Government has campaigned that a crackdown on corruption would plug leakages and increase revenue generation. However the revenue program for 2011 does not show signs that government expects to raise revenues from this, said research group IBON.
Tax revenues are projected to increase by just 10.4% from Php1.15 trillion in 2010 to Php1.27 trillion in 2011. However, this barely keeps pace with low estimates of nominal growth in gross domestic product of 9.8% between 2010 and 2011. Indeed, growth in tax revenues between 2009 and 2010 is even estimated at a higher 17.5%, or from Php981.6 million (2009) to Php1.15 trillion (2010). On this key measure, it does not appear that the government expects its supposed anti-corruption drive to result in significantly increased revenues.
Non-tax revenues in turn are even expected to fall by 2.9% between 2010 (Php141.2 billion) and 2011 (Php137.2 billion). Consequently, total revenues are estimated to rise by just 8.9% between 2010 (Php1.29 trillion) and 2011 (Php1.41 trillion), which is markedly less than the estimated 15.2% growth from 2009 (Php1.12 trillion) and 2010.
The poor revenue generation will cause national government (NG) debt to rise to an estimated Php5.19 trillion by the end of 2011, or equivalent to some Php54,136 per Filipino. NG debt is currently estimated to be Php4.79 trillion by the end of 2010 or some Php50,938 per Filipino.
The estimate of NG debt by the end of next year is also very likely to be an underestimation if past government targeting is any guide. The original target for NG debt as of the end of 2010 was just Php4 trillion but the latest estimate at Php4.79 trillion is almost 20% higher. Similarly, the original target for NG debt at the end of 2009 was only Php3.96 trillion yet the final figure was over 10% higher at Php4.36 trillion.
Government deficit-targeting has likewise been very much off-target. The original NG deficit target for 2009 was Php40 billion but the eventual figure was over seven times higher at Php298.5 billion. In turn, the original NG deficit target for 2010 was Php233.5 billion – but the deficit is already at Php229.4 billion by July and with five more months to go before the yearend.
Revenue-generation is vital to address the country’s fiscal troubles and the most reasonable way of raising funds is through a more progressive tax system that places a greater tax burden on high-profit corporations and high-wealth individuals, does not surrender tariff revenues out of dogmatic trade liberalization, and that genuinely cracks down on corruption.
According to IBON, the unremarkable projected increase in tax revenues seems to reflect that the Aquino administration could be at a loss on how to address the problem of corruption and low tax collection. (end)