Weak peso to boost Customs take
The weak peso is expected to further shore up the collections of the Bureau of Customs (BOC) and raise additional revenues that the government can use to build more infrastructure, the Department of Finance’s chief economist said.
Finance Undersecretary Gil Beltran told reporters that for every P1 depreciation of the local currency, the country’s second-biggest tax-collection agency stood to gain P11 billion in additional import duties and other taxes.
Of the projected additional revenues, 18 percent or P2 billion would come from oil products, Beltran added.
Last week, the Cabinet-level Development Budget Coordination Committee projected the peso-dollar exchange rate to average 52.50-53:$1 this year and 52-55:$1 starting next year until 2022, a higher range than the previous assumption of 50-53:$1.
The peso slid to 13-year lows on the back of concerns on the widening deficit of the current account, a component of the country’s balance of payments.
As of end-June, the current account deficit ballooned to $3.1 billion—equivalent to 1.9 percent of gross domestic product, from $133 million or only 0.1 percent of GDP a year ago, mainly due to an also wider trade-in-goods deficit as imports sustained strong growth while merchandise exports dropped.
The BOC had attributed its above-target collections so far this year partly due to the peso depreciation as a weaker currency raises the value of imported products as well as the amount of taxes slapped on them.
As of end-September, the BOC’s collections totaled P435.9 billion, up 35 percent year-on-year and also 1.5-percent higher than the nine-month goal of P429.6 billion. —BEN O. DE VERA