MANILA: Revenue collections by the Bureau of Customs contracted in September for a second month in a row as the peso depreciation failed to offset the impact of declining oil prices, preliminary data showed.
According to figures obtained by The STAR, the BOC collected P32.1 billion last month, 0.8 percent down from the previous year’s P32.9 billion and nine percent short of the P41.11 billion goal for the month.
In August, the agency’s collections declined seven percent year-on-year.
“The primary culprit is the lower prices of oil. We benefit from the declining peso value – which is by the way already rebounding – but not that much,” Customs Commissioner Alberto Lina said in an interview Thursday.
For the third quarter, the bureau also missed its target of P111.99 billion as collections only reached P89 billion, down 3.5 percent year on year.
From January to September, the BOC’s total haul still grew by 1.9 percent to P267.7 billion. The bureau, however, has a lot of catching up to do as its tax collections are still 42.7 percent below its nine-month target of P310.42 billion.
Global oil prices have plummeted by more than 40 percent for the past 12 months, averaging around $55 per barrel as against the government’s assumption of $70 per barrel, which was already revised downwards.
Based on figures earlier reported by the BOC, lower oil prices translated into P2 billion in monthly losses.
“Oil price does not only affect products that are oil based, but also products that are non-oil. Prices of basic commodities also go down if the price of oil is low. Therefore, valuation is affected, thus, duties and taxes imposed are also affected,” the bureau said in a statement.
The agency, however, noted the recent peso devaluation had a “positive effect” on collections, albeit “very minimal.”
The local unit has been down by more than four percent against the dollar from last year. Lower peso value makes imports more expensive, hence, a higher valuation as basis for duties and taxes.
Based from last year’s collections and peso performance, Finance Undersecretary Gil Beltran said Customs is likely to earn an additional P8 billion for every one-peso decline. The local currency closed at 44.39 versus the dollar last year. It closed at 45.90 last Friday.
Despite being down for most of the year, Lina said his bureau would continue on working on reforms to get closer to its P436.59 billion revenue target for 2015.
“That is an aspirational target. Of course, it is still possible to meet that for as long as we work hard and get our reforms going,” Lina said.
