DOF Proposes P37.8 Billion Budget for 2026 to Strengthen Tax Collection and Digitalization

MANILA, Philippines – The Department of Finance (DOF) has put forward a budget request of P37.8 billion for 2026, representing a 1.09% increase from this year’s allocation. The budget is aimed primarily at enhancing tax collection efficiency and advancing digital transformation within the department and its agencies.

The largest share of the proposed funding goes to the Bureau of Internal Revenue (BIR), which is slated to receive P18.2 billion. The BIR aims to generate P3.6 trillion in tax revenues next year. Following closely is the Bureau of Customs, allocated P5.3 billion with a target of collecting over P1 trillion in customs duties.

The DOF’s budget for 2026 includes the following allocations:

• Office of the Secretary: P1.2 billion
• Bureau of Customs: P5.3 billion
• Bureau of Internal Revenue: P18.2 billion
• Bureau of Local Government Finance: P974 million
• Bureau of the Treasury: P4.7 billion
• Central Board of Assessment Appeals: P17 million
• Insurance Commission: P6,000 (plus P1.18 billion from the Insurance Fund in automatic appropriations)
• National Tax Research Center: P145 million
• Privatization and Management Office: P134 million

The Insurance Commission (IC) is financed mainly through the Insurance Fund, a pool generated by premium taxes as mandated by the Internal Revenue Code. Although its new appropriation request is minimal at P6,000, the IC will tap into the ongoing Insurance Fund for operational expenses.

BIR Commissioner Romeo Lumagui Jr. highlighted that the additional budget will support the establishment of a national contact center and the expansion of e-lounges in district offices to facilitate easier taxpayer engagement. Lumagui further noted that 85% of tax payments were processed electronically in 2024, which significantly contributed to the BIR achieving collection milestones unseen in two decades.

The budget proposal passed the House plenary on September 23, with an updated total of P37.91 billion that incorporates the rollout of the Taxpayers’ Rights Program. Finance Secretary Ralph Recto is scheduled to present and defend the DOF’s budget before the Senate Committee on Finance on September 25.