Government receives P16.7-billion windfall in September

MANILA, Philippines - The government expects a significant improvement in its September fiscal position after it received P16.7 billion in unexpected non-tax revenues during the latter part of last month.

However, Finance Secretary Margarito Teves said it was too early to say whether the additional revenues would be enough to put the September fiscal position at a surplus and reverse the P22-billion budget deficit recorded in August.

The P16.7 billion in non-tax revenues comprise of P14.4 billion which the government earned from the Department of Energy’s sale of bunk gas to the Philippine National Oil Co. (PNOC) last month following successful negotiations between the two parties.

Teves said PNOC, the key institution in charge of exploration development and utilization of indigenous energy sources, would be using the bunk gas for its various projects nationwide.

The remaining P2.3 billion consists of higher-than-expected dividends for September from PNOC (P1 billion), the Land Bank of the Philippines (P1 billion) and the Development Bank of the Philippines (P393 million) as the DOF urged state-owned firms to remit more dividends to the Treasury.

“These revenues are going to be helpful because they’re unexpected,” Teves said.

Under Republic Act 7656 or the Dividends Law of 1994, government owned and controlled corporations (GOCCs) and government financial institutions (GFIs) are required to remit half or 50 percent of the income earned in each fiscal year to the National Government. The remittance should be in the form of cash or in real estate properties with clean titles.

Teves conceded that tax revenues have been problematic.

“We know we’ve fallen short on tax revenues. We’ll try to cover this with non-tax revenues,” Teves said.

The Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) have been having difficulties meeting their respective collection targets, saying that the global financial turmoil has drastically affected the domestic economy.

The BIR collected only P500.8 billion from January to August or 5.9 percent below the P532.1 billion it raised in the same period last year.

The BOC collected P147.1 billion during the eight-month period, 12.1 percent below the P167.5 billion it generated in the same period last year.

Despite the problematic tax collections, Teves said the government would still try to achieve the revised budget deficit target of P250 billion for 2009.

Teves hopes that proceeds from privatization including the expected P13 billion from the sale of the Food Terminals Inc. (FTI) property in Taguig would help the government meet the revised deficit target.

The government is scheduled to bid out FTI on Oct. 8, with a floor price of P13 billion.