DOF

FY2027 principal NEP allocations and original BOC request: Department of Finance (DOF): PHP 32.034 billion; Bureau of Internal Revenue (BIR): PHP 19.4 billion; Bureau of Customs (BOC): PHP 5.9 billion; Bureau of the Treasury (BTr): PHP 4.1 billion; DOF Office of the Secretary (OSEC): PHP 1.1 billion; Insurance Commission (IC): PHP 656.7 million; Bureau of Local Government Finance (BLGF): PHP 568.5 million. These are the proposed FY2027 National Expenditure Program (NEP) principal allocations.

The combined National Tax Research Center (NTRC), Privatization and Management Office (PMO), and Central Board of Assessment Appeals (CBAA) NEP line was PHP 307.9 million, reported as NTRC PHP 148.4 million, PMO PHP 134.8 million, and CBAA PHP 24.7 million.

In discussion of original submissions to the Department of Budget and Management (DBM), BOC's original request was cited as PHP 29 billion, a separate figure from its NEP allocation and its later priority reconsideration list. The hearing did not state clear original FY2027 submission totals for DOF as a whole or the other listed agencies.

FY2027 department-wide allocation and appropriation structure: For FY2027, the Department of Finance (DOF) proposal comprised PHP28.6 billion in new general appropriations and PHP3.4 billion in automatic appropriations, including retirement and life-insurance premiums and special accounts. Finance Secretary Frederick D. Go said the department-wide allocation was 3.49% below the FY2026 General Appropriations Act (GAA), a decrease of PHP1.159 billion.

Go described the appropriation mix as about 52% for personnel services, 35% for maintenance and other operating expenses (MOOE), about 13% for capital outlays, and less than 1% for financial expenses. Digitalization and modernization were priorities across agencies, with PHP3.8 billion described for transforming processes and integrating systems.

At year-end 2025, DOF-wide obligations stood at 87% and 90% of obligations had been disbursed. As of July 31, 2026, 49% of available FY2026 GAA allotments had been obligated, and 75% of those obligations disbursed. Go said the Office of the Secretary had earned an unmodified Commission on Audit (COA) opinion for five consecutive years, and emphasized timely implementation and prudent execution.

Department of Finance budget support and requested restoration: Senator Erwin Tulfo said he supported the Department of Finance (DOF) budget request despite reductions, and urged restoring what had been cut and possibly increasing resources because DOF and its revenue agencies support government funding. DOF Secretary Frederick D. Go thanked him and said the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) each had budgets equivalent to two days of collections. He added that DOF had received a FY2027 National Expenditure Program (NEP) proposal with several reductions from its 2026 levels. His statement was support for restoration and additional resources; the committee did not approve an increase in this exchange.

Revenue measures and projected yields: Senator Joseph Victor "JV" G. Ejercito asked what revenue measures the Department of Finance (DOF) was using to meet targets. DOF Undersecretary Karlo Fermin S. Adriano said implemented tax policies, including the mining fiscal regime, were expected to generate about PHP30 billion in additional revenue on average. He separately estimated a net impact of about PHP43 billion if proposed measures were enacted; the estimates described separate implemented and proposed measures.

Bureau of Internal Revenue allocation and collection target: The Bureau of Internal Revenue (BIR) had a FY2027 National Expenditure Program (NEP) allocation 6.9% above its FY2026 GAA level. The increase reflected higher personnel costs after compensation adjustments under Executive Order No. 64, Series of 2024; MOOE was to rise 22.9% for operating needs, while capital outlays were proposed 83.2% lower after FY2026 building and vehicle funding. Go projected approximately PHP3.7 trillion in BIR collections for 2027, separate from the bureau's appropriation. The bureau had surpassed PHP3 trillion in tax collections for the first time in 2025.

Bureau of Internal Revenue operating request: Secretary Go separately described a later prioritized wish list for the Bureau of Internal Revenue (BIR): a little over PHP1 billion in necessary operating funds, also described as about PHP1 billion. He sought reconsideration of these operating needs.

Bureau of Customs allocation and collection target: The Bureau of Customs (BOC) FY2027 NEP allocation was 9.7% below its FY2026 budget, with a substantial reduction in MOOE for information and communications technology requirements. Go said the comparison was affected by PHP180.5 million in confidential funds specifically included in the FY2026 GAA and omitted from the FY2027 NEP. He projected approximately PHP1.1 trillion in BOC collections for 2027. He said the bureau would continue digital-system integration, border administration and revenue collection.

