The Facilitating Public Investment (FPI) Project is a $15.3 million five-year project that works with the Government of the Philippines in addressing tax revenue inefficiencies, tax evasion issues and public spending bottlenecks, to enable the supply of public goods and services necessary to spur private investments.

FPI is a USAID/Philippines project under the Partnership for Growth (PFG), a bilateral initiative. The PFG represents a partnership between the Philippines and the United States to promote broad-based and inclusive growth. Through the project, the U.S. Government is supporting the fiscal and budgetary reforms spearheaded by the Department of Budget and Management (DBM), Department of Finance and its two key bureaus, Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC). USG is also engaging other government institutions, such as the Securities and Exchange Commission (SEC), both Houses of Congress,  the private sector, civil society, and academia to help improve fiscal governance in the country.

ACTIVITIES

The project aims to help increase the country’s fiscal resources through the following technical assistance activities: (a) comprehensive review and analysis of the effectiveness of the existing tax regime; (b) support for the expanded use of e-filing and e-payment to improve the effectiveness and cost efficiency of tax administration; (c) support for innovative fiscal policy and budgetary reforms, including fiscal transparency; (d) development of improved risk management practices supported by the integration of tax- related government databases and the development of a customs value database; (e) development of relevant key performance indicators for tax administration; and (f) support for institutional capacity strengthening in DOF-Fiscal Intelligence Unit (FIU), BIR and DBM.

Part of FPI’s package of technical assistance includes support for GPH’s Good Governance Anti-Corruption Cluster initiatives and the country’s commitments to the Open Government Partnership (OGP).

The OGP is an international initiative launched in 2011 that provides an international platform for domestic reformers who are committed to making their governments more open, accountable and responsive to citizens.

Recently, USAID/Philippines expanded its efforts to promote fiscal transparency by supporting civil society organization engagement in the implementation of the Philippines’ Extractive Industries Transparency Initiative (EITI). The EITI is a global standard to promote open and accountable management of natural resources.  It seeks to strengthen government and company systems, inform public debate, and enhance trust among players in the extractive industry. The EITI is one of the commitments under the country’s current OGP action plan.

RESULTS

The project assisted the Bureau of Internal Revenue (BIR) with the upgrading of its e-filing systems that resulted in a three-fold increase in the number of tax returns e-filed, from 1.5 million in 2013 to approximately 6 million as of August 2015, representing about 30% of all expected tax returns, and 60-70% of tax revenues expected to be received through e-filing by the end of 2015. 

FPI also provided technical assistance to DBM in reengineering and streamlining its key internal business processes, including the management and release of lump-sum funds, budget preparation, signature authority, and organizational set-up and staffing.  In the proposed 2016 national government budget, the miscellaneous personnel and benefits fund, a personnel-related lump-sum fund, was significantly reduced by 18% or $500  million, which means that such amount will be freed up from potential in-year budget adjustments or discretionary spending by the executive.  

Through the project, USAID/Philippines continues to support OGP implementation in the Philippines. Recently, FPI supported the development of the Philippines-OGP third country action plan, as well as the GGAC website through which the country's OGP Commitments will be monitored.The project also supported the participation of the Philippine contingent to the OGP global summit in Mexico in October 2015.

GOAL

To support the expansion of public and private investments in the Philippines through higher tax revenues, improved public expenditure management and greater fiscal transparency.

OBJECTIVES

• Expand the tax base
• Minimize revenue loss
• Improve expenditure management and fiscal transparency