue (BIR) with P10.9 billion, and the Bureau of Customs (BOC) with P4.35 billion—to be spent to further improve tax administration and hasten the digital transformation of these two main revenue agencies.
The proposed allocation for BOC’s capital outlay will also grow 21 times from last year’s budget because of the rollout of the P1.58-billion Philippine Customs Modernization Project.
Supported by the World Bank, the project aims to transform the BOC into a world-class customs agency by streamlining and digitalizing its systems and processes. It is also expected to be partially operational by 2023 and is scheduled to be in full operation by 2024, Dominguez said.
BIR’s financial expenses will also rise by 21 percent because of the interest expense and financing charges for the lease-purchase agreement between the Bureau and the Land Bank of the Philippines to provide regional BIR Offices with their own buildings to better serve the public.
96% budget hike for BTr
MEANWHILE, the Bureau of the Treasury’s budget for next year will surge by 96 percent to P4.23 billion in 2022 from P2.16 billion in 2021. However, the bulk of its appropriation for 2022 will be for national government operations, with only 26 percent for its regular operations.
These national government expenses, which make up 74 percent of the Treasury’s budget, include the Philippines’s quota subscriptions or equity contributions to continue being a member of different multilateral institutions. Such membership in various multilateral institutions gives the Philippines continued access to concessional financing and technical expertise to support key projects and programs and allows it to vote on policies and plans of action that these institutions undertake.
“Our equity contributions are pooled together with the contributions of other member-countries to fund projects and programs supported by these multilateral banks. In essence, the Philippines is both a contributor and a beneficiary of its equity investments in these multilateral institutions,” Dominguez explained.
The Office of the Secretary’s (OSEC) proposed budget is at P1.1 billion, or 30 percent more than its appropriations this year, owing to the increase in its maintenance and other operating expenses. These include operating requirements for projects such as the digital Philippine National Single Window that will allow the automation and streamlining of trade processes among the different regulatory agencies.
The OSEC will also improve the Philippine Tax Academy, an essential institution that trains all revenue agencies to improve their competitiveness and expertise. This includes the training of municipal treasurers and provincial treasurers.
The remaining five DOF-attached agencies—Privatization and Management Office, Bureau of Local Government Finance, Insurance Commission, Central Board of Assessment Appeals, and the National Tax Research Center—have a combined proposed budget of P723.2 million or around 3 percent of the total DOF budget.
The increases in their appropriations mainly owe to their respective information and communications technology infrastructure upgrades to support the ongoing modernization programs to prepare for the new economy, Dominguez said.