The Philippine Economy

[bustero]

haha that's is the beauty of trade distorting tariff regulations and protectionism

[JAMAICUS]

BY MARICEL E. ESTAVILLO, Reporter
Semiconductor, electronics export target on track
The country’s biggest exports sector, semiconductor and electronics, remains on track in reaching the 10% growth in exports receipts this year, despite the slight drop in the February imports value.

Total February imports for the industry -- which accounts for some 70% of the country’s annual exports -- dropped to $1.612 billion, a 1.1% decrease from the $1.629 billion during the same month last year.

Still, industry group Semiconductor and Electronics Industries in the Philippines, Inc., (SEIPI) said recovery is forthcoming.

The industry wants to make up for its sector’s sluggish performance last year -- a mere 0.91% growth from the $27 billion total exports earnings in 2004.

"We are keeping the target. For the period of January to February, semiconductor exports grew by 8.77% while electronics exports grew by 3.75%," SEIPI executive director Ernesto B. Santiago told BusinessWorld in a telephone interview.

Semiconductor or chip production accounts for 74% of the industry while the non-chip exports component or the electronics manufacturing service (EMS) accounts for the remaining 26%.

Total exports for the first two months reached $4.3 billion, an improvement from the $4.13 billion during the same period last year.

In a recent interview, Arthur J. Young Jr., SEIPI president and chairman of power semiconductor maker PSi Technologies, Inc., said exports and imports figures for the first quarter do not totally mirror the industry’s performance for the year.

In trending, Mr. Young said the industry and most companies use end-of-the-quarter figures.

At the general membership meeting (GMM) of SEIPI held over the weekend in Baguio City, Mr. Santiago recounted that most of the big industry players said they are bullish on this year’s prospects.

"2006 semiconductor growth will be driven by strong demands for analog devices mostly for portable consumer electronics, handsets, network and personal computer applications," Mr. Santiago said.

In another interview, Kazuya Takeda, general manager of disc drive manufacturer Hitachi Global Storage Technologies (GST) Phils. Corp., said indeed the consumer electronics business this year is growing.

Without disclosing much detail, Mr. Takeda said Hitachi GST will increase this year the production for the one-inch micro drive, 1.8-inch Travelstar micro drive, and the 2.5-inch hard drive. All these are used for consumer electronics items.

The plant’s present production volume accounts for 15% of Hitachi’s global annual production of 46.6 million drive.

Mr. Santiago said the local semiconductor industry will grow at par with the global market.

"Worldwide semiconductor market will continue to show gradual improvement in 2006. A higher, double-digit revenue growth is projected versus 2005, which grew by 6.9% over 2004," he said.

Global first quarter results showed a strong semiconductor revenue performance with notable growth coming from the analog device sector and mobile phones and wired comunications end applications.

"The semiconductor supply chain inventory remains below target levels in the first quarter, spurring robust replenishment orders," Mr. Santiago said. Still, the overall local electronics industry will continue to lag the world market in growth, primarily a result of Toshiba Corp.’s pullout of its laptop production. The pullout took away an estimated annual exports revenue of $1 billion.

http://www.itmatters.com.ph/news.php?id=042606a

[JAMAICUS]

Shares close higher on hopes fuel tax will stay
Posted: 1:25 PM | Apr. 26, 2006

Cecille Yap
XFN-Asia

(UPDATE) SHARE prices closed higher after two days of losses as investors picked up bargains after the government clarified that suspending the value-added tax (VAT) on petroleum products would be the last option the state will take to cope with high oil prices, dealers said.

The composite index closed up 14.59 points or 0.65 percent at 2,247.14, just off the day's high of 2,247.44. It hit a low of 2,232.55.

The broader all-shares index advanced 10.24 points to 1,388.18.

Gainers outnumbered losers 61 to 31, and 55 stocks were flat.

Volume was 2.17 billion shares worth 2.39 billion pesos.

Finance Secretary Margarito Teves said the government is studying measures to ease the impact of rising oil prices on consumers, while keeping its fiscal consolidation program on track.

