By Eileen Mencias
Finance Secretary Carlos Dominguez said The Development Budget and Coordination Committee slashed its tax revenue target to P2.2 trillion from P3.4 trillion.
The budget deficit ballooned to P740.7 billion at the end of August, more than five times larger than last year’s level as tax collections fell 12% to P1.66 trillion.
Dominguez blamed Covid-19 for the revenue shortfall as the lockdowns implemented by the government to slow the spread of the virus weighed heavily on the country’s economy in the second quarter.
Government revenues fell almost 8% year on year at end-August with only the Bureau of the Treasury reporting an increase in collections.
During the hearing of the Senate Committee on Finance, Dominguez said the Duterte administration borrowed $9.9 billion from the country’s development partners and commercial sources to cover the revenue shortfall.
“Remember that if there is anything this Covid19 did it is to inject a large amount of uncertainty,” Dominguez told Senator Franklin Drilon who asked about the revisions in the fiscal targets.
Dominguez expects tax collections to improve in the coming months as the economy gradually reopens.