Bureau of Customs funding requests: Bureau of Customs (BOC) Commissioner Ariel F. Nepomuceno said the bureau had no 2026 budget for rendering condemned goods and no budget or payment for condemnators. He sought immediate additional maintenance and other operating expenses (MOOE) so BOC could carry out its own rendering, and said construction of condemnation facilities would take longer. For its Customs Processing System (CPS), BOC was pursuing a proposed public-private partnership (PPP), since the project had no FY2026 budget, with legal and technical discussions ongoing.

Department of Finance (DOF) Secretary Frederick D. Go said BOC's request had been cut and that he would submit a letter asking the committee to consider an additional PHP10 billion for BOC; construction of condemnation facilities was item eight on the list. Pangilinan expressed support, but no appropriation was approved.

Restoration request for BOC condemnation capacity: Nepomuceno said BOC had no in-house condemnation facility and had long lacked funding for condemnation activities, leaving it dependent on private providers. Villanueva asked how many providers were involved and what incentives they had. Nepomuceno said more than twenty were accredited and that he would provide the exact count, but he did not explain their incentives.

Secretary of Finance Frederick D. Go said a small budget for BOC's own condemnation facilities had appeared in the original request but was removed from the NEP, and asked the Senate to consider restoring it. He gave PHP241.8 million for the facility and a separate PHP380 million provision for condemnation. Presiding Senator Joseph Victor "JV" G. Ejercito asked the cost on the record. Villanueva said he would support the facility; the exchange records support, not an appropriation approval.

Bureau of Customs budget request and port facilities: Bureau of Customs (BOC) Commissioner Ariel F. Nepomuceno said the agency had put its scanner, ICT and equipment needs on a priority list for congressional reconsideration. Senator Joseph Victor "JV" G. Ejercito noted that BOC capital outlay had fallen 25%; Nepomuceno said scanner procurement and replacement were the main cuts. He described a later reconsideration list totaling PHP 10.14 billion, including ICT, machinery, insurance, vessel and condemnation needs. This was a later prioritized request for congressional reconsideration, separate from the original submission and the NEP.

Nepomuceno requested three sea vessels and said 19 of BOC's 20 existing vessels were broken; the priority request also included repairs, insurance, scanners, condemnation facilities and operating costs. He said the Philippine Navy and Philippine Coast Guard (PCG) provided help but had their own missions.

Ejercito raised the burned Port of Manila headquarters, where staff were still using a temporary basketball-court office. Nepomuceno said current-year funds covered design of the Port of Manila offices but not the full BOC complex; BOC was leasing temporary space while design and construction preparations proceeded, with construction expected around 2028. He said BOC needed maintenance and staffing capability as well as vessels, with PCG helping design the broader maritime system.

Seized-vehicle auction revenue: Senator Christopher Lawrence T. Go (Bong Go) asked Bureau of Customs (BOC) Commissioner Ariel F. Nepomuceno whether seized imported vehicles would be destroyed or auctioned. Nepomuceno said auction is the policy, with public bidding streamed online; donation is legally possible, while destruction may be directed by a higher authority. BOC reported nearly PHP 500 million in auction proceeds and another potential PHP 500 million from luxury vehicles still awaiting auction. These are proceeds and prospective proceeds, not an appropriation.

BOC collection target and receipts: Bureau of Customs (BOC) Commissioner Ariel F. Nepomuceno reported a January-August 2026 collection target of PHP659 billion and actual collections of PHP664 billion, more than PHP5 billion above target. He also said 2026 collections were more than PHP43 billion higher year on year for the same period. He attributed the result to collection efficiency and ongoing reforms, including work by port collectors, while noting that import volumes had declined for some goods. These are collection-target and performance figures, not a BOC NEP allocation.

Bureau of the Treasury allocation and operating requirements: The Bureau of the Treasury (BTr) FY2027 NEP allocation was 13.7% below its FY2026 GAA level. Within MOOE for national-government requirements, the presentation compared PHP576 million in 2026 with PHP45.8 million in 2027. Go said valid 2026 appropriations carried into 2027 were expected to cover transaction fees paid to government depository and agent banks for processing collections. BTr was responsible for cash, debt and financing requirements, including the projected PHP1.7 trillion FY2027 fiscal deficit.