Press Secretary Ignaco Bunye said the proposed tax exemption on oil will be considered, but will be the last priority.

The government estimates it will raise 30-35 billion pesos from the VAT on petroleum products this year, or 40 percent of the total projected revenues from the new VAT law that took effect in November last year.

"Though we recognize that this move would be one way to reduce the pressure on consumer spending, we believe it fails to take into consideration the long-term benefits to the economy," said Nadine Javellana, an analyst at Macquarie Research Equities.

DA Market Securities Inc president Nestor Aguila said, "the clarification from the presidential palace and the finance department provided investors some relief."

Most actively traded Philippine Long Distance Telephone Co finished up 10 pesos or 0.50 percent at 1,995 on 386,400 shares.

Conglomerate Ayala Corp was down 2.50 pesos at 347.50, while unit Bank of the Philippine Islands retreated 0.50 to 61. Ayala Land Inc gained 0.50 to close at 12.25.

SM Investments Corp was up 1.00 peso at 229, while unit SM Prime Holdings Inc gained 0.30 to 8.00, ahead of the release of their quarterly results anytime now.

Manila Electric Co's (Meralco) A-shares which are limited to Filipino investors, fell 0.25 peso to 12.75 and the B-shares, which foreigners can buy, was down 0.50 at 18.75.

Dealers said Meralco shares retreated on worries that the Supreme Court may further delay its verdict on the company's rate restructuring case, which would mean additional provisions by the electricity distributor to cover potential losses.

Meralco on Tuesday reported first-quarter net loss of 748 million pesos, much smaller than the year-earlier's 2.2 billion.

San Miguel A closed flat at 60.50 pesos, while San Miguel B was up 0.50 at 81


http://money.inq7.net/breakingnews/v...4&dd=26&file=9

[philwily]

I don't really understand the stock market...
but from what I hear and read, it's good times for the peso right?

well, hope it stays that way (or improves).

[chixbebe]

By Lawrence Agcaoili
http://www.manilastandardtoday.com/?...1_april26_2006

Finance Secretary Margarito Teves yesterday assured investors that the government was sticking to its fiscal program aimed at trimming the budget deficit to P125 billion this year.

Teves, fresh from a nondeal road show in London and Washington, told reporters that the government was looking at several options to cushion the impact of surging oil prices in the world market.

“We need to raise more revenues to finance infrastructure and social services in order to try to achieve our level of economic growth and at the same time (address) fiscal concern,” he said.

The Department of Finance chief said removal of the value added tax on petroleum products would erode the government’s revenue base and result in higher borrowings to plug the yawning budget deficit.

Teves said the government would borrow if it failed to raise enough revenues to fund much-needed infrastructure and social services projects.

National Treasurer Omar Cruz told reporters in a separate interview that the government had not departed from its fiscal program that aims to narrow the budget deficit to P125 billion or 2.1 percent of gross domestic product this year from P146.5 billion or 2.7 percent of GDP last year.

“There is no departure from the fiscal program. No decision or no policy decision has been made,” Cruz said.

He said pronouncement on the possible lifting of the VAT on petroleum products had spooked the market, resulting in lower yield for bonds issued by the Philippine government and a weaker peso versus the US dollar.

The peso yesterday bucked wider trend in Asia, undermined by concerns over the country’s fiscal position. It sank to a two-month low of 51.90 per dollar at the close of trading from 51.735 on Monday.

Budget Secretary Rolando Andaya Jr., meanwhile, warned that the removal of the VAT on petroleum products would result to cuts in government spending on education and health.

“There will be some tradeoffs. That is inevitable. If we give up the tax on oil, then we must be ready to give up many social and infrastructure projects,” he said.

The Expanded Value Added Tax Act of 2005 that was implemented last Nov. 1 removed the exemptions of several industries, including petroleum products and power. The law also raised the VAT rate to 12 percent from 10 percent on Feb. 1.

The government expects to raise as much as P47.8 billion from the imposition of VAT on crude oil and petroleum products this year.

