DBCC Navigates Economic Course Amidst Stellar Performance
The Development Budget Coordination Committee (DBCC) charts a robust course for the Philippine economy, ensuring alignment with the Medium-Term Fiscal Framework (MTFF) and positioning the nation among Asia’s top-performing economies in 2023.
Surpassing Revenue Expectations
The National Government’s fiscal landscape shines as revenue collections surpass expectations. Anticipated to exceed the targets set during the 184th DBCC meeting in April 2023, total revenues for the first nine months of the year soared to Php 2.84 trillion, showcasing a remarkable 6.8 percent year-on-year growth. Both tax and non-tax revenues demonstrated positive growth at 6.4 and 10.5 percent, respectively.
Actual revenue collections outpaced the program by 3.0 percent, propelled by heightened collections from the Bureau of Customs (BOC) and non-tax revenues totaling Php 152.57 billion. The projected total revenue collection for 2023 is estimated to range from Php 3.84 trillion to Php 3.90 trillion, surpassing the approved DBCC level of Php 3.73 trillion. Tax revenue is expected to reach Php 3.50 trillion to Php 3.55 trillion. The estimated revenue effort for 2023 is at least 15.7 percent, exceeding both the MTFF target and the 184th DBCC-approved level at 15.3 percent and 15.2 percent, respectively.
Tax Policy and Administration Reforms
In a bid to fortify tax administration and enhance revenue collection, the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) spearhead digitalization programs. These initiatives aim to eliminate corruption, enhance transparency, and simplify tax payment processes.
The DBCC collaborates closely with Congress to facilitate the passage of essential tax reforms, including measures on passive income, financial intermediaries taxation, real property valuation and assessment, excise tax on single-use plastics (SUPs), rationalization of the mining fiscal regime, motor-vehicle road users’ tax, excise tax on sweetened beverages and junk foods, tax on pre-mixed alcohol, value-added tax (VAT) on digital service providers, carbon taxation, capital market development, and the military and uniformed personnel (MUP) pension reform bill.
Accelerated Disbursement and Procurement Solutions
Government disbursement experienced significant acceleration, reaching 98.9 percent of the program by September 2023, up from 93.4 percent in June. The surge was fueled by robust third-quarter disbursements, totaling Php 3.82 trillion.
Supported by successful agency catch-up plans, government spending is set to further improve in the fourth quarter. Accelerated implementation of programs in infrastructure, transport, labor and employment, social protection, and education will be the primary drivers. The DBCC, through the Department of Budget and Management (DBM), remains committed to close coordination with agencies, especially those with low budget utilization rates.
Addressing Procurement Challenges Through Innovation
The DBCC is poised to tackle procurement bottlenecks head-on by mandating Early Procurement Activities (EPA) among government agencies in the coming year. This strategic move ensures timely procurement planning, commencing activities as early as the submission of the National Expenditure Program (NEP) to Congress.
By 2024, the Budget and Treasury Management System (BTMS), a crucial component of the Integrated Financial Management Information System (IFMIS), will be implemented. This initiative addresses major procurement bottlenecks, streamlining billing processes, and ensuring timely delivery of goods and services.
To foster efficiency, the DBCC encourages all government agencies, including State Universities and Colleges (SUCs), Government-Owned and Controlled Corporations (GOCCs), and Local Government Units (LGUs), to embrace secure and efficient digital payments for goods, services, and financial assistance distribution, in line with Executive Order No. 170, s. 2022.
Optimistic Outlook for Growth and Fiscal Targets
Given the better-than-expected revenue and spending performance, the DBCC maintains an optimistic outlook. The committee remains confident that growth and fiscal targets set under the Medium-Term Fiscal Program will be achieved.