Department of Finance Office of the Secretary allocation: The DOF Office of the Secretary FY2027 NEP allocation was 13% below its FY2026 GAA level. Go attributed the decrease mainly to lower funding for information-technology projects as the department completed the three-year Information Systems Strategic Plan. The FY2027 proposal also omitted FY2026 funding for the planned Philippine hosting of the Extractive Industries Transparency Initiative Global Conference.

Insurance Commission NEP allocation and reduced operating provisions: The Insurance Commission (IC) FY2027 NEP level was 44.7% below its FY2026 GAA level. The decrease was concentrated in MOOE and capital outlays: the NEP omitted funding for motor vehicles and some travel, training and consultancy, and reduced information-technology and other professional-services support. Go said the amounts matched DBM's recommended levels.

Bureau of Local Government Finance NEP and project completion: The Bureau of Local Government Finance (BLGF) FY2027 NEP level was 42.9% below its FY2026 GAA level. Go attributed most of the decrease to a PHP400 million allocation for an Asian Development Bank (ADB)-assisted Local Governance Reform Project (LGRP) in 2026, which had no corresponding FY2027 provision as the foreign-funded project neared completion. The FY2027 NEP also provided no new capital outlay for digitalization or transport equipment, while regular personnel and operating requirements were higher.

Combined NEP lines for the National Tax Research Center, Privatization and Management Office, and Central Board of Assessment Appeals: The National Tax Research Center (NTRC), Privatization and Management Office (PMO), and Central Board of Assessment Appeals (CBAA) together accounted for 0.96% of the DOF-wide FY2027 NEP. NTRC's allocation was 3.6% lower mainly because FY2027 omitted capital outlays for information-technology equipment and motor vehicles. PMO's budget showed a minimal increase attributed to compensation adjustments. CBAA's proposal was higher mainly because of personnel-services requirements under Executive Order No. 64.

Prior-year border-inspection funding: Senator Francis Kiko Pangilinan noted that the Department of Agriculture (DA) received PHP1 billion in the previous budget for its first-border inspection program, which was still being put together. He urged that the work be completed; this was a reference to prior-year funding, not a new request or approval in this exchange.

Agricultural investment proposal and infrastructure benchmark: Senator Francis "Kiko" Pangilinan said consistent policy, good governance and investor confidence could bring private investment and expand fiscal space. He recalled Department of Public Works and Highways (DPWH) funding of about PHP160 billion during his first term and contrasted it with today's amount around PHP1 trillion; he separately characterized the 20-year change as seven to ten times. He also advocated a sevenfold agriculture-budget increase over 10-15 years. These were Pangilinan's comparisons and proposal, not a DOF commitment. Secretary Go agreed that investment and the business environment mattered, and clarified that his earlier answer concerned limited fiscal space for infrastructure allocations.

Foreign-assisted project funding and appropriation path: Ejercito said delayed government payments for foreign-assisted projects, including the North-South Commuter Railway and Metro Manila Subway, had pushed expected operations from around 2020 to 2032. He said the government counterpart share had been in unprogrammed funds for two years and that peso depreciation'from above PHP40 to about PHP60 per U.S. dollar, in his estimate'made delay more costly. He asked how to protect the funding. Go agreed state contractual obligations should be in programmed rather than unprogrammed appropriations, while noting the issue crossed into the Department of Budget and Management's remit. Ejercito said he was considering automatic appropriations and would raise the matter during the DBM sub-budget; no mechanism was adopted in this exchange.

Department of Transportation rail funding and investor discussions: Ejercito said the Mindanao Railway Project and South Long Haul remained unfunded in the proposed FY2027 Department of Transportation (DOTr) budget after loan deadlocks, although studies and right-of-way work had begun. He urged at least funding the project-management offices to preserve that preparatory work. He asked whether potential investors or creditors were discussing full funding. DOF Undersecretary Joven Z. Balbosa said India had expressed interest and bilateral partners were interested in supporting project preparation or updating the Mindanao Railway plans; he confirmed that takeover options were part of discussions. Ejercito mentioned Spain, the European Union and Korea as possible prospects, while warning that delays and depreciation could increase costs. These were exploratory discussions, not secured financing or a completed funding commitment.