Of the entire P75 billion proceeds from the implementation of the new VAT law, Andaya said 30 percent or P22.7 billion would be used to finance infrastructure and social services while 70 percent or P52.5 billion would be used to trim the budget deficit.

He said projects that could be cancelled include the P1.6 billion mass feeding program, the P500 million fund for teachers’ training, P150 million computers for high schools, P120 million library hubs as well as airport development activities.

[kiretoce]

Rising remittances seen supporting economic growth
By Rosemarie Francisco

Rising remittances from workers overseas will support consumption and growth of the Philippine economy this year, but weak net exports and investment spending will limit expansion, a Reuters quarterly poll shows.

A recovery in the agriculture sector after drought last year will also help lift the economy but risks remain from crude oil prices, which hit fresh record highs this month, economists said.

The Philippines imports almost all of its crude oil needs.

The median forecast in the quarterly poll was for the economy to grow 4.9 percent this year, slightly slower than 5.1 percent in 2005. For 2007, the median estimate was for 5 percent growth.

The 2006 growth forecast was slightly higher than 4.7 percent forecast in a similar Reuters poll in January, but was well below a government target of 5.5 percent to 6.2 percent.

"Net exports are unlikely to add much to growth this year with rising oil prices and competition from China seen putting upward pressure on the trade deficit," said George Worthington, chief economist for Asia-Pacific at IFR Thomson Financial.

The government expects exports growth to accelerate to 8 percent this year from just 4 percent in 2005. Analysts said a slowdown in global demand in the second half of the year may weigh on the country’s electronics shipments.

The poll showed that analysts have downgraded their expectations for the Philippines trade deficit this year to a median forecast of .3 billion from .1 billion in the January survey. The 2005 shortfall was .16 billion.

"The key for Philippine GDP growth to break out of the 4.5 to 5.5 percent range is a revival of investment," UBS said in a research note last week.

A government plan to raise infrastructure spending by 50 percent this year, off the back of an improved fiscal position, would help fuel economic activity but private-sector spending continued to be limited by persistent political uncertainty, UBS said.

Although President Gloria Macapagal Arroyo survived the desertion of allies and an impeachment attempt last year, analysts expect allegations of election fraud and graft to continue to hound her.

Remittances from Filipinos working overseas are expected to rise 10 percent to .8 billion this year, which would help the peso sustain gains against the dollar, economists said.

[JAMAICUS]

Mining investments hit $525M in Q1
By Rocel C. Felix
The Philippine Star 04/27/2006

Despite spirited anti-mining campaigns, committed investment inflows into the local mining industry reached $525 million in the first quarter alone and is bound to increase further in the coming months, said Chamber of Mines of the Philippines (CMP) president Benjamin Philip Romualdez.

"While there will always be opposition to mining, the general sentiment of investors is very positive. There is a movement forward, with some of the projects on stream, while others are merely delayed," said Romualdez.

He said that foreign investors remain confident that government will stick to its policy of revitalizing the mining sector despite congressional moves to review the mining law.

"As the dust begins to settle, people realize that most of the anti-mining efforts are rhetorical," stressed Romualdez.

From January to March this year, mining companies that announced new or additional investments included Sumitomo Metal Mining Co., Ltd. (SMMC), one of the world’s biggest nickel producers and refiners, which has a 54-percent stake in the Coral Bay Nickel Corp.’s nickel and refinery processing project in Rio Tuba, Palawan.

Sumitomo which spent $120 million last year to double its nickel processing plant’s output to 20,000 metric tons (MT) in the next two to three years, is spending an additional $280 million this year to further expand its existing facilities such as its high-pressure acid leaching (HPAL) plant that processes low-grade oxides to produce nickel/cobalt mixed sulfide (MS), an intermediary product of nickel refining. HPAL is a revolutionary process, recently developed, enabling recovery of nickel from low-grade oxide ores at low cost.

Atlas Consolidated Mining Corp. has completed its $120-million financial requirements and will raise an additional $50 million this year to restart the development of its copper mines in Toledo, Cebu.

