Cheap oil to slash P40B from Customs take
AS GLOBAL oil prices fall below $50 a barrel, the Bureau of Customs will likely lose P40 billion in potential collections this year, the agency’s top official said.
Customs Commissioner John Phillip P. Sevilla told reporters Friday night that cheaper oil would have a “negative” impact on the Customs’ collection of import duties and other taxes, especially as the commodity contributed more than a fifth of the agency’s annual take.
As prices slide while the import volume remains steady, “I expect this year’s collections will be lower in peso terms,” Sevilla said. The country imports and consumes an average 120 million barrels of oil a year.
This year, Customs is tasked to collect P456 billion, but oil prices at about $50 a barrel would easily slash 9 percent of the target, which had been programmed based on an assumption of the commodity being priced at $80-90 a barrel, Sevilla explained.
The BOC chief described the agency’s 2015 collection goal as “science fiction.”
Sevilla disclosed that as early as November and December last year, lower global oil prices have already impacted on Customs’ collection.
This month, collection thus far has likewise been “not good,” he said.
While the final figures were yet to be determined, estimates would show that Customs likely collected about P370 billion in duties and taxes last year, about 20-percent higher year-on-year but below the 2014 goal of P408 billion, Sevilla said.
Last year, Customs’ collection from oil products comprised 22 percent of the total, he said.
“Collection from oil will be negative, so we have to compensate through increased collection from other goods,” he said.
The Customs chief nonetheless said he remained optimistic that their 2015 collection would grow at least 10 percent year-on-year, albeit a slower rate than in 2014.
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