Philippines First-Quarter Tax Collection Misses Target on Virus

The Philippine government’s tax collection missed its target in the first quarter as the coronavirus pandemic stalled the economy, according to the Department of Finance.

The government collected 600.9 billion pesos ($11.8 billion) in taxes and customs duties in the first three months of the year, short of its 757.1 billion pesos target and a decline of 10.2 billion pesos from the same period last year, the department said in a statement, citing preliminary data.

President Rodrigo Duterte on March 16 placed the country’s main island of Luzon in an enhanced community quarantine to slow the spread of the virus, and later extended it to April 30. Local governments in other areas implemented similar measures.

Finance Secretary Carlos Dominguez said the inter-agency Development Budget Coordination Committee estimates that state revenue will fall by 286.4 billion pesos this year if there is no economic growth and by 318 billion pesos if it contracts by 1%.

“Our tax collections are definitely going to be a bit lower than our original target, but as I said, these are things that we can finance,” Dominguez said. The country is “financially able” to meet the unexpected challenges of the pandemic, he said, citing strong economic fundamentals. Revenue collection as a percentage of GDP was 16.9% in 2019, the highest in 22 years, while the debt-to-GDP ratio was 41.5% and remained manageable, he said.

To contact the reporter on this story:
Ditas Lopez in Manila at dlopez55@bloomberg.net

To contact the editors responsible for this story:
Cecilia Yap at cyap19@bloomberg.net

Stanley James, David Watkins

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