Canadian mining firm TVI Pacific Inc. which is listed in the Toronto Stock Exchange has earmarked $15 million this year to expand its mining activities in the Canatuan orebody in Zamboanga del Norte in Mindanao.

TVI filed applications for new exploration grounds in the Zamboanga Peninsula and also plans to pursue exploration of other properties in its inventory. Last year, TVI invested $7 million or about P385 million for the Canatuan development program which involves the immediate re-activation of the company’s existing precious metals processing plant located in Zamboanga del Norte.

The project which started in 2003, includes the development of both a gold and silver-rich oxide zone, and an underlying gold, silver, copper, and zinc - rich, volcanic-hosted massive sulphide (VMS) zone.

The re-activation of the existing processing plant represents the first step in a multi-phase plan to develop the Canatuan deposit mineral resources and to realize the full production potential of the extensive metal-bearing VMS belt surrounding the Canatuan deposit.

Indophil Resources which is now undertaking exploration work at the Tampakan Mines in South Cotabato with local mining firm Sagittarius Mines, expects one of its partners, Australia-based Xstrata Mining Co. to exercise its option to invest $52 million into the Tampakan mining property and acquire a 60-percent stake in the company by July.

Apex Mining Corp. and foreign partner Crew Gold are jointly spending $8 million this year to revive idle mines.

Earlier, the Mines and Geosciences Bureau said there are strong interests by both foreign and local investors to pursue in the next five years 24 medium and large-scale mining projects requiring new investments of $8 billion.

The primary minerals production will come from gold, copper and nickel mining projects.A mining update by the MGB show that nine mining firms are still pursuing groundwork activities in preparation for subsequent full-scale mining operation.

As this developed, the CMP is collaborating with various stakeholders to come up with a guidebook that would among others, establish protocols and define responsibilities and obligations of mining companies to their host communities.

"We have very good mining standards but we will come up with our own standards that will incorporate the nuances or peculiarities of the local mining industry. With this, we hope to remove the suspicion that big mining companies are colluding with the government to advance only their economic interests with total disregard for their legitimate concerns," said Romualdez.

http://www.philstar.com/philstar/news200604270701.htm

[JAMAICUS]

Shares close higher; main index at near 7-year high
Posted: 12:46 PM | Apr. 27, 2006

Erik de la Cruz

SHARE prices closed higher led by market heavyweight Philippine Long Distance Telephone Co. (PLDT), pushing the key index to its highest closing level in nearly seven years, dealers said.

They said investors were positioning themselves in anticipation of a healthy set of first-quarter results, while the continued decline in oil prices from a record high of above 75 dollars a barrel hit last Friday also buoyed up the market.

The government's firm stand in keeping the value-added tax on petroleum products despite high oil prices also aided sentiment, dealers said.

The 30-company composite index closed up 34.25 points or 1.52 percent at 2,281.39, near its intra-day high of 2,284.08. It hit a low of 2,258.51.

It was the index's best finish since August 6, 1999, when it closed at 2,298.18.

Volume was 2.1 billion shares worth 2.9 billion pesos.

The all-shares index rose 20.95 points to 1,409.13.

Gainers beat losers 54 to 44, with 52 stocks unchanged.

http://money.inq7.net/breakingnews/v...&dd=27&file=14

[JAMAICUS]

Govt allots P1.5 trillion for infrastructure projects


The government plans to spend P1.5 trillion ($28 billion) on major infrastructure projects over the next five years, seen as a hindrance to investments, the government said Thursday.

It plans to finance 56 percent of the costs and rely on the private sector for the balance of funds required for the projects.

About P743 billion worth of transportation projects lead the list, the economic planning department said in a statement.

The rest would be spent on the power sector, water utilities, communications and social infrastructure.

Infrastructure spending would account for about four percent of the country's total gross domestic product for 2006 to 2010, the statement added.

"Infrastructure plays a crucial role in boosting economic growth and reducing poverty. Substantial investment is needed to create new infrastructure and maintain or improve existing ones," Economic Planning Secretary Romulo Neri said.
http://www.abs-cbnnews.com/storypage.aspx?StoryID=36947

[marites4]

I hope they upgrade edsa^

[OtAkAw]

I hope they focus on T3 first with that money.

