Fiscal Strength

   The national government’s proposed budget of PhP635.042 billion pesos for 2007 was 6.25 percent higher than the PhP597.663 billion proposed in 2006. Its bulk would be sourced from the two biggest revenue earners of the government, the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC),  

   The fiscal position of Region 5 in the General Appropriations Act (GAA) of 2007 stood at PhP0.221 billion or 3.34 percent more than its 2006 appropriation of  PhP17.492 billion.

Enhanced Revenue Generation by Regional Line Agencies

 

   Revenue generation in Region 5 from the BIR and BOC totaled PhP4.878 billion (both cash and non-cash)shared as follows: PhP3.822 billion from the BIR and PhP1.056 billion from the BOC.

 

   BIR’s collection was higher than the targeted PhP3.168 billion. Likewise, it was PhP0.915 billion higher than the PhP2.907 billion collected in 2006. Its collection efficiency was placed at 120.63 percent (Table 7.1). The top five performing revenue districts in the region in terms of collection efficiency were:(1) Virac with 154.20 percent collection efficiency rating; (2) Sorsogon City - 146.47 percent; (3) Legazpi City - 144.24 percent; (4) Iriga City - 104.50 percent; and (5) Masbate City - 101.14 percent.

Table 7.1. Comparative Tax Revenue Collection by Revenue District,

Bicol Region, 2006-2007  (In Million Pesos)

Source: BIR District 10

   By tax classification, income tax had the biggest share at PhP2.225 billion or 20.48 percent above its target of PhP1.956 billion; value added tax (VAT) - PhP1.273 billion; percentage tax - PhP154.514 million; other taxes - PhP143.804 million; and excise tax - PhP25.764 million (Table 7.2). Excise tax had the highest percentage change of 584.48 percent over the 2006 collection followed by value added tax with 58.40 percent. Other taxes had the least at 15.05 percent.

Table 7.2.  Comparative Revenue Collection by Type of Tax, Bicol Region,
2006-2007 (In Million Pesos)

Source: BIR Revenue District 10

   The BOC collected a total of PhP1.056 million, of which PhP36.873 million were in cash and PhP1.019 billion non-cash. Its collection performance went up by 5.39 percent over that of 2006.

 

   The exemplary tax collection performance was attributed to the following: 

• Active assistance extended to new and potential exporters of local products and materials.     

• Close monitoring of economic activities and particularly of foreign vessels in the island provinces. 

• Improved capability of staff through the conduct of refresher courses and value formation seminars.    

• Strengthened linkages with private entrepreneurs, business leaders, investors and other government agencies. 

• Implementation of project “PAYBIR” in support of the tax collection drive. Through this project, taxpayers were able to pay their taxes of PhP10, 000.00 and below through simple text messaging.  This was in partnership with Land Bank of the Philippines (LBP) as the Accredited Agent Bank and Globe Telecommunications as taxpayer agent. Globe utilized its G-Cash facility to make tax payments on behalf of its subscribers. It covered the following taxes: 1) annual income tax for purely compensation income; 2) annual income tax for self-employed, professionals, estates & trusts and second installment of income tax; 3) registration fees, fines and penalties; and 4) regular documentary stamp tax as payment for loans and initial issue of shares of stocks only.

Resource Generation of LGUs

 

   Among the provinces, Camarines Norte, Masbate and Sorsogon posted increases in their total incomes while Albay and Catanduanes slumped in 2007 (Table 7.3.). The decreased incomes of some LGUs were partly due to the decreased IRA.  This reflected the LGUs’ high reliance on the IRA and weak resource mobilization from alternative sources. Subsequently, the national government ordered the release of PhP12.57 billion as IRA differential to LGUs which represented the amount that was not given in 2001 and 2004 due to the re-enacted budget in those years. ¹[1]

 

   The IRA dependency rate of LGUs varied among provinces. Camarines Norte’s record showed it veered away from too much dependency on IRA as it decreased from 79.82 percent in 2006 to 77.50 percent in 2007.  Albay dependency rate, on the other hand, increased from 81.70 percent in 2006 to 86.09 percent in 2007. The top three highly IRA-dependent provinces were: Masbate - 97.97 percent; Catanduanes - 96.39 percent; and   Sorsogon - 87.47 percent.  Among the cities, Tabaco City increased its IRA dependency from 88.74 percent in 2006 to 89.69 percent in 2007. The figures indicate the need to improve the resource generation capabilities of LGUs. (Table 7.3.)

Table 7.3. Comparative Statement of IRA and Total Income by Province/City,

Bicol Region, 2006-2007 (In Thousand Pesos)

The increase collections were attributed to the following activities:

• Strict enforcement of the RPTA as a main program. 

• Legislative ordinances were passed to incorporate relevant provisions of the provincial tax code related to land based taxes and support tax mobilization initiatives. 

• Continued tax campaign/information drive. 

• Quarterly issuance of notices/demands in coordination with all municipalities. 

• Incentives granted to barangays with high collection efficiency rate in terms of infra projects. 

• Computerization of data and other documents. 

• Deputized municipal treasurers collected RPT and other provincial fees/impositions. 

• Conducted regular monthly meetings with Municipal Treasurers 

• Granted tax amnesty.  

• Revised real property assessment.

Expenditure Management Reforms

 

   The government had implemented some reforms to safeguard the use of financial resources among bureaus and offices.  Some of these were:

 

   Continued decentralized budget releases of DPWH, DOH, DepEd, CHED and TESDA and eight state universities and colleges (BU, DEBESMSCAT, CSSAC, CSC, CNSC, PSU, CSPC and SSC). These agencies received their allotment from the DBM Regional Office.

 

   Formulation of the Annual Investment Program (AIP) for CY 2008 of agency regional offices were undertaken which identified the priority projects of the agency. These were endorsed by the Regional Development Council (RDC) to their respective agenda central offices and to the DBM.

 

   114 government offices/bureaus/attached agencies were instructed to adopt the Organizational Performance Indicator Framework (OPIF) in preparing their 2008 budgets. The OPIF will install performance-based budgeting in the bureaucracy. This will also focus the agency's limited resources on core and vital functions of the agency and direct these resources towards the achievement of desired outcomes.

 

   All foreign assisted and funded projects were reviewed to ensure that they were free of irregularities. This was contained under Administrative Order No. 210 “Harnessing Government, Civil Society and Sectoral Groups for Transparency and Procurement Process”. ² [1] 

  

Legislative and Administrative Measures

 

   The House of Representatives presented the government's priorities in the 2008 proposed budget of PhP1.227 trillion which is considered the highest in history. As identified in the 2008 budget, DepEd ranks first. It included budgets of state universities and colleges (SUCs) and the Commission on Higher Education (CHEd) followed by DPWH, Department of National Defense (DND) including its modernization program, Department of the Interior and Local Government (DILG), Department of Agriculture (DA) including the agriculture modernization program, the Department of Transportation and Communication (DOTC), Department of Health (DOH), Department of Agrarian Reform (DAR) including Agrarian Reform Fund and the Department of Foreign Affairs (DFA).

 

   Other priorities included social services, debt servicing, economic services and subsidy to local government units.

¹ Manila Times Oct 14, 2008

² Inquirer.net 5/14/08

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