Slower economic growth amid the ongoing US-Iran conflict may temper tax collections, but the Bureau of Internal Revenue (BIR) remains cautiously optimistic on hitting its P3-trillion annual target this year, its top official said.
BIR Commissioner Charlito Mendoza said the agency is ‘mindful’ that global uncertainties could indirectly affect economic activity.
‘The bureau remains cautiously optimistic and fully committed to meeting its targets through responsive tax administration and continued institutional reforms,’ he told The STAR in a Viber message.
Economic growth in the Philippines is closely tied to tax revenue collection, with household consumption driving value-added tax, excise and income tax receipts.
Economy Secretary Arsenio Balisacan has said that economic growth could go as low as 3.5 percent this year under the worst-case scenario of world oil prices staying at $150 a barrel. First-quarter gross domestic product (GDP) data will be released on May 7.
The Development Budget Coordination Committee is also considering adjustments to economic targets for its next meeting.
The economy expanded by 4.4 percent in full-year 2025, as the fourth quarter growth slowed to 3.9 percent amid lower public spending and investments tied to the flood control corruption issue.
‘At this point, our focus is to stay proactive, adaptive and steady in protecting revenue performance in the months ahead,’ Mendoza said.
BIR revenue collections rose by 4.2 percent to P719.2 billion as of end-March, data from the Bureau of the Treasury showed. This represented 23.18 percent of the P3.102 trillion target haul for 2026.
Rizal Commercial Banking Corp. chief economist Michael Ricafort noted that the sharp rise in petroleum prices will drive overall costs higher, squeezing disposable incomes of households, businesses and institutions.
This reduction in purchasing power is expected to impact consumption, which in turn could lead to lower tax collections.
Meanwhile, Mendoza said the extension of the 2025 income tax returns payment to May 15 is likely to impact its April revenue against its P420.53 billion goal for the month.
Despite this, the official said the ‘April collections will continue to be supported by the filing season, with some of that momentum carrying into May because of the extended deadline, while the Bureau stays responsive to the broader pressures arising from higher energy costs.’
President Marcos earlier announced that the government has extended the deadline for filing 2025 annual income tax returns from April 15 to May 15, providing relief to taxpayers as the country reels from price fuel shock tied to the Middle East conflict.
Asked about the proposed $100-million digitalization loan, Mendoza said this is progressing, with ongoing internal alignment and coordination with partner agencies.