Finance Secretary Carlos G. Dominguez III said the government is on track to achieving its targets for high growth and economic inclusion as it continues to enjoy a sound fiscal position notwithstanding the massive investments in its centerpiece “Build, Build, Build” (BBB) infrastructure program.
Dominguez said the higher excise revenue take from the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law should rise further with the succeeding packages of the Comprehensive Tax Reform Program (CTRP) that the Department of Finance is pushing in Congress.
He added the shift to tariff from quantitative restrictions (QR) on rice imports should also give an extra lift to revenues and pull down the retail cost of the staple for the benefit of low-income families.
“All in all, we remain in a good fiscal position notwithstanding the massive investments the BBB program entails. We are well on our way to achieving all our growth and economic inclusion targets. Our optimism is supported by our prudence. The future looks well,” Dominguez said.
He also added that an even more aggressive spending from hereon on the infrastructure program and other poverty-reduction initiatives would allow the government to hit its target GDP expansion of 7 percent or better and reduce the poverty incidence of 14 percent of the population over the
The Philippine Statistics Authority earlier announced GDP growth averaging 6.8 percent in the first quarter. The industry sector posted the fastest growth of 7.9 percent, while the services sector expanded 7.0 percent and agriculture by 1.5 percent.
The services sector had the highest contribution to GDP expansion with 4.0 percentage points, followed by industry with 2.7 percentage points and agriculture with 0.1 percentage points.
Dominguez said that in the first quarter this year, government revenues reached P619.8 billion, a 16-percent year-on-year increase and also 16 percent above the January-to-March target.
The Bureau of Internal Revenue collected P423.1 billion, which was 14 percent higher than in the first quarter last year and 17 percent more than the programmed collection. The Bureau of Customs collected P129.8 billion, or a 25-percent hike from collections in the first quarter of the previous year.
“Our revenue collection from excise taxes introduced under TRAIN exceeded expectation. We believe it will continue doing so. We expect an average of 15.1-percent growth in revenues from 2018 to 2022. From 14.2 percent in 2017, we expect our tax effort to increase to 16.6 percent of GDP by 2022,” he said.
The finance chief also said national government spending expanded by 30 percent year-on-year to P313 billion in March.
“For the second straight month, disbursements outpaced revenues. We registered a P162.2-billion deficit in the first three months of the year. While significantly higher than the deficit recorded for the same period last year, our deficit falls within the programmed 3 percent of GDP,” he added.
Additional revenues will be provided by succeeding CTRP packages supplemented by an additional motor vehicle user charge now being considered by a technical working group at the House of Representatives, the removal of the value-added tax exemptions on domestic coal and on gaming, the proposal in Congress for a sharper increase in sin taxes, and the shift from QR on rice to tariff.