THE Department of Finance (DOF) has presented to the Senate its 2019 proposed budget of P56.86 billion under the cash-based scheme, which includes support for its attached agencies.
Under the new cash-based budget system, the DOF allocated P36.60 billion for government-owned and -controlled corporations. It also includes automatic appropriations of P1.37 billion for the department’s retirement and life insurance premiums, and special accounts in the General Fund for several programs of its attached agencies, namely, the Bureau of Customs (BOC) and Insurance Commission (IC), and unprogrammed appropriations of P210 million for the refund of the service development fee for the Philippines’s Nampedai property in Japan.
“This administration and the DOF are committed to maintaining fiscal stability, achieving revenue targets and driving strong economic growth—all for the benefit of the Filipino people. We hope this body will enable us to deliver on this commitment by approving this department’s proposed 2019 budget,” said Finance Secretary Carlos G. Dominguez III.
Dominguez told the Senate Committee on Finance that, aside from tax reform, the DOF has also been engaged in pushing further reforms to reduce red tape and curb corruption, broaden the base of the financial system, facilitate new and disruptive technologies, and negotiate Official Development Assistance for the “Build, Build, Build” (BBB) infrastructure program.
For 2019, the budget of the DOF and its attached agencies are as follows: Bureau of Internal Revenue (BIR), P8.1 billion; Bureau of the Treasury, P6.1 billion; BOC, P2.6 billion; Office of the Secretary, P843.3 million; Securities and Exchange Commission, P618.42 million; Bureau of Local Government Finance, P269 million; Privatization Management Office, P83 million; National Tax Research Center, P66.11 million; and the Central Board of Assessment Appeals, P20.6 million.
The DOF-proposed budget for 2019 of P18.68 billion based on the obligation-based scheme is 3 percent lower than the current year’s P19.31 billion.
TRAIN law
The Tax Reform for Acceleration and Inclusion (TRAIN) law, which was implemented at the start of 2018, contributed P26.6 billion in revenues in the January-to-July period. Revenue loss from personal income-tax reduction reached P70.8 billion.
From January to August of this year, total revenue collections reached P1.91 trillion, 19 percent higher than what the government collected last year. The amount makes up 67 percent of the total full year collection program.
The DOF said the 13.5-percent increase in the BIR’s collection is mainly due to the TRAIN law and “continued improvements” in tax administration, while the BOC expanded collections by 35 percent. Non-tax revenues went up by 35 percent compared to the previous year’s level. According to the DOF, government spending outpaced revenue growth in January to August, climbing to P2.2 trillion, 23 percent higher than last year’s record.
As a result, the cumulative fiscal deficit rose to P282 billion, a 60-percent spike compared to last year’s deficit level of P176.2 billion, as the government continued to finance its infrastructure program meant to boost economic growth.
The finance chief said that the Development Budget Coordination Committee (DBCC) revised the fiscal program for 2018, lowering the revenue target by P26.6 billion to account for the delay in the implementation of the electronic receipts and fuel marking programs.