Recto’s main priority: Raise P 4.3T in revenues
He said Diokno felt it was time for him to return “to his natural habitat.”
In a statement on Friday, Diokno said: “I am proud knowing that I will be leaving my post at a time when the Philippine economy, in general, and the DOF, in particular, are in a better state of affairs than when I inherited them,” he added.
When he took the finance portfolio, Diokno had to tackle a heavy debt-load following the Duterte administration’s borrowing spree to fund a costly pandemic response.
By the end of 2022, the debt-to-gross domestic product (GDP) ratio, a closely watched indicator of the government’s ability to settle its obligations, stood at 60.9 percent, above the 60-percent threshold deemed manageable for developing economies like the Philippines.
New tax measuresA huge debt pile risks diverting government funds from more productive spending that can power up the economy to debt payments. But the latest Treasury data showed the debt-to-GDP ratio improved to 60.2 percent as of the third quarter of last year.To cut debts faster, the DOF under Diokno wanted Mr. Marcos to press Congress to hasten approval of new tax measures, such as Package 4 of the Comprehensive Tax Reform Program; the value-added rax (VAT) on digital service providers; excise on single-use plastic bags; and excise on sweetened beverages and junk food.
The DOF was also pushing for the passage of Package 3, or the Real Property Valuation and Assessment Reform (RPVAR), and the VAT refund for foreign tourists.
These revenue measures are still in the legislative mill for over a year now as the Marcos administration prioritized the legislation creating the MIF, which received presidential certification for urgent passage.
Biz groups’ support
Several local business groups and foreign chambers on Friday expressed support for Recto’s appointment.These include the Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business organization, Philippine Retailers Association and the export-oriented Foreign Buyers Association of the Philippines (Fobap).PCCI president Enunina Mangio said Recto was “perfectly suited for the job.”
“He has the experience, expertise and political backing that are critical if he is to oversee the strengthening of the country’s economic and fiscal positions,” Mangio said in a statement.
Fobap president Robert Young said Recto had shown determination to implement a measure that was necessary despite being unpopular, referring to the expanded VAT law that the new finance secretary had pushed nearly two decades ago.
MBC’s pledge
The Makati Business Club (MBC) pledged assistance to Recto in his new role of improving laws and policies to attract “job-creating investment and expansion.”The Bankers’ Association of the Philippines (BAP) said Recto is “equipped with the necessary experience to promote Philippine economic growth.”
“As head of the Marcos administration’s economic team, Secretary Recto will play a critical role in the reformation of fiscal and economic policies, together with balancing political realities,” BAP said.
The British Chamber of Commerce of the Philippines and the American Chamber of Commerce of the Philippines, Inc. were the first foreign chambers to issue congratulatory statements to Recto.
His former colleagues in the Senate heaped praises on Recto, among them Senators Juan Edgardo Angara, Lito Lapid and Loren Legarda, who said she would cosponsor his confirmation in the Commission on Appointments.
Former Senate President Franklin Drilon said Recto’s experience as Neda chief and legislating fiscal policies would help him come up with better economic strategies.
“Recto is unquestionably the ideal choice to lead this endeavor,” Drilon said. —WITH REPORTS FROM ALDEN MONZON AND MARLON RAMOS INQ
