DOF collections and DOJ leadership
October 16, 2025 | 12:00am
https://www.philstar.com/business/2025/10/16/2480108/dof-collections-and-doj-leadership
MANILA, Philippines — As the country’s corruption scandals continue to unravel, the economy suffers. See for instance these reports in The STAR this month: “Customs bribery a major barrier to investment in Philippines — US report” (Oct 8), “CPBRD warns of risks to long-term fiscal stability” (Oct. 12), “BIR chases billions from online sellers” (Oct. 14), “BIR sees lower tax collection due to DPWH fiasco” (Oct. 15), “DOF: Tamed spending due to corruption slowing growth” (Oct. 15).
The Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR) are the key tax-collecting agencies of the Department of Finance (DOF). These two bureaus on the revenue side have their share of public suspicion of corruption aside from huge agencies on the spending side like the DPWH, DepEd, DSWD and DOH.
DOF Secretary Ralph Recto has confirmed that the BIR’s collections have declined in August-September, that such downturn in revenues could serve as an early warning of slower economic growth. This will be reflected in the coming third and fourth quarter 2025 GDP performance.
Secretary Recto also revealed that the Philippines was poised to receive an upgrade in credit rating from “BBB+” to “A-” from S&P this year but this may not happen due to the continuing corruption scandal over flood control and related public infrastructure projects.
The DOF’s revenue collection function is partially crippled by our tax system that imposes high tax rate then giving exemption to certain sectors which defeats the purpose of revenue collections. For instance, the 12 percent value added tax (VAT) on sale of goods, food and services. The Philippine Retailers Association (PRA) has urged the government to impose VAT on goods sold through e-commerce platforms as many of these transactions remain untaxed while the traditional and physical retailers collect VAT, which raises the prices of their goods and make them more expensive compared to e-commerce retailers. I support the PRA here.
Senior citizens like me and people with disability (PWD) are also exempted from VAT in our purchases of food in restaurants and bars, hotel stay, plane fare, bus fare and boat fare, medicine purchase, and so on. And I notice that there are many fake PWD people – young, no obvious physical defect, maybe they have heart and kidney problem, eye or hearing defect, etc. But unlike the physically crippled, the blind, deaf and mute, those young people can still work like normal adults.
Exempting those PWDs and seniors like me from VAT payment while our VAT rate remains the highest in East Asia is highly distortionary in revenue collections.
I believe that the VAT rate should instead be brought down from 12 percent to 8-10 percent, then remove all VAT exemptions including purchase by seniors like me. This will remove the distortions in taxation, even raise overall VAT collections as the tax base is expanded, and the corrupt practice of many young people with fake disability getting VAT exemption is ended.
DOJ leadership
The Department of Justice (DOJ) needs a new secretary after Boying Remulla moved to be the country’s Ombudsman or chief anti-corruption investigator. Among the names that were floated to possibly succeed him is DOJ Undersecretary Jesse Hermogenes Andres.
I know Usec Jesse because he is also a fellow alumnus of the UP School of Economics, then he went to UP College of Law. Among his functions as DOJ Usec are: in-charge of the Law Enforcement Cluster — the National Prosecution Service, National Bureau of Investigation, Anti-Money Laundering Council, Anti-Terrorism Council, National Committee on Intellectual Property Rights and National Intelligence Board.
Last year, he briefly did two concurrent functions, as head of the Inter-Agency Council Against Trafficking and as OIC chairperson and CEO of the Energy Regulatory Commission (ERC). I am familiar with many energy issues especially the power and electricity sub-sector and from what I heard, Usec Jesse has dispensed some important reforms and decisions in his brief stint of less than two months as ERC chairperson.
He also held a Usec position two decades ago, as chief of staff with Usec position of then vice president Noli de Castro (2004-2010). He also held various corporate and government positions in the past.
In my vocabulary as an advocate of minimal government, government (anywhere in the world) has limited functions to protect the citizens’ three basic and natural rights: right to life, right to private property, and right to liberty.
The so-called right to education until college, right to health including non-infectious diseases, right to housing, right to monthly government allowance and so on, are not part of natural rights. They are modern inventions as societies and economies graduate from subsistence to abundance and prosperity. Such artificial “rights” are very often the main cause of persistent and annual budget deficit, leading to ever-rising public debt and needing ever-expanding taxes.
The rule of law – the law applies equally to unequal people, no one is exempted and no one can grant an exemption – requires both philosophical/judicial understanding and physical infrastructures of enforcement. Rendering fair and equal application of the law to all people is the height of justice administration.
I believe that Usec Jesse has the wisdom and the balls to render fair application of the rule of law in the country. May he be the next DOJ Secretary.
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