Health earmarks and appropriation requirements: Ejercito asked officials to confirm his own computation that about PHP300 billion in earmarked collections intended for PhilHealth remained unreleased. Adriano explained that DOF certifies sin-tax collections by product and sends certifications to the Department of Budget and Management (DBM); under the Universal Health Care (UHC) Law, spending remains subject to appropriation, with legislators determining the amount. He offered estimated earmarks for PhilHealth and UHC by sin-tax product, and Ejercito asked for submission to the committee. DOF Secretary Frederick D. Go said he had nothing against the health earmark, citing it as an example of how earmarks narrow fiscal space.

PhilHealth appropriations, remittance, and earmarking: Senator Go questioned the treatment of Philippine Health Insurance Corporation (PhilHealth) funds and the gap between statutory earmarks and amounts placed in the budget. For 2024 he cited PHP 79 billion in earmarked funds against PHP 40.283 billion in approved subsidy; later he used PHP 61.514 billion as the 2024 budget figure, without reconciling their bases. He said PHP 60 billion was remitted to the National Treasury; Department of Finance Secretary Frederick D. Go later confirmed that the PHP 60 billion had been returned to PhilHealth during his tenure, following the Supreme Court decision. Senator Go contrasted a PHP 69.8 billion 2025 earmark with a zero PhilHealth allocation in the enacted budget.

For 2027, Senator Go cited a PHP 75.2 billion statutory earmark and a PHP 74 billion amount in the proposed National Expenditure Program (NEP); the latter was a proposal, not an enacted appropriation. Secretary Frederick D. Go said the Department of Finance could certify revenues earmarked for PhilHealth and provide information, while the Department of Budget and Management finalizes the NEP. He said the Court decision should prevent a repeat of the transfer.

Philippine Deposit Insurance Corporation restoration question: Ejercito asked whether the Department of Finance (DOF) recognized a present policy or financial obligation to restore PHP 107.23 billion taken from the Philippine Deposit Insurance Corporation (PDIC), or whether restoration depended on a Supreme Court order. DOF Secretary Frederick D. Go replied that the Department of Budget and Management had included PHP 57 billion in unprogrammed appropriations. When Ejercito asked whether the total was PHP 107 billion, Go first said PHP 110 billion, then corrected himself to PHP 107 billion. The exchange did not establish a completed restoration or a Supreme Court ruling.

Fiscal framework, debt profile and budget execution: Go described the DOF's mandate as raising and managing public resources while preserving fiscal stability. He said national-government debt stood at PHP12.79 trillion when the administration took office in 2022. Revenues had grown an average 10.54% annually over four years. He said the fiscal-deficit ratio had fallen from 8.6% in 2021 and 7.3% in 2022 toward 5.4% by the end of 2026.

For 2025, national-government debt was 63.2% of GDP and general-government debt 56.8%, below the 70% international benchmark he cited. Go described 67% of debt as domestic, 90% as fixed-rate and 84.1% as long-term, with maturities over five years, and cited two A-minus sovereign ratings from Japanese agencies. He also cited the planned January 2027 inclusion of peso-denominated government bonds in JPMorgan’s Government Bond Index Emerging Markets as a sign of investor confidence.

Smuggling estimates and single-window progress: Pangilinan recalled a smuggling-loss estimate from the previous budget season of PHP160-170 billion. BOC Commissioner Nepomuceno cited a more conservative estimate of at least PHP30 billion and contrasted it with reports of more than PHP100 billion. He said differences could reflect imports sent directly to economic zones for export and not intended for domestic sale; he still described the lower estimate as substantial.

Nepomuceno said BOC could count container movements reported by port operators but could not accurately measure the true value of imports. The National Single Window (NSW) could improve valuation and provide a shared paper trail. Because BOC did not control the NSW, it was developing a CPS to automate import processing and connect prioritized agencies in real time, including permits, customs documents, assessments, payments and bank records. BOC expected to pilot the system around June or July next year, initially at the Port of Batangas, an airport and another port outside Metro Manila. It eventually planned coverage of 17 major ports and 39 subports. DOF Undersecretary Rolando T. Ligon Jr. said four agencies were onboarded, with BOC in progress and 22 more targeted during the year; onboarded agencies could operate while remaining connections were completed. The full onboarding target was 73 agencies over about a year and a half.

