BOC complains over 2016 revenue target

MANILA, Philippines - Amid low oil prices, the Bureau of Customs sees next year’s nearly half a trillion-peso revenue collection target as “too high” and would ask the government to revise it downwards, the agency’s chief said.

Customs commissioner Alberto Lina told reporters they would ask government economic managers to lower BOC’s P498.7-billion collection goal next year. The target is up 14.22 percent from this year’s goal.

“It’s too high. I don’t know how much can we collect by end-December but normally, targets are set 20 to 25 percent of the actual collection from the previous year,” Lina said when asked how much reduction he would request.

As of the third quarter, Customs, which accounts for a fifth of state revenues, has raised P268 billion, up 0.9 percent from the previous year. The year-to-date tally however fell short of the P314-billion target for the first nine months.

Lina said low oil prices is to blame for his agency’s underperformance, pointing out prices have tumbled by half from the start of the year.

“That started at around $90 per barrel and then it fell to $70. Now, it’s at $45 so that is where the losses are coming from,” he explained.

“Oil accounts for 30 percent of our total collections,” he said.

As per his rough estimate, Customs has lost around P50 billion in revenues this year due to plummeting global oil prices. Low prices pull down the valuation of imported goods on which Customs dues are based.

The country imports bulk of its oil requirements. As of Sept. 30, average Dubai crude, the benchmark for the Philippines, has fallen to $46.14 per barrel from $96.99 a year ago.

Lina said Customs losses from oil are not being offset by a weaker peso, which has declined more than four percent against the dollar since the end of 2015.

A weaker currency makes imports more expensive and thus increases Customs valuations and collections. According to Department of Finance data, Customs gains around P8 billion for every one-peso depreciation.

“The peso has already stabilized. And if you will look at other Asian currencies, the Philippine peso is the best performer when you compared to the Thai baht, Indonesian rupiah and more so to Malaysian ringgit,” the Customs chief explained.

“So it’s definitely not enough,” he added.