The government’s revenue shortfall could reach as much as P100 billion for 2009 but finance officials said this is the “worst case” scenario.

“We always put down a number as our ‘best’ and ‘worst’ expectation so we could work around our targets better and come up with a medium case scenario,” Finance Undersecretary Gil Beltran said.

For example for this year, the worst-case budget deficit is P300 billion while the medium and “best” case numbers are P280 billion and the original program of P250 billion, respectively.

For the first 10 months of the year, the revenue shortfall was already at P75 billion.

The Bureau of Internal Revenue (BIR) had reported a shortfall of P39 billion against the target as of end-October, while the Bureau of Customs (BoC) posted a P36-billion gap versus program.

Beltran said the biggest number that they could think of as “worst case” scenario is if both the BIR and BoC will fall below the program by another P15 billion each for November and December. “The government has various measures so that the P30-billion additional shortfall could be prevented,” he added.

A BIR official, requesting anonymity, said they are looking at an overall revenue shortfall of P50 billion by the end of 2009. The increase in tax revenues hinges on a more buoyant outlook for economic growth, combined with higher imports, as different economic sectors start to recover.

Finance Secretary Margarito B. Teves said the BIR has been intensifying tax administration to recover shortfalls while the BoC has been improving database to correctly implement imports valuation.

Still, the International Monetary Fund (IMF) continues to express concern about the country’s revenue generation which was falling behind expectations. The IMF has stated that despite the improved value added tax compliance and tax administration, the overall tax effort has declined sharply due to legislative revenue-eroding measures which continue to threaten fiscal sustainability.