BIR misses April collection target
Four-month tally exceeded goal by 0.3%
By Michelle Remo
Philippine Daily Inquirer
MANILA, Philippines—Collections of the Bureau of Internal Revenue fell short of its target in April as treasury bills and bonds trading, a taxed activity, generated less-than-programmed revenues, the agency reported on Monday.The BIR was quick to add, however, that cumulative tax collection from January to April remained above the target for the four-month period as tax audits and collection efforts were intensified. The BIR is the biggest revenue earner among line agencies and its revenue-generation performance greatly influences the national government’s ability to meet its own deficit-reduction goals. Tax collection for April amounted to P103.39 billion, or 1.5-percent short of the P105.12-billion target for the month. From January to April, the BIR collected P302.94 billion, exceeding by 0.3 percent the target of P302.16 billion for the period. The tax agency said collections for April and in the first four months were higher than those recorded in the same periods last year by 13 percent and 14 percent, respectively. Internal Revenue Commissioner Kim Henares said she was pleased with the performance of the tax bureau’s personnel, but acknowledged that the country needed much more resources to sufficiently cover all the country’s social services requirements, especially education and health. “I think, through hard work, commitment and dedication to perform, my people at the BIR continue to prove that the agency can meet the government’s revenue expectations. However, we know this is not yet enough to meet the health and educational needs of the country. We must continue to increase the BIR’s performance through reforms,” Henares said. The BIR recently crafted its “5-Year Strategic Plan” through 2016 under which specific reforms in tax collection strategies are indicated. These include strengthened auditing of large taxpayers and regular filing of tax-evasion cases against tax cheats. For 2011, the BIR is tasked to collect P940 billion. Henares has expressed confidence that the full-year goal will be attained. The BIR’s target is consistent with the national government’s goal of reducing its budget deficit to P300 billion this year from P314 billion in 2010. The deficit ceiling set for this year is equivalent to 3.2 percent of the estimated gross domestic product of the country. Under the Aquino administration’s fiscal goal, the deficit-to-GDP ratio should be reduced gradually until it hits 2 percent in 2016.
91-day T-bill rate rises to 1.889%
Philippine Daily Inquirer
MANILA, Philippines—The Bureau of the Treasury on Monday rejected all bids for the six-month and one-year government securities, preventing what could have been a sharp jump in interest rates from historic lows.
The government accepted some bids for the 91-day treasury bills, pushing the yield on the benchmark debt paper to 1.889 percent, up 1.321 percentage points from the record low of 0.568 recorded in the previous auction held two weeks ago. The rate could have been higher if all bids were accepted, the Treasury said. On the other hand, with the total rejection of all bids for the six-month and one-year debt paper, the interest rates for the 182- and 364-day bills remained at 0.95 percent and 2.032 percent, respectively. National Treasurer Roberto Tan said in a briefing following Monday’s auctions that the move to reject most bids was meant to ensure the latest interest rates would not be too far from levels seen in the secondary market. The government was originally targeting to raise P1.5 billion from the sale of three-month government securities, but ended up accepting only P1.4 billion. It was also supposed to sell as much as P3.5 billion and P4 billion worth of six-month and one-year bills. Some analysts, however, said the move of banks to seek higher interest rates was expected given that the historically low interest rates did not make sense for prudent investors. They said the record-low interest rates seen two weeks ago were unsustainable as investors could simply put funds in other instruments that gave higher yields. The drop in treasury bill rates to very low levels two weeks ago was attributed to the growing liquidity being managed by banks in the country.—Michelle V. Remo | 
