MANILA, Philippines?Sixto Esquivias IV has resigned as commissioner of the Bureau of Internal Revenue (BIR) because, according to him, ?it was the honorable thing to do.?

?The BIR has a large tax collection shortfall right now, and I feel ashamed to stay,? Esquivias said in Filipino in a telephone interview with the Philippine Daily Inquirer Monday night.

Esquivias, who was appointed to the top BIR post on Nov. 1, 2008, said he found it prudent to resign to give way to anyone who may be better at making the agency meet its tax collection targets.

?If someone can do the job better, then why would I stay?? he said.

He said he exerted his ?best, but apparently it was not enough. Resigning was the honorable thing to do.?

Esquivias, the fifth tax chief to be appointed by President Gloria Macapagal-Arroyo since she took office in 2001, was appointed last year to replace Lilian Hefti amid a similar problem of tax collection shortfall.

Resignation accepted

Esquivias tendered his resignation on Friday effective the same day.

?The President has accepted his resignation,? Executive Secretary Eduardo Ermita said in a statement.

?He has not performed well and he said he takes responsibility for it. He said the President should be given the chance to make changes as she sees best,? Ermita added.

Press Secretary Cerge Remonde told reporters that Ms Arroyo would announce on Tuesday the new head of the bureau that brings in three-fourths of government revenues.

Stressful

Esquivias found the job of a BIR commissioner exhausting, saying that last week his blood pressure rose to a level higher than normal because of stress.

Latest data from the Department of Finance (DoF), mother agency of the BIR, showed that the revenue agency?s tax collection reached P557 billion in January to September.

This fell short of the official target of P596.2 billion for the nine-month period and much lower than the P587.9 billion collected in the same period last year.

Bigger budget deficit

Because the BIR accounts for 75 percent of the revenues generated by the national government, its shortfall will widen the budget deficit.

For this year, the DoF expects the budget deficit to widen to P300 billion largely because of the weaker-than-expected tax collection.

Last year?s deficit stood at P68 billion. As of end-September, the deficit was already P237.5 billion.

Tax collecting in the Philippines has been dogged for years by widespread tax evasion, corruption and inefficient tax administration. The difficulty of the task was made worse this year by the global economic downturn, which adversely affected corporate and household incomes.

Officials had acknowledged that the full-year target would be difficult to reach because of the downturn.

Miriam?s husband

Esquivias denied rumors that he had misgivings about Ms Arroyo?s decision in asking Secretary Narciso Santiago Jr. to help the BIR?s Large Taxpayers Service (LTS) in shoring up its tax collection.

The LTS is in charge of collecting taxes from the country?s biggest corporate taxpayers.

?That report is untrue,? Esquivias said.

Santiago is the presidential adviser on revenue enhancement and husband of Sen. Miriam Defensor-Santiago.

?I was just an appointee myself. I am not somebody who can question the wisdom of the President,? Esquivias said.

Return to law practice

Asked what he intended to do next following his resignation, Esquivias said he would simply return to practicing law.

Before his appointment to the BIR, Esquivias, a tax lawyer, worked as a managing partner at the Esquivias, Condo and Yabut law firm. He also used to teach taxation at the University of the Philippines.

Until a replacement is officially named, Joel Tan Torres will automatically serve as officer in charge of the BIR.

Torres was appointed in August as ?senior deputy commissioner of the BIR.? His post was created by the President under Executive Order No. 827.

Under EO 827, the senior deputy commissioner shall automatically act as head of the BIR in case the commissioner resigns.

The creation of the new post at the BIR for Torres gave rise to talk that he was being groomed to be the next BIR commissioner.

Torres confirmed that he would indeed serve as officer in charge of the BIR following Esquivias? resignation.

He did not tell, however, whether he would indeed be officially appointed the new BIR commissioner.

Business as usual

?I am not aware of that yet,? Torres said.

Nonetheless, Torres said the BIR would continue to implement programs under Esquivias to maximize tax collection.

?The BIR already implemented several programs, and we will simply continue them. It will be business as usual in the agency,? said Torres, a former SGV partner.

Deputy Commissioner Nelson Aspe assured the public that the revenue agency would work on increasing tax collection.

?Nothing will change in our commitment to improving tax collection. Work will not be disrupted,? he said.

Aspe said the entire BIR was surprised with the decision of Esquivias to resign.

?We were surprised by his resignation because last Thursday, he was still at the management committee meeting and presided over it,? Aspe said. With a report from Reuters