Pangilinan welcomed the filing of smuggling cases and asked about other implicated parties; the exchange supplied no case-specific follow-up answer.

Condemned meat and food-safety controls: Pangilinan cited losses from African swine fever (ASF) at PHP60-70 billion and questioned whether import controls and condemnation procedures were working. Nepomuceno confirmed that frozen chicken seized as smuggled from Subic was intended for condemnation, said an alleged sale arrangement was under full investigation, and said he had ordered action against potentially involved personnel and the condemnation-facility owner. Pangilinan cited the seized chicken as worth about PHP7 million and said it was to be sold at PHP120 per kilogram; Nepomuceno confirmed the enforcement account and clarified that the National Bureau of Investigation (NBI) had made the apprehension.

Pangilinan also recounted a separate Imus incident in which, he said, meat guarded during transport for condemnation was later sold to fishpond operators as tilapia feed. He urged the DA and BOC to agree on a memorandum of agreement and jointly oversee condemnation. The Subic investigation was ongoing.

Agricultural lending and extension benchmarks: Pangilinan asked Land Bank of the Philippines (Land Bank) and Development Bank of the Philippines (DBP) for data on small farmers and fisherfolk lending over the prior two years: direct and partner-released loans, borrower and repeat-borrower counts by region, hectares planted, yields, lending timelines and the number and approvals of regional loan officers. He said small producers found the process cumbersome and sometimes turned to informal 5-6 lenders. He cited Land Bank figures showing PHP499 billion in lending to 888 large corporations compared with PHP1.55 billion, or 0.175%, lent directly to individual farmers, fisherfolk and agrarian reform beneficiaries.

He also cited PHP11 billion in government purchases of agricultural products through the Sagip-Saka law as of June 2026, suggesting market access could inform creditworthiness. He asked how many Land Bank-financed cooperatives sold into government markets.

Pangilinan said the Agri-Co-Ops Bill had passed the Senate on third reading and that he was considering credit incentives. He described renationalizing agricultural and fisheries extension services and re-establishing a Bureau of Agriculture and Fisheries Cooperatives under the DA as priority measures. For benchmarking, he contrasted San Luis, Pampanga, with 3,500 farmers and five local DA staff, with Taiwan's reported ratio of one extension worker per 18 farmers and organized farmer associations. He said extension staffing, financial-literacy support, training and cooperative capacity could build scale and make borrowers more creditworthy. Go undertook to have Land Bank and DBP send the requested data before plenary.

National debt outlook and debt management: Ejercito cited national debt of PHP19.39 trillion as of July 2026, debt-to-GDP at 66%, a projection above PHP21.48 trillion by end-2027, and PHP3.3 trillion in expected borrowing for the coming fiscal year. He put FY2027 interest payments at PHP1.114 trillion and asked how revenue strategies could keep interest costs from crowding out other spending. DOF Secretary Frederick D. Go confirmed the figures but distinguished national-government debt from general-government debt: about 66% versus 58% of GDP. Go cited a 70% comparison threshold and a general-government debt-to-GDP target of 56.1% for 2030.

Treasurer of the Philippines Sharon P. Almanza said debt service would rise as government financed the deficit and productive spending, while the Treasury managed portfolio risks and foreign-exchange exposure. She said replacing older low-rate debt made borrowing about 200-300 basis points more expensive. Go described borrowing 70-75% in pesos and 25-30% in foreign currency, preferring long-term borrowing where possible but considering shorter terms because of cost; about 90% of debt carried fixed rates.

Asked whether consolidation meant expenditure compression, Adriano confirmed a deficit target falling from 5.1% in 2027 to 3.5% by 2030; Ejercito cited disbursements declining from 20.8% to 19.1% of GDP. Go said revenue grew 10.5% annually but agreed spending discipline was needed as interest and legislated or earmarked items tightened fiscal room. He said the Development Budget Coordination Committee (DBCC) adjusts projections when growth, inflation, foreign-exchange or oil-price assumptions change; after correcting himself, he said it meets quarterly.

