Gov’t cuts ’26 target tax take to P4.44T

MANILA, Philippines – The Marcos administration has lowered its tax revenue target for 2026 as slower economic growth amid headwinds from the Middle East war tempered the government’s overall collection outlook.

Latest figures from the Development Budget Coordination Committee (DBCC) showed that the government’s tax collection target for 2026 was reduced by nearly 1 percent to P4.442 trillion from the previous P4.473 trillion.

READ: BIR topped revenue target anew in May

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The revised figures were approved during the DBCC’s 193rd meeting in June, replacing the goals adopted during its 192nd meeting in December.

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Broken down, the Bureau of Internal Revenue’s (BIR) collection target was trimmed to P3.393 trillion from P3.431 trillion, about 1 percent or P38 billion lower.

In contrast, the Bureau of Customs’ (BOC) revenue goal was raised to P1.011 trillion from P1.003 trillion, adding nearly 1 percent more or P7 billion to its target.

The revised goals come even as both revenue agencies have exceeded their collection targets so far this year.

READ: IMF calls for higher tax collections, debt cuts

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From January to May, the BIR collected P1.434 trillion, surpassing the target by P9.7 billion on the back of higher tax filings, improved compliance, and ongoing tax administration reforms. This year-to-date figure is equivalent to about 42 percent of the agency’s revised full-year goal.

Meanwhile, the BOC exceeded its first half goal by P11.5 billion after collecting P491.7 billion from January to June. This is roughly 49 percent of its updated target. Collections were supported by enhanced customs valuation and a weaker peso, which increased the peso value of imports, despite lower import volumes and the temporary suspension of excise taxes on kerosene and liquefied petroleum gas (LPG).

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The excise taxes on kerosene and LPG were suspended for three months beginning in April after global oil prices surged amid geopolitical tensions in the Middle East. The suspension was automatically lifted on July 9, after the one-month average Dubai crude price fell below the $80-per-barrel threshold.

The revised revenue targets came after the DBCC also slashed its 2026 economic growth forecast to 3.5 to 4.5 percent from 5 to 6 percent, after the fallout from the graft scandal and oil shock from the Middle East war impacted the country’s macroeconomic fundamentals.

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“The Philippines continues to benefit from sound economic institutions, a stable financial system, manageable public finances, and sufficient fiscal policy space to respond to emerging risks,” the DBCC said in a joint statement. INQ