Philippines says may cut 2010 revenue targets

The Philippines is looking at reducing revenue targets of its main collection agencies this year as the country's economic recovery is expected to be slow, a senior finance official said on Wednesday.

Finance undersecretary Gil Beltran said economic managers were considering lowering the Bureau of Internal Revenue's revenue goal by about 5 percent to 830 billion pesos ($18 billion) against an 875.1 billion peso target set under the proposed 2010 budget.

The Bureau of Customs's target may be pegged at 275 billion pesos, down from 309.5 billion pesos programmed earlier, he said.

"The numbers are still preliminary. We will announce the final figures once we have approved them," Beltran said, adding the government is taking into account the weak 2009 performance in setting this year's targets.

The Bureau of Internal Revenue, which accounts for about two-thirds of total government tax collections, said it missed its 2009 target by 7 percent as a slowing economy eroded revenues.

The agency said on Wednesday its tax take last year reached 743.4 billion pesos, versus its goal of 798.5 billion pesos.

The Customs bureau also looks set to miss its 2009 target of 273.3 billion pesos, with January-November collections only reaching 201.4 billion pesos.

The government expects to incur a wider-than-expected budget deficit of 293 billion pesos, or 3.5 percent of GDP, this year, as the country funds reconstruction projects after last year's typhoons and as the revenue take remains weak.

Manila was originally looking at limiting this year's fiscal shortfall to 233.4 billion pesos, or 2.8 percent of GDP, from a projected deficit of at least 290 billion pesos in 2009.

To bridge this year's budget gap, the Philippines is looking to raise $3.8 billion overseas, $2 billion of which would come from bond issues.