[chixbebe]

http://www.manilastandardtoday.com/?...7_april28_2006

The Philippines’ economic team has assured the Filipino-American media in New York of the country’s good economic performance and intensified anticorruption measures.

Led by Finance Secretary Margarito Teves, the team briefed reporters and editors of the New Jersey-based Filipino Express, the New York-based Filipino Reporter, and the California-based Philippine News on President Gloria Macapagal Arroyo’s fiscal, monetary, and trade programs.

Consul General Cecilia Rebong, quoting Teves, said “the Philippine government has been implementing critical fiscal and monetary reforms” and that “some of those reforms have resulted in greater macroeconomic and fiscal stability for the country.”

Rebong said the Fil-Am media had expressed concern on the political situation in Manila and its possible repercussions to the economy.
Teves replied that “we cannot divert our attention because of political issues; we chose instead to focus on economic reforms which have yielded tangible results.”

He went on to say that in January to February alone, internal revenue collections totaled P136.9 billion, higher than the P127.8 billion target. Ferdinand Fabella

[dancethingy]

Gov’t courts Goldman Sachs
By Marianne V. Go
The Philippine Star 04/28/2006

Investment bank, securities and investment management firm Goldman Sachs is being courted by the Philippines to invest some of its managed funds in the country.

According to Trade and Industry Secretary Peter B. Favila, Goldman Sachs Asia chairman Tom Morgan recently visited the country and paid a courtesy call on President Arroyo.

Morrison, along with other top Goldman Sachs officials, also met with Favila to explore possible investment opportunities.

Goldman Sachs, Favila said, expressed interest in a range of areas including tourism.

One particular area the firm was eyeing was Busuanga in Palawan province where an Amanpulo-type of resort could be built.

Favila offered the Subic Bay Freeport and Clark as possible investment areas especially since Subic is keen on developing more high-end tourism facilities while the Government is set to privatize the Mimosa Golf Resort in Clark.

The Mimosa Golf Resort, Favila said, has been doing good lately due to the influx of Korean tourists.

Apart from tourism, Goldman Sachs, Favila said, expressed interest in the Transco privatization.

Goldman Sachs, Favila said, already has existing investments in the Philippines in bonds, equity funds and a few others.

The Goldman Sachs top executive was able to spend only a brief one-day visit, but Favila has invited the officials to return for a longer exploratory visit.

[dancethingy]

MIND YOU THAT OUR SENATE HAS YET TO PASS THE DAMN BUDGET FOR 2006, SUPPOSEDLY THEY ARE STILL IN RECESS!!!!! Bong Revilla for example is in Boracay with one of his hoes. THIS SENATE IS RIDICULOUS!!!


Today’s Headlines
P1.136-billion national budget eyed for next year

The government has set next year’s budget ceiling at P1.136 billion, 8% higher than this year’s P1.05-trillion proposed budget.

The bigger budget will allow higher spending on infrastructure projects next year, Budget Secretary Rolando G. Andaya, Jr. said in a statement.

The 2007 budget also assumes a deficit of P63 billion - with revenues projected at P1.113 trillion and disbursements at P1.176 trillion - which will be consistent with the government’s goal of balancing the budget by 2008.

This year’s budget deficit ceiling has been set at P125 billion or 2.1% of the gross domestic product (GDP). The P63 billion deficit will improve the proportion to 0.9% of GDP.

The Budget department is set to issue a "budget call" next month, which signals the start of budget preparations by the different government agencies. Congress, meanwhile, has yet to approve the 2006 budget.

Mr. Andaya said the Budget department will use a "planning ceiling" of P340.8 billion for personnel services, P591.6 billion for maintenance and other operating expenses, and P204.3 billion for capital outlays.

The budget for capital outlays will be higher by P58.4 billion than the P145.9 billion allocated in the 2006 budget.

