Senate panel seeks reforms in revenue collection strategy amid ‘missed targets’

The Senate Committee on Finance on Tuesday pressed the Department of Finance (DOF) to explain the government’s repeated failure to meet its revenue collection targets in recent years.

During deliberations on the proposed 2026 budget of the DOF and its attached agencies, Senator Win Gatchalian demanded answers from Finance Secretary Ralph Recto over the government’s continued underperformance in revenue collection, citing inefficiencies and systemic challenges that hamper fiscal performance.

Gatchalian noted that while the government exceeded its targets in 2020, 2021, and 2022, it has consistently fallen short in most years since 2015.

“But we saw a good trend in non-tax revenues in the last three years. I believe these include dividends and assets,” Gatchalian said.

“My question is, what are the challenges faced by the government? Why does it continue to miss its revenue targets, and what innovations have been implemented to improve non-tax revenues?” he asked.

In response, Recto attributed the shortfalls primarily to the effects of global economic conditions and slow domestic growth.

“If you have a global economic slowdown, naturally it affects local GDP growth and the revenues of the Bureau of Customs,” Recto said.

The finance chief emphasized that revenue performance is closely tied to the country’s overall economic activity.

Lower trade volumes, weaker investment inflows, and a sluggish global economy have led to reduced collections, particularly for the Bureau of Customs (BOC), which relies heavily on import-related revenues.

Recto also cited corruption as a persistent obstacle to growth and fiscal efficiency.

He said that while the government has poured substantial funds into infrastructure projects—particularly flood control programs—some investments have failed to deliver returns due to mismanagement, “ghost projects,” and substandard implementation.

Recto, a former senator, presented the DOF’s proposed 2026 budget before the Senate Finance Subcommittee A, framing the agency’s fiscal roadmap around AmBisyon Natin 2040, the government’s long-term vision to transform the Philippines into a “prosperous middle-class society where no one is poor.”