Infrastructure investment and fiscal space: Ejercito promoted Senate Bill No. 2, the proposed Master Plan for Infrastructure and National Development, as a long-term direction for transport, energy and industry, regional growth and jobs, including the Mindanao Railway. He asked how to preserve fiscal discipline without sacrificing investment. Go replied that the proposed PHP7.2 trillion national expenditure program included PHP1.1 trillion in interest expense, which he called a contractual commitment; the remaining PHP6.1 trillion left little room because many items were required by law or earmarked.

Ejercito said infrastructure spending had been about 2% of GDP for decades and was now about 5%, arguing underinvestment left the country behind regional peers. Go expressed personal support for an aligned infrastructure master plan, saying a common direction would reduce discretion across programs.

Create More tax incentives and economic-zone monitoring: Ejercito asked whether DOF, the Bureau of Internal Revenue (BIR) and investment-promotion agencies jointly monitored possible leakage of value-added-tax zero-rated raw materials into the local market. Go said investment-promotion agencies had overlapping roles and described an agreement for the Philippine Economic Zone Authority (PEZA) to focus on export-oriented businesses and the Board of Investments (BOI) on domestic enterprises, which he said would help police registered firms and reduce leakage. BIR Commissioner Charlito Martin R. Mendoza said VAT refunds for zero-rated transactions took no more than 90 days; BIR relied on investment-agency certifications and reduced required documents from 30 to 9-17.

After Ejercito acknowledged Senator Joel Villanueva, Villanueva briefly said he had been present and supported the department. Bureau of Customs (BOC) Commissioner Ariel F. Nepomuceno then said BOC had received reports of possible economic-zone infractions, maintained a list of companies it was monitoring for probable violations, and recognized potential risks from domestic and foreign enterprises operating in the zones.

Cigarette seizure and BOC-HPG investigations: Ejercito asked about two customs personnel allegedly caught trying to resell 225 boxes of smuggled cigarettes that had been seized for destruction. Nepomuceno said the cigarettes were apprehended in Subic and were supposed to be destroyed at a private condemnation facility in Bulacan. He described a dispute after the Highway Patrol Group (HPG) arrived: BOC personnel were in uniform, identified and acting under a signed mission order, but Nepomuceno objected to BOC staff being made to raise their hands and surrender their phones. He referred the matter to the Philippine National Police (PNP) leadership and said BOC was conducting a parallel investigation; at the time of the exchange, both investigations were ongoing. Ejercito also asked about action against BOC personnel, and Nepomuceno said they were under investigation.

Ejercito also welcomed prompt action on an abuse complaint involving a customs unit head. Nepomuceno confirmed that the head had been replaced with Secretary Go’s support.

CREATE MORE revenue assumptions: Ejercito asked whether CREATE MORE revenue estimates accounted for behavioral responses and the cost of longer or more generous incentives. DOF Undersecretary Karlo Fermin S. Adriano said DOF had no revenue projection for potential tax expenditures tied to new investments because it could not predict which investments CREATE MORE would attract. He said the estimate included the negative revenue effect of enhanced deductions for registered business enterprises, whose deductions had been made more generous.

Fuel smuggling, maritime capability and official accountability: Ejercito cited a joint BIR-BOC fuel-marking report: of 421 stations inspected, 164, nearly 39%, failed confirmatory testing for unmarked or illicit fuel. He asked how millions of liters of tax-evaded fuel bypassed ports and whether equipment or vessels were lacking. Nepomuceno said imported petroleum was monitored at international ports, but BOC lacked the capability to stop "paihi" transfers at sea, where tankers transfer fuel and turn off transponders. He said BOC needed maritime capability and vessels; existing surveillance could identify ships slowing or disappearing but could not intercept them.

Asked whether customs officials had been punished in fuel-smuggling cases, Nepomuceno answered that none had yet been punished. He said he trusted staff but could not assume no one was involved, and that BOC monitored personnel with other agencies and welcomed joint enforcement.

Tax-administration reforms and investor concerns: Presiding Senator Joseph Victor "JV" G. Ejercito turned to the Bureau of Internal Revenue (BIR) and Commissioner Charlito Martin R. Mendoza, recalling reports of abuse in which he said more could be pocketed than remitted to government. He welcomed the reforms Mendoza had instituted and urged continued attention, noting that foreign investors, including Japanese investors, had also been subjected to abuse.