Debt servicing will eat up P316.8 billion or 4.7% of GDP, whereas the 2006 budget has set aside P340 billion or 5.7% of GDP on interest payments.

"This will be largely due to the improvement in the fiscal position of the government," Mr. Andaya said.

He added that the Budget department has established a three-year budget strategy that sets aside funds for new or expansion programs after the funding requirements of existing priority programs are considered.

[dabert]

"The government has set next year’s budget ceiling at P1.136 billion, 8% higher than this year’s P1.05-trillion proposed budget."

Is it really 1.136 billion? coz it stated that its 8% higher than this year's P1.05-trillion proposed budget.. so if we were to put them in a mathematical relation.. it would be 1.136 billion > 1.05 trillion...
please correct me if i'm wrong whether there really is an error on the article or im just missing out some economics-related terms which would verify the relation...

[JAMAICUS]

It's likely a typo error.

[JAMAICUS]

Govt eyes zero deficit, sets 2007 budget ceiling


While the 2006 national budget awaits action in the Senate, Budget Secretary Rolando Andaya Jr. has gone ahead to announce that his department has pegged the government’s "indicative budget ceiling," or the amount of programmed expenditures programmed, at P1.136 trillion for 2007.

Government revenues are projected to be at P1.113 trillion; disbursements, which include liabilities carried over to 2007, are programmed at P1.176 trillion with a deficit cap of P63 billion for next year.

"Such budget configuration is consistent with our goal of balancing the budget in 2008 [and] these are good figures to pursue on the eve of a zero-deficit era," Andaya said.

According to Department of Budget and Management (DBM) forecast, the budget deficit for next year would improve by 0.9 percent from the target 2.1 percent of the gross domestic product (GDP) this year.

Expenditures in 2007, according to Andaya, will correspond to 17.8 percent of output. He also said that the DBM will use a "planning ceiling" of P340.8 billion for personal services, P591.6 billion for maintenance and other operating expenditures (MOOE) and capital outlays of P204.3 billion, which is P56.4 billion higher than this year’s programmed P145.9 billion.

Andaya said that the aggregate budget ceiling was formulated using conservative revenue estimates and "still has to consider new revenue measures expected to take effect on 2007."

However, the impact of the revised value-added tax (RVAT) bill is incorporated in the fiscal program underlying the budget ceiling, the Andaya said.

Meanwhile, interest spending this year of P340 billion, which is 5.7 percent of output, would drop by 7.3 percent to P316.8 billion by next year. This decrease to 4.7 percent of output, Andaya said, will be due to the "improvement in the fiscal position of the national government."

The bulk of the budget increase would be used to finance various infrastructure projects in line with the Arroyo administration’s 10-Point Agenda and Millennium Development Goals.

Budget preparation for 2007 began last month with the Development Budget Coordination Committee, led by the DBM, discussion of the macroeconomic assumptions used for calibrating the proposed budget level. Next month the DBM will issue a budget call for the budget preparation activities at government agency levels.

The DBM established a three-year budget strategy in formulating the aggregate budget ceiling for next year in order for the government to have a long-term view of budgeting its resources and help balance budget earlier than programmed through "enhanced revenue effort and prudent spending" by prioritizing high-impact programs.

Using this strategy, Andaya claims, the DBM was left with enough elbow room for spending on new programs and for expanded existing priority programs after it has allotted enough funding for ongoing programs. This strategy also provided for inflationary impact on affected expenditure items. Likha Cuevas

http://www.abs-cbnnews.com/storypage.aspx?StoryId=37109

[dancethingy]

I hope that zero deficit will really happen. It'd be nice to be in the surplus for a change. Kudos Jamaicus for being up to date on all the topics here in the forum, especially on the economy. I adhere to the Clinton saying "IT'S THE ECONOMY STUPID"

[JAMAICUS]

Corporate income tax collection up 20% in 1st quarter
By Des Ferriols
The Philippine Star 05/01/2006

Corporate income taxes went up by 20 percent in the first quarter of the year due to the combined effects of rising corporate incomes and the increase in the corporate income tax rate from 32 to 35 percent.

