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.
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 |
Stocks in U.S. Slide on Greek Debt Concern, Slowing of Factory Production U.S. stocks retreated, extending a two-week slump for the Standard & Poor’s 500 Index, as Greece sought additional bailout funds and a report showed that manufacturing growth in the New York region cooled. Lowe’s Cos., the second-largest U.S. home improvement retailer, dropped 3.6 percent after cutting its full-year earnings forecast. NYSE Euronext tumbled 13 percent as Nasdaq OMX Group Inc. (NDAQ) and IntercontinentalExchange Inc. (ICE) pulled their takeover bid. AMR Corp. (AMR) and JetBlue Airways Corp. (JBLU) added at least 4.8 percent after JPMorgan Chase & Co. (JPM) raised its ratings for the companies, citing prospects for lower fuel costs. The S&P 500 dropped 0.6 percent to 1,329.47 at 4 p.m. in New York after gaining as much as 0.4 percent. The Dow Jones Industrial Average slumped 47.38 points, or 0.4 percent, to 12,548.37. The 30-stock gauge declined during the first two weeks of a month for the first time since July 2009.
Ten-year Treasury notes fell as investors sought safety as Greece sought additional bailout funds. Bills remained near record lows as Treasury Secretary Timothy F. Geithner said he has taken action to stave off the federal debt limit until Aug. 2, using accounting measures that involve two retirement funds. “There is a lot of cash looking for short-term paper that doesn’t have anywhere to go, and it’s keeping note yields near zero,” said Thomas Simons, a government debt economist in New York at Jefferies Group Inc., one of 20 primary dealers that trades with the Federal Reserve. “As bill supply declines, expect more of the same in the very front end.” Benchmark 10-year note yields fell two basis points, or 0.02 percentage point, to 3.15 percent at 5 p.m. in New York, according to Bloomberg Bond Trader prices. The 3.125 percent note maturing in May 2021 rose 6/32, or $1.88 per $1,000 face amount, to 99 26/32. The yield fell on May 13 to 3.13 percent, the lowest level since December. Six-month rates were at 0.07 percent, compared with the record low 0.0305 percent set May 6. Three-month bill rates were at 0.02 percent, almost the lowest level since they went negative during the financial crisis. Treasury bills, notes and bonds fluctuated as Geithner wrote lawmakers today to say he has declared a “debt issuance suspension period,” a technical measure that allows him to free up borrowing room from the Civil Service Retirement and Disability Fund and the Government Securities Investment Fund. |
Oil Extends Drop as Concern Eases Over Mississippi Floods; Gasoline Slumps Oil dropped for a second day in New York after the opening of spillways curbed speculation the Mississippi River will flood refineries and disrupt fuel supplies in the world’s biggest crude-consuming nation. Futures fell as much as 0.6 percent after declining to the lowest in more than a week yesterday. Louisiana opened 11 of the 125 gates at the Morganza floodway, allowing the Mississippi to pour into the Atchafalaya River basin in an attempt to save Baton Rouge and New Orleans from inundation. Gasoline plunged to a two-month low. “Worries about the Mississippi River overflowing and shutting a number of refineries have dissipated with the opening of the spillway,” said Carl Larry, director of energy derivatives and research at Blue Ocean Brokerage LLC in New York. “The biggest impact has been in the gasoline market, which is dragging the rest of the complex lower.” Crude for June delivery slipped as much as 55 cents to $96.82 a barrel in electronic trading on the New York Mercantile Exchange and was at $96.93 at 9:10 a.m. Sydney time. It fell $2.28, or 2.3 percent, yesterday to $97.37, the lowest since May 6. Prices are 38 percent higher the past year. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
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