BOC’s 2022 collection goal raised to P733B as oil prices continue spike
Bureau of Customs (BOC) | FILE PHOTO
MANILA, Philippines—President Ferdinand Marcos Jr.’s economic team has tasked the Bureau of Customs (BOC) with collecting a bigger P733 billion in import duties and other taxes this year, to reap a tax windfall from expensive oil.
Customs Commissioner Rey Leonardo Guerrero told a press briefing on Tuesday (July 12) that despite the further jump in the collection target set by the Cabinet-level Development Budget Coordination Committee (DBCC) just last Friday, the BOC expects to again achieve its 2022 goal.
Despite the prolonged COVID-19 pandemic, the BOC exceeded its P616.7-billion target for 2021, collecting P643.6 billion last year. In 2020, the P537-billion import duties and taxes it collected surpassed its P616.7-billion goal.
With oil import values on the rise amid expensive global prices, the DBCC already raised the BOC’s 2022 collection target twice, Guerrero disclosed.
From the original P679-billion program for 2022, the DBCC last May, then composed of former president Rodrigo Duterte’s economic team, hiked the BOC goal to P721 billion, Guerrero told the Inquirer.
It was only last week when this year’s collection target was again increased by the DBCC to the current figure, Guerrero said, this time with President Ferdinand Marcos Jr’s economic team at the helm.
From January to June, the BOC collected P396.8 billion in import duties and other levy, above the P327.8-billion six-month goal. In June alone, the BOC generated a historic-high monthly take amounting to P76.3 billion. It helped that both import volumes amid a recovering reopened economy, as well as values due to elevated global prices, were on the rise, the BOC chief said.
Guerrero said that out of the year-to-date BOC surplus collections of about P76 billion, nearly half—or P30-billion—were windfall from costly oil. The BOC chief nonetheless acknowledged to the Inquirer that these incremental tax collections would fund targeted subsidies to sectors worst hit by expensive fuel.
Before it stepped down in June, the Duterte administration set aside a total of P47.5 billion in financial aid to those worst hit by skyrocketing oil prices: P41.4 billion in unconditional cash transfers to the poorest half of the population, amounting to P500 monthly for six months; P5 billion in fuel subsidies for public utility vehicles (PUVs) and P1.1 billion in fuel discounts to agricultural producers.
Budget Secretary Amenah Pangandaman last week said that to date, the Department of Budget and Management (DBM) already released P6.2-billion worth of targeted cash transfers covering the first tranche; P3 billion in fuel subsidies; P500 million to cover fuel discounts; as well as P7 billion for the service contracting program—a cumulative P16.7 billion.
Amid expectations of global oil prices remaining elevated in the near term, Finance Secretary Benjamin Diokno had described moves to extend the ongoing cash aid, fuel subsidies, and discounts as “populist.” But President Marcos’ chief economic manager had conceded that these targeted subsidies would be given to the bottom 50-percent income households, PUV drivers and operators, as well as farmers and fisherfolk throughout this year as long as prices were high.
Last March, Department of Finance (DOF) estimates showed that at an estimated average global oil price of $110 per barrel this year, the BOC could collect an excess of P26 billion in 12-percent value-added tax (VAT).
The DBCC last Friday (July 8) pegged the price of Dubai crude oil to hover at $90-110 a barrel in 2022, before prices “normalize,” per Diokno, to $80-100 per barrel in 2023, and then down to $70-90 a barrel from 2024 to 2028.
But with the economy expected to fully recover by the middle of this year, Diokno had said targeted subsidies would no longer be given next year.
Guerrero said that as BOC chief, he had been asked to “wait for orders” while awaiting his successor to be appointed by Marcos. Sources claimed Guerrero was not on the list of prospective BOC commissioners to be picked by the President.
Guerrero had been implicated in a recent Senate report for allegedly protecting agricultural smugglers. The BOC chief had repeatedly denied these allegations and expressed willingness to testify in a Senate investigation of the issue.
