MANILA -- The Asian Development Bank (ADB) is loaning the Philippines $400 million to boost tax collection.

In a statement, the ADB said the Domestic Resource Mobilization (DRM) Program Subprogram 1 helps the Philippines improve tax compliance, reduce tax avoidance, and raise more revenues from activities and products that have a major impact on the environment or contribute to climate change.

Under the DRM Program, the Philippines hopes to modernize the Bureau of Internal Revenue (BIR) by offering services like online tax registration, return filing, and payment.

This can potentially increase the ratio of actual tax revenues to tax potential, from 75 percent in 2020 to at least 85 percent by 2026, the ADB said.

The Philippines wants to raise its tax-to-gross domestic product (GDP) ratio from 15 percent in 2020 to at least 15.9 percent by 2026, according to the Philippine Development Plan 2023-2028.

The country’s Asia-Pacific neighbors have a tax-to-GDP ratio of 17.6 percent, ADB noted.

Earlier this year, the ADB also loaned the Philippines $303 million loan to upgrade and construct flood protection infrastructure in 3 major river basins, and another $300 million to boost financial inclusion.

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