For the first half of 2014, the Philippines recorded a tax to GDP ratio of 13.7% of GDP, marking an increase from 13.6% in the first half (H1) of 2013 and 12.6% in H1 2010. The revenue to GDP ratio for the first half of 2014 was at 15.6%, likewise growing from 15.3% in H1 2013 and 13.8% in H1 2010. These sustained growths in revenues brought the fiscal deficit in the first six months of the year to 0.9%, well-within the program of 2.1%.

The Bureau of Internal Revenue (BIR) posted collections amounting to 10.7% of GDP in the first half of the year. Bureau of Customs’ (BOC) collections was marked at 2.9% of GDP, the highest recorded by the Bureau since 2010. The Bureau of the Treasury (BTr) recorded collections of 1% of GDP.

Both revenue and tax collections have outpaced the 9.2% nominal GDP growth rate for the first semester of the year, with total revenues up 11.2% year-on-year and tax revenues higher 10.5% year-on-year.

“Coming on the heels of the news that we beat expectations with a 6.4% GDP growth in Q2, our tax and revenue to GDP numbers show that our resolve to sustain this growth is ever stronger. These figures likewise indicate that aggressive reforms that we have started in the Bureau of Customs late last year continue to translate to more fiscal headroom. By committing to keep up the sound performance of our revenue-generating agencies and push through with our legislative agenda, I believe we are on track to meet our tax and revenue goals for the year,” Finance Secretary Cesar V. Purisima said.

Key legislative priorities include the Rationalization of Fiscal Incentives, the Tax Incentives Management and Transparency Act, the Rationalization of the Mining Fiscal Regime, the Customs Modernization and Tariff Act, removing investment restrictions in specific laws cited in the Foreign Investment Negative List, as well as passing amendments to the Build-Operate-Transfer Law.

“There is still much room for improvement to achieve our goal of 16.6% tax effort in 2016. However, these efforts are at risk by certain tax-eroding measures pending in Congress. We call on our colleagues in Congress to advocate for fiscal responsibility to assure we do not fall back into the vicious cycle of fiscal erosion and slow growth which we have worked hard to get out of,” Purisima added.

The program revenue to GDP ratio for 2014 is at 15.7% while program tax to GDP ratio is at 14.7%.