Manila: Department of Finance (DOF) Secretary Ralph Recto stated that tax revenues need to grow by 10.2 percent annually from 2025 to 2028 to ensure a reliable revenue stream for the country. In a statement, Recto emphasized that this growth would push total revenues to nearly PHP6 trillion by the end of President Ferdinand R. Marcos Jr.’s term, and by 2030, total revenues would surpass the PHP7 trillion mark.

According to Philippines News Agency, Recto highlighted that in the medium term, revenue collections would be supported by increased administrative efficiency from the Bureau of Internal Revenue and Bureau of Customs, achieved through continuous modernization and digitalization. Additionally, non-tax revenues, the proposed General Tax Amnesty, and the extension of the Estate Tax Amnesty are expected to bolster collections. Last year, the DOF and its attached agencies collected PHP4.42 trillion in revenues, supporting the government’s PHP5.925 trillion expenditure. These revenues funded education for 24.54 million public school students, provided medical assistance to approximately 6.4 million patients in public hospitals, and supported PHP871.38 billion in local government funding.

Recto noted that for this year, the DOF is tasked with collecting PHP13.65 billion a day in revenues to address the PHP4.51 billion daily deficit and support the government’s PHP18.61 billion daily spending. As the nation’s needs continue to grow, Recto warned that proposals to lower the value-added tax (VAT) rate could lead to significant revenue losses, reducing public services, and may force the government to borrow even for basic operations, such as personnel salaries. He explained that the entire VAT collection for 2025, estimated to reach PHP1.39 trillion, can only fund nine months’ worth of payroll, premium, and pension for active and retired government workers. Additionally, PHP576 billion in total excise tax collections would not suffice to fund the PHP965-billion budget for education programs, including basic, tertiary, and technical-vocational education. Several bills filed in both chambers of Congress are advocating for a reduction in VAT to ease consumers’ burden amid rising prices.