Scanner deployment and automated inspection selection: Ejercito asked whether BOC's planned scanners would reach most major ports or all ports to reduce intrusive physical inspections. Nepomuceno agreed and said staff had prepared a program and request. Asked how shipments were selected and whether officers could override the risk engine and whether overrides were audited, he said scanning selections were mainly system-generated through risk-management parameters, with yellow, orange, green and red categories. He did not explicitly answer whether officers could override the system or how overrides were audited.

Insurance and PhilHealth benefit coordination: Ejercito asked how the Insurance Commission (IC), which regulates health maintenance organizations (HMOs) and private health insurance, coordinates with the Philippine Health Insurance Corporation (PhilHealth). Insurance Commission Officer-in-Charge and Deputy Commissioner Ermar U. Benitez said the agencies had recently met and were preparing a memorandum of agreement (MOA) to layer benefits, with PhilHealth as the first layer and HMOs as the second. He said HMO premiums already take PhilHealth coverage into account in their rating system, addressing the concern about overlapping payments.

Asked whether the agencies regularly shared claims, utilization, healthcare-cost and coverage data, Benitez said they did not yet have a smooth mechanism. He committed to include data-sharing in the forthcoming MOA to improve industry monitoring.

Meat seizure, condemnation controls and legal threshold: Senator Joel Villanueva raised a report that chicken meat seized by the Bureau of Customs (BOC) was taken from a customs warehouse and nearly sold before being intercepted in Santa Maria, Bulacan. He asked whether people inside the system had enabled its removal and sought an account of the incident. BOC Commissioner Ariel F. Nepomuceno said it should not have happened and described weaknesses in how seized goods are condemned. Asked whether the incident could constitute economic sabotage, Nepomuceno said this case did not meet the threshold: he put the goods' value at PHP7 million, below the PHP10 million threshold. He said the Customs Modernization and Tariff Act (CMTA) could support a smuggling charge for infractions during destruction if proven.

He described a risk that seized goods might be salvaged and returned to the market; BOC had required body cameras and mobile CCTV at destruction sites, ordered responsible personnel to explain what happened, and relieved some officers. He said BOC would pursue charges if investigations proved infractions.

Customs digitization and remaining corruption: Senator Go tied auction transparency to his broader concern that corruption persists until processes are digitized. Nepomuceno described 15 information-technology projects, including a fully digital customs processing system, electronic submission of supporting records, data-based valuation, and an eventual public-private partnership; he said the partnership was still under technical discussion and the target was a pilot at selected ports next year. Senator Go expressed support for the digitization effort.

PhilHealth benefit limits and out-of-pocket burden: Senator Christopher Lawrence T. Go argued that the funds should support patients facing out-of-pocket costs. He recalled benefit changes made in December 2024, including an increase in the case rate for bypass surgery to about PHP 500,000, as he understood it. He said the 45-day confinement limit and single-period-of-confinement restriction within 90 days had been removed, and objected to the former 24-hour admission rule as requiring patients to pay for a room before coverage. These were Senator Go's account of the reforms and their motivation.

Travel tax and passport processing fees: Senator Go urged abolition of the travel tax, describing a PHP 1,620 charge for an economy-class passenger and PHP 6,480 for a family of four; he noted that overseas Filipino workers are exempt. Secretary Frederick D. Go said the Department of Finance had formally transmitted its support for abolishing the tax to the legislature, including the Senate.

Senator Go also asked that a proposed passport-processing fee increase from PHP 950 to PHP 1,500 be postponed, citing affordability for overseas Filipino workers and other applicants. Secretary Frederick D. Go qualified his answer: he had not spoken with the Department of Foreign Affairs (DFA) and did not know why the increase was proposed; he said efficiency improvements should reduce charges and promised to communicate with the Secretary of Foreign Affairs to see what could be done. Presiding Senator Joseph Victor "JV" G. Ejercito added that the concern was the cost of passport production and possible supply disruption, and said the committee had asked Foreign Affairs to resolve it.

Secretary Frederick D. Go also described fee-reduction steps: broker accreditation at the Bureau of Customs moved from annual renewal to every three years, with the equivalent fee reduced; at Land Bank of the Philippines (Land Bank), he said the Instapay/Banknet transaction charge fell from PHP 15 to PHP 8. He separately said the top 10 banks had stopped charging for digital transactions as of September.

