BIR: Excise tax gap to narrow in ’24 T
HE gap in excise tax collection could narrow further this year, as the Bureau of Internal Revenue (BIR) is banking on a higher take from vape products. Internal Revenue Commissioner Romeo D. Lumagui Jr. told reporters on Tuesday that the BIR is expecting a narrower gap between the actual excise tax collection and the target set for the year. “We’re hoping that with the increase in compliance of the vape players, [we could narrow the gap],” Lumagui said. The BIR is eyeing to collect a total of P337.797 billion in excise taxes in 2025, which is 7.89 per-
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cent higher than the P313.078 billion programmed in 2024. Last year, the BIR raised a total of P304.279 billion in excise taxes, which is P8.799 billion short, or 2.89 percent lower than its target. “So when we capture the vape players, definitely, the gap will be little,” Lumagui said. Still, the shift in consumer preference from using cigarettes to vape products remains a concern, according to Lumagui. Last year, the BIR only collected P134 billion in excise tax on tobacco, P51.3 billion short of the P185.3-billion target. The BIR has suggested a unified tax rate on vape products to equal-
ize it with the rates imposed on cigarettes. “If your excise tax rates are too high, then it’s more lucrative for the illicit traders as well,” Lumagui said earlier. Currently, the tax imposed on a pack of cigarettes costs P66.15, while it is currently being sold for as low as P40 in the illicit market. The BIR started to record a shortfall in excise tax on tobacco in 2022, when it suffered a P49.3billion loss. This was followed by a P39.4-billion deficit in 2023 and P51.3 billion in 2024. BIR data showed that 44 percent of the total excise taxes this year will come from tobacco prod-
ucts, worth P148.920 billion. This is 5.07 percent higher than last year’s goal of P141.729 billion. About P130.038 billion in excise taxes is expected to be generated from alcohol products, which is 10.98 percent higher than the P117.163 billion target last year. Excise taxes from sweetened beverages are also pegged at P39.279 billion, up by 13.42 percent year-on-year from P34.631 billion. Further, P11.070 billion is set to be collected from mining, P6.503 billion from automobiles, P15 million from cosmetic procedures and P10 million from tobacco inspection fees. Reine Juvierre S. Alberto
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ANALYSTS: BSP SURVEY SIGNALS SLOW GROWTH
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By Reine Juvierre S. Alberto @reine_alberto
HE weak business sentiment in the Philippines could spell slower economic growth in the coming quarters, as the Bangko Sentral ng Pilipinas’s (BSP) survey revealed a drop in business confidence, analysts said. In a commentary by New Yorkbased think tank GlobalSource Partners, country analysts Diwa Guinigundo and Wilhelmina Mañalac said national income accounts, institutions and even business sentiment point to expectations of a slower economic growth. “If there is another advanced indicator of economic growth, it is the BSP’s business expectations survey [BES]. Business sentiment, planned activities and expansion have been found
to be closely correlated to actual national income accounts,” the analysts said. The survey conducted by the BSP indicates that the business sentiment in the Philippines is “less optimistic” in the first quarter of 2025. The overall confidence index (CI) fell to 31.2 percent in the first quarter of 2025 from 44.5 percent in the fourth quarter of 2024. Concerns on post-holiday decline See “Analysts,” A2
‘NEVER MIND TARIFF WAR, BOOST BIZ ENVIRONMENT’ By Ada Pelonia
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@adapelonia
SIAN countries should focus on implementing reforms aimed at improving the business environment, logistics, and cross-border infrastructure instead of retaliating from Washington’s new tariff policy, an economist at the Economic Research Institute for Asean and East Asia (Eria) said. In a statement, the Philippine Exporters Confederation, Inc. (Philexport) cited a recent article by Venkatachalam Anbumozhi, senior research fellow at the Eria. Anbumozhi said that Asia, particularly Asean, should not join the tariff wars but focus instead on meaningful domestic reform, strengthening regional cooperation, and investing in resilient supply chains. He noted that at first glance, imposing tariffs may seem like an effective and patriotic way to protect domestic industries and jobs. “But in reality, such protec-
tion often leads to complacency. Industries shielded by tariffs lose incentives to innovate and adapt. Worse still, tariffs almost inevitably provoke retaliation, escalating into trade wars that hurt everyone,” he was quoted in the statement as saying. “Artificially inflated prices due to import duties prop up inefficiency. Eventually, consumer demand declines, markets shrink, businesses fail, and jobs are lost on all sides,” he added. Anbumozhi then proposed focusing on strengthening regional integration and economic resilience “since the vast majority of global trade—87 percent— does not depend on the US.” “Rather than entering into a tariff war, Asean and Asian economies should prioritise reducing internal barriers to trade, enhancing regional cooperation, and investing in building resilient supply chains,” he said. “The Covid-19 pandemic proved that Asian firms adapt quickly to shocks—often faster See “Never,” A2
EU DEPLOYS OBSERVERS FOR 2025 PHILIPPINE MIDTERMS The European Union Election Observation Mission (EU EOM) has deployed 72 long-term observers across the Philippines ahead of the May 12, 2025 midterm elections. Before their deployment, they underwent a briefing in Manila on the electoral framework, political landscape, media and social media environment, and campaign dynamics. In total, over 200 international observers from EU Member States, Canada, Norway, and Switzerland will be monitoring the electoral process. The 2025 midterm elections will determine 12 of the 24 Senate seats, all seats in the House of Representatives, and thousands of local government positions nationwide. Story in A3 Nation, “EU sends 72 election observers.” ROY DOMINGO
China on US tariffs: We hope PHL chooses ‘right side of history’ By Malou Talosig-Bartolome
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HE Chinese Ambassador to Manila on Wednesday expressed Beijing’s hope that the Philippines will join China’s call for a “rules-based international order” on the tariff war with the United States. “Despite the constraints of our political relations, the economic and trade relationship” has stayed
“very solid in the past few years,” Chinese Ambassador Huang Xilian told reporters in a press conference. “We believe the Philippine’s response of course is you will choose to be on the right side of history, preceding from its own interest,” he added. China is the largest trading partner of the Philippines, with a trade deficit worth US$54 billion in favor of China.
Huang said Asean and China have recently concluded the third version of the Free Trade Agreement last week. Asean-China FTA 3.0 reduced trade barriers goods related to ecommerce and digital economy, and agriculture sector. “Asean is the largest trading partner of China. We have a big stake in a free and fair international trading system. China and Asean
member states are also members of China-Asean Free Trade Agreement and RCEP. So it is in the common interest of Asean and China to have free trade, to safeguard a stable and fair international economic order. “In the light of the common challenges, Asean countries can be united in responding to such challenges and we hope that Asean and See “China,” A2
PESO EXCHANGE RATES n US 56.9760 n JAPAN 0.3980 n UK 75.3906 n HK 7.3448 n CHINA 7.7888 n SINGAPORE 43.2062 n AUSTRALIA 36.0943 n EU 64.2974 n KOREA 0.0399 n SAUDI ARABIA 15.1843 Source: BSP (April 16, 2025)