Subic Freeport profits hit P3.5-B in six months

SUBIC Bay Freeport, one of the top income earning economic and Freeport zones in the country, collected P3.5 billion revenues derived from various government taxes in the first six months of the year.

Subic Bay Metropolitan Authority said that the combined collection of the Bureau of Customs (BoC) and the Bureau of Internal Revenue (BIR) reached P3.478 billion during the first half.

“The first half collection is actually 62 percent of the entire 2009 figure. So at this rate, we could be looking at a P6-billion plus total at the end of the year,” SBMA administrator Armand Arreza said.

Figures submitted by the BoC and the BIR showed that in June alone, the two government collection agencies posted a total of P826.52 million, the highest monthly cash collection in the six-month period, as the two collecting agencies came up with P473.93 million and P352.59 million, respectively.

For the whole six-month period, the BoC recorded cash collections totaling P2.508 billion. This exceeded last year’s total of P2.206 billion by P301.6 million or 13.67 percent.

In addition, BoC also processed government-to-government transactions amounting to P2.818 billion, thereby increasing its total cash and non-cash collections to P5.326 billion.

Duties and taxes collected by the BoC were derived from domestic and foreign ship calls, transshipment operations, and the taxes and duties paid for by the Freeport investors, including importation of oil, importation of motor vehicles, and other general merchandise.

For the same period, the BoC also exceeded its target of P2.054 billion by almost half a billion or 22.12 percent.

Meanwhile, the BIR posted a total of P970 million in cash collections derived from income taxes, value-added taxes, percentage taxes and other taxes paid for by the more than 1,000 Freeport business locators and their employees, as well as an increasing number of port users.

BIR’s cash collection in January-June 2010 topped last year’s P706.38 million, surpassing it by P263.86 million or 37.35 percent.

Arreza noted that part of the taxes collected by the BIR is the corporate tax, which comprises five percent of the gross income of locators here, and which the law imposes on business enterprises operating within the zone in lieu of national and local taxes.

He said that part of the corporate tax paid by Subic enterprises is allotted to local government units (LGUs) affected by or contiguous to the Subic Bay Freeport Zone.

Arreza added that starting in the second quarter of this year, the SBMA implemented a new scheme in collecting the two percent share of the LGUs.

Instead of going entirely to the BIR, the corporate taxes are split into 60 percent, which remains with the BIR, and 40 percent with the SBMA Treasury Department for direct remittance to the LGUs.

The LGU shares are intended to fund LGU development projects and provide for basic support services in health, education, and peace and order.

The SBMA revenue was issued to media amid reports that the national budget deficit ballooned to P196.7 billion in the first half, adding to the pressure on the government to keep the country’s finances under control.

According to media reports, the government tagged the failure to privatize state assets and a final spending flurry by the previous administration, but said they remained confident that this year’s expanded P325-billion deficit target would still be met.

The June shortfall alone was P34.6 billion as the government spent P126.7 billion while collecting only P92.1 billion.

Expenditures for the six-month period hit P788.8 billion, higher than the programmed P761.1 billion, versus revenues of P592.1 billion that were below a P615.9-billion target.

The January to June deficit also exceeded a P178.5-billion estimate offered by the previous government when it blew past its P145.2-billion first half goal in May. The five-month shortfall was P162.1 billion, which officials blamed on the failure to complete planned asset sales.

This explanation was reiterated on Wednesday by National Treasurer Roberto B. Tan in a statement issued to media, who said: “Privatization proceeds worth P30 billion programmed for the first half did not happen.”

The assets lined up for sale were a stake in the Malampaya natural gas project, a portion of the Food Terminal Inc. complex, and the lease of property owned in Japan .

The Aquino administration has lowered its 2010 privatization target to just P2 billion — which does not include the three assets — and officials have said it could resort to borrowings to narrow the deficit.

The country’s two main revenue agencies, the BIR and the BoC, both topped their first half targets: the former netted P403.5 billion, exceeding its P390.3-billion goal, while the latter netted P130.7 billion, also higher than its P124.1-billion mark.

But the Bureau of the Treasury was short of its P28.3 billion target, collecting only P24.9 billion, while income from other offices hit P33 billion, also short of the P73.3-billion goal.

Mr. Tan said the government was still keeping its 2010 deficit target of P325 billion — raised earlier this month from P300 billion.

“The increase in the collection target of the BIR for the whole year would cover the non-realization of privatization for the year,” he claimed.
The BIR’s 2010 collection goal has been hiked to P860.4 billion from P830.4 billion, and the BoC’s to P280.7 billion from P275.7 billion, on expectations of higher economic growth.

The Aquino government has said it would increase revenues by weeding out corruption in collection agencies and through better enforcement of existing laws before looking at tax increases.

Last year’s budget shortfall hit a record P298.5 billion, well in excess of the P250-billion target. Rey Garcia