Fuel taxes and electricity system-loss charges: Senator Go cited announced pump-price increases of PHP 4.88 per liter for gasoline and PHP 8.82 per liter for diesel, and renewed his call to suspend fuel excise taxes under Republic Act 12316 and consider temporary VAT relief for oil, electricity, and basic goods. Secretary Frederick D. Go said he had signed a resolution removing excise taxes on LPG and kerosene. For gasoline and diesel, he relayed the Development Budget Coordination Committee's view that removing taxes would disproportionately benefit heavier users and cost about PHP 12 billion in revenue each month; absent an offsetting revenue measure, the committee was not recommending suspension to the President. He cited targeted assistance to vulnerable groups, including drivers, farmers, and fisherfolk, as the alternative.

On electricity bills, Senator Go said system loss accounted for about 5 percent of monthly bills; using a PHP 4,000 monthly bill, he illustrated this as about PHP 200. He argued that paying customers should not bear losses from theft or illegal connections and cited bills to remove VAT on system-loss charges and bar utilities from passing those charges to customers. Secretary Frederick D. Go agreed that the Department of Finance and Bureau of Internal Revenue had removed VAT on system loss, but said energy policy responsibility rests with the Department of Energy and Energy Regulatory Commission.

MSME compliance and business registration: Senator Go asked how the Department of Finance and Bureau of Internal Revenue (BIR) were simplifying procedures and tax obligations for micro, small, and medium enterprises (MSMEs). BIR Commissioner Charlito Martin R. Mendoza described a one-time tax-abatement program for micro-taxpayers with annual gross sales not exceeding PHP 3 million. He said the BIR had received about 6,300 applications in two months, approved more than 5,000, and condoned over PHP 80 million in tax liabilities for a PHP 5,000 abatement payment. He also described the figure on a per-taxable-year basis. The BIR also simplified the income-tax return for micro and small taxpayers and removed mandatory audits for micro-taxpayers seeking to close; complete closure documents can be processed in three days.

Securities and Exchange Commission (SEC) Chairperson Francisco Ed Lim said registration fees had been reduced for MSMEs, citing discounts of 20 percent and 50 percent in his discussion of capital-market registrations. He described a proposal approved by the Secretary allowing registered businesses to begin operations while obtaining permits for 60 days. He also said the SEC had raised the threshold for audited financial statements from PHP 600,000 to PHP 3 million and applied deemed approval to qualifying business closures after three days for simple transactions, seven for moderate, or 20 for complex ones when delay was the SEC's fault and the company was compliant. Senator Go asked the finance officials to look into small businesses' remaining difficulty closing permits with local government units.

BIR audit safeguards and letters of authority: Senator Go raised complaints that letters of authority (LOAs) had been used repeatedly or abusively against taxpayers and asked what safeguards had changed. BIR Commissioner Charlito Martin R. Mendoza said the BIR had suspended audits for two months after complaints, reviewed procedures with business stakeholders, and issued new audit guidance and a revised audit manual. The reforms included a single audit per taxable year across tax types, ending separate VAT audits; priority audit selection shifted from regional directors to a system-assisted, risk-based process. He stressed that an LOA requests documents after initial red flags and is not a finding of liability; an audit can end without a deficiency.

Mendoza also described anonymized case assignment within regions, with taxpayer identity disclosed once an examiner and group supervisor were assigned. He acknowledged deployment delays as the new process was introduced. He said discrepancy discussions with taxpayers are recorded in meeting minutes before an assessment notice, and described a website LOA verifier where taxpayers can enter their tax identification number to check whether an LOA is legitimate. He acknowledged that abuse continued and was not fully eliminated, while saying complaints should be reported directly for action. Asked whether personnel had been investigated, Mendoza reported ongoing investigations, preliminary evaluations, formal charges, and administrative investigations.

DOF Secretary Frederick D. Go said the number of complaints reaching him had fallen under Mendoza's leadership, but confirmed that complaints about harassment or corruption still came in. He supported continuing reforms to make procedures simpler and faster.

Committee disposition: Senator Joseph Victor "JV" G. Ejercito asked the Department of Finance and attached agencies to submit responses to the remaining questions and documents for the plenary discussion. He then deemed the Department of Finance budget, including attached agencies and corporations, submitted for plenary consideration, subject to discussion and required documents, and suspended the briefing. The referral remained subject to plenary discussion and required documents.