BIR Commissioner Caesar Dulay, thank you very much for that inspiring message and thank you for recognizing the role of the DOF.
Actually, we have to be honest about this. Actually, nothing will happen, Billy, without you guys in the BIR doing it. So, I would like to pass on the credit largely to the BIR for all its achievements.
Finance Undersecretaries Antonette Tionko and Mark Joven; of course, BIR Commissioner Caesar Dulay; Mr. Lawrence Hardy II, Mission Director of the USAID Philippines; Mr. Orlando Vea, Founder and CEO of PayMaya Philippines; Mr. Winston Damarillo, Founder of the Developers Connect Philippines; Finalists of the Hack-A-Tax Innovation Challenge; my fellow workers in government; ladies and gentlemen.
It is a real honor to be in this virtual awarding ceremony for the Bureau of Internal Revenue’s Hack-A-Tax Innovation Challenge. This initiative is emblematic of the Bureau’s achievements in digital transformation and of how it seeks to continue to innovate to improve both tax administration and the taxpayer experience.
The BIR has improved internal processes, raised efficiency levels, and delivered much convenience to our clients–the taxpayers. The men and women of the BIR deserve to be congratulated for all that has been achieved so far. I am confident that more improvements are in store because the Bureau has also demonstrated the ambition and commitment that are key to any successful digitalization reform.
The administrative reforms undertaken by the BIR and the ongoing improvements in our revenue policies are beginning to pay off. We have brought up our tax effort from 13 percent of GDP in 2015 to 14.5 percent of GDP in 2019. The majority of our clients have opted for the electronic filing option in settling their tax obligations. The huge crowds jamming the BIR offices during payment deadlines is now a thing of the past — and not only because of this pandemic.
In fact, tax payments from electronic channels reached 1.8 trillion pesos in 2019, representing 84 percent of the total BIR collections for the year. Payments collected through additional electronic channels targeted for small businesses and individual taxpayers amounted to 1.2 billion pesos in 2019, a 94 percent increase from the previous year.
Thanks in large part to our strong revenue performance in the preceding year, we were in a very good fiscal position by the time the COVID-19 pandemic hit us. The experience of dealing with this contagion will definitely hasten our digitalization in many aspects of our national life. The Philippine government is gearing up for this.
While we expect lower revenue collections this year because of all the economic devastation brought about by the global health crisis, we are supported by strong macroeconomic fundamentals and we look forward to returning to the path of high growth when this emergency is over. The increased use of digital technologies will help us bounce back faster and stronger.
The BIR is well prepared for the new normal. The digital transformation process the BIR has set into motion serves as a standard for all other agencies in government to emulate.
In line with this, let me congratulate the participants and the winners of the Hack-A-Tax Innovation Challenge. In the coming years, we will look back to this initiative as an important leap in the use of web-based and mobile apps in making the filing of returns and payment of taxes more efficient and convenient. The taxes that BIR collects are critical to fueling our economic recovery. These will help fund our massive infrastructure investments that will create jobs for our people and increase spending on education and health care to improve the competitiveness of our workforce.
I thank our private sector partners — PayMaya, the Developers Connect Philippines, and of course, the U.S. Agency for International Development Philippines — for bringing the technical expertise and technology to make this initiative the success it has become. I want to mention especially the Developers Connect Philippines for sharing its expertise and resources during these most trying times. I am aware of how you have extended assistance to the Philippine government during this pandemic, by coming up with the Rapid Pass system and the Relief Agad online platform.
I enjoin all of you to continue co-creating solutions with us as we transform and improve service delivery, and recover from this pandemic as one nation.
Thank you very much.