The Department of Finance (DOF) reported that corporate incomes went up by at least 12 percent in the first three months of the year, boosting tax revenues from corporate income taxes.

Normally considered the lean quarter, finance officials said the first quarter performance could be indicative of higher-than-expected corporate income tax collections for the whole of 2006.

Finance officials said corporate income taxes from January to March reached P29 billion this year compared to only P23.5 billion over the same period in 2005.

The DOF said the increases in taxes paid was due to the emerging 12-percent increase in income as well as the adjustment in corporate income taxes which became effective late last year.

Without the withholding taxes, the DOF said the total net corporate income tax actually went up even more dramatically from P3.3 billion to P6.6 billion, an increase of over a hundred percent.

With the increase in the corporate tax rate from 32 to 35 percent, the DOF said the projected incremental increase in the corporate income tax revenues was nine percent.

Factoring in inflation as well as the tax rate increase, officials said total collections are expected to increase by only 17.4 percent. The difference was made by rising corporate profits early in the year.

Since the first quarter is seasonally slow, officials said corporate incomes would surge faster in the peak months of June and December, thus resulting to even higher corporate income tax collection.

This year, total revenues are projected to reach P978.844 billion and P75 of this would be incremental revenues from the tax reform packages passed by Congress in 2005.

These reforms include the adjustment in corporate income taxes, the lifting of various tax exemptions previously enjoyed by sectors such as oil, petroleum and professional services.

Government revenues are expected to hit P1.655 trillion by 2010, rising to about 17.6 percent of gross domestic product (GDP) from 15.2 percent in 2005.

Projections made by the Department of Finance (DOF) showed that government revenues would increase by an average of 17 percent per year in the next five years due mainly to the rise in tax rates.


http://www.philstar.com/philstar/NEWS200605010702.htm

[JAMAICUS]

Govt collects more VAT,
excise taxes in first quarter

By Likha Cuevas

THE Philippines collected more taxes from tobacco products and the value-added tax (VAT) scheme in the first quarter, according to data from the Department of Finance.

For the first three months of this year, the government collected P14.2 billion in excise taxes, 5.2 percent higher than the P13.5 billion collected last year.

Sin tax collections, or excise taxes levied on tobacco and alcoholic products, accounted for P10.9 billion, or 76.8 percent, of the total amount collected in the first quarter.

The government collected from cigarette manufacturers some P6.5 billion, up by 66.7 percent from last year.

Collections from alcoholic product manufacturers, however, went down by 4.3 percent to P4.4 billion year on year.

Two months ago, the Bureau of Internal Revenue (BIR) announced that it aims to raise P48.042 billion in excise taxes on tobacco and alcoholic products this year. This is 18 percent higher than the P40.695 billion in actual collections last year.

DOF data showed that tax collections from alcoholic products were set at P19.672 billion, 15.76 percent higher than the P16.994 billion generated last year. For tobacco products, the government aims to raise P28.370 billion, or 19.7 percent more than last year’s P23.701 billion. The targets incorporated incremental gains expected from a new law that raised excise tax rates starting January last year.

Excise tax collections from petroleum products, meanwhile, dropped by 36.4 percent to P2.8 billion from last year’s P4.4 billion. According to the finance department, the government lowered its collection target for petroleum products to incorporate measures implemented to mitigate the impact of high world oil prices.

Automobiles and other products accounted for P500 million of the total amount of excise tax collected for the first quarter. This was a 16.7-percent decline over last year’s P600 million. For automobiles alone, the government aims to collect P281 million, or 13.3 percent higher than the P248 million generated last year.

The Arroyo administration earlier cut its excise tax collection target this year by at least half to P8.386 billion from P18.708 billion in actual collections last year. The DOF said earlier that the target was lowered since the increase in the VAT would compensate for the cut in excise tax revenues.

Total VAT collections in the January to March period grew by 57.5 percent to P32.3 billion from P20.5 billion in the same period last year. This quarter’s collection was 11 percent higher than the P29.1-billion target set by the government.

http://www.manilatimes.net/national/...60502bus1.html