Without new taxes, NG to rely on nontax revenue By Reine Juvierre S. Alberto
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SM City Caloocan officially opens its doors on May 17, 2024. The ceremonial door opening was led by SM Supermalls’ President Steven Tan (center) and Vice President of Operations Junias Eusebio (right). SM City Caloocan celebrates a milestone as SM Prime Holdings’ 86th mall and the third in Caloocan City. This modern three-storey destination extends beyond Caloocan, poised to become a community hub for residents in neighboring areas like Quezon City, Valenzuela, Marilao, Meycauayan, and San Jose Del Monte in Bulacan. For details on exciting SM Supermalls events, visit www.smsupermalls.com or follow @ SMSupermalls on social media.
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AGUIO CIT Y—With the challenging target of raising P4.3 trillion in revenues this year without new tax measures, the Department of Finance (DOF) and its attached tax-collecting agencies will bank on non-tax revenues but only as a short-term solution. Office of the Chief Economist Undersecretary Domini SD. Velasquez said the government will “strategically maximize” potential revenues from non-traditional sources, focusing on non-tax revenues. “[The] non-tax [revenues] for sure is not until forever. It’s buying us time to ensure that everything is in place to make sure that BIR [Bureau of Internal Revenue] and BOC [Bureau of Customs] collections will improve,” Velasquez said at the SMC-EJAP Business Jour-
nalism Seminar over the weekend. On top of that, Velasquez said the DOF will improve its tax collections in e-commerce instead to plug the tax leakages in online marketplaces, specifically, those brick-and-mortar shops that transitioned to e-marketplaces. Starting July 15, 2024, the BIR will implement a tax withholding system on gross remittances made by electronic marketplace operators and digital financial services providers to sellers. With the majority of consumers shifting to the e-commerce market, Finance Secretary Ralph G. Recto stressed the need to ramp up the government’s digitalization efforts and align practices with countries with advanced tax collection systems, such as South Korea, Singapore, and Japan. Recto met with the commissioners of BIR and BOC on May
15, to assess the agencies’ revenue collection performance and strategize on areas where the DOF can offer support. “We’re keeping with the targets [and] will make [a] review by endJune,” Recto told reporters in a Viber message. The BIR and BOC will stick with the target of raising P3.05 trillion and P1 trillion, respectively. The remaining money will come from non-tax revenues such as dividends collected from governmentowned and -controlled corporations (GOCCs), privatization of government assets, and fees and charges. “That’s also the secretary’s matching order: that we improve our BIR and BOC collections. But as I said, we do recognize that it’s challenging. That’s why we have [non-tax revenues] in place,” Velasquez said.
T he gover nment collected P88.3 billion in dividends from state-run corporations as of May 6, 2024, higher by elevenfold than the P8 billion recorded from January to May last year. Recto further increased the mandated dividend remittance rate of GOCCs to the national treasury to at least 75 percent of their net earnings from the minimum 50 percent to improve non-tax revenue collections. Revenues generated by the BIR and BOC reached P912.9 billion and P299.7 billion in revenues, respectively, for a total of P1.212.6 trillion from January to April this year. Non-tax revenues collected as of end-April reached P206.4 billion. Meanwhile, the budget deficit measured against the gross domestic product (GDP) of the Philippines settled at 4.5 percent in the first quarter of 2024.
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Tuesday, May 21, 2024 Vol. 19 No. 217
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HIGHER LOAN INTEREST HIKES PHL DEBT SERVICE A
By Cai U. Ordinario
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@caiordinario
DOUBLE-DIGIT increase in the interest on the country’s loans led to a 7.1-percent growth in the country’s debt service burden, according to the Bangko Sentral ng Pilipinas (BSP). Data from the central bank showed the country’s debt service burden reached $2.38 billion in the January to February period this year. This was higher than the $2.23 billion posted in the same period in 2023. In 2023, the country’s total
debt service burden reached $14.75 billion. The data showed principal debt service burden contracted 0.17 percent to $1.18 billion in January to March 2024 from $1.18 billion in the same period last year. See “Higher,” A2
WANT TO KEEP YOUR TALENTED STAFF? TRY OFFERING THESE LABOR PAINS A laborer over the weekend works on a street being improved in Makati City. Reports said labor groups have raised concerns about the inadequacy of the minimum wage to provide families a decent standard of living, and also called for an end to blaming labor costs for business failures as they advocated for a nationwide wage hike. Meanwhile, the Philippine Statistics Authority (PSA) reported on Monday that costs for constructing residential houses have risen by 11 percent. Story below. NONIE REYES
Price of building residential structures up 11.4%–PSA By Ma. Stella F. Arnaldo
@akosistellaBM Special to the BusinessMirror
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IRTHDAY leaves, menstrual leaves, family insurance, internet allowance, retirement plans—these are among the enhancements in benefits packages companies are recommended to adopt to be able to retain talented and motivated employees. According to JobStreet’s Hiring, Compensation & Benefits Report 2024, companies should conduct more frequent
and comprehensive reviews to enhance their compensation and benefits strategy. “Many companies only focus on factors like salary benchmarking and evaluating pay guidelines but there is room for more proactive measures. Use benefits benchmarks to conduct simple internal surveys to gauge employee sentiments and needs. These cost-effective and efficient methods can significantly contribute to improving your compensation and benefits structure.” See “Want,” A2
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HE steep price of condominiums has made the construction of residential buildings more expensive per square meter (sqm) than non-residential buildings in March 2024, according to the Philippine Statistics Authority (PSA). Based on the latest Construction statistics, PSA said it costs P11,812.95 per sqm to construct a residential building in March 2024. This is 11.42 percent higher than the P10,602.23 per sqm needed to construct a non-residential building which includes commercial, industrial, agricultural, and institutional buildings. “[A] residential building is a build-
ing for which its major parts or more than half of its gross floor area is built for dwelling purposes. This type of building can be of the single type, duplex, apartment and/or accessoria, and residential condominium,” PSA explained. The higher cost was largely due to the cost per sqm of condominiums which has already reached P28,915.49 per sqm in March 2024. This represented a 21.8-percent increase from the P23,743.73 per sqm cost recorded in March 2023. Compared to February when the cost averaged P22,194.61 per sqm, the cost in March was higher by 30.28 percent. See “Price,” A2
PESO EXCHANGE RATES n US 57.6430 n JAPAN 0.3704 n UK 73.2470 n HK 7.3880 n CHINA 7.9778 n SINGAPORE 42.8286 n AUSTRALIA 38.5689 n EU 62.6579 n KOREA 0.0426 n SAUDI ARABIA 15.3702 Source: BSP (May 20, 2024)