MANILA, Philippines - The Department of Finance (DOF) is appealing to Congress to junk pending revenue measures that are estimated to leave a huge dent on government coffers.
Finance Secretary Margarito Teves said that there are at least three pending revenue measures in Congress that are estimated to erode government revenues by P51 billion a year.
Teves, for one, said that the measure seeking the creation of five ecozones would translate to revenue losses of P15 billion.
Another measure, which seeks to reduce the National Government’s share from the Malampaya deep-water-to-gas project, will translate to revenue losses of P14.9 billion.
In 2008, the consortium behind the Malampaya natural gas project remitted to the Bureau of the Treasury (BTr) roughly P13 billion in royalty payments to the government.
The Malampaya consortium, which operates the 2,700 MW deep-water-to-gas project, consists of Shell Philippines Exploration B.V. (Spex) and Chevron Texaco, each holding a 45 percent stake in the project. The Philippine National Oil Company-Exploration Corp., the government’s exploration arm, holds a 10 percent stake.
Furthermore, Teves said the reimposition of franchise tax on power distribution utilities in lieu of the value-added tax (VAT) would result in revenue losses of P7.1 billion.
These measures, coupled with the weakening in the macroeconomic indicators such as the gross domestic product (GDP) and inflation would affect revenues, Teves said.
“The further weakening in macroeconomic indicators such as the GDP and inflation, plus these negative measures will have a significant impact on our fiscal performance and macroeconomic stability,” he said.
Teves also said that while a higher level of deficit spending is tolerable at this time, international credit rating agencies and multilateral institutions have already cautioned against slipping revenues.
“This could put our credit standing at risk,” Teves said.
The government’s budget deficit ceiling for 2009 has been revised to P250 billion from P199.2 billion previously.
The economic growth projection, meanwhile, has also been revised to a range of 0.8 percent and1.8 percent from the original target range of between 3.1 percent and 4.1 percent.
The Development Budget Coordination Committee (DBCC), the interagency group that sets the country’s macroeconomic assumptions, made the revisions on the back of the prolonged impact of the global financial turmoil.