Recto should also push for lowering the cost of electricity, since high power rates is among the deterrents to attracting more foreign investments into the country
We’ve read nothing but praise from leaders in both the public and private sectors for the choice of Ralph Recto as Finance Secretary.
The positive reactions are based on his performance as lawmaker in the two chambers of Congress and as Director General of the National Economic and Development Authority (NEDA).
But as they say, the proof of the pudding is in the eating.
That means Recto must be able to implement the road map of the Marcos Jr. administration as embodied in the Philippine Development Plan 2023-2028.
He must be able to achieve the two key objectives of the PDP: one, to elevate the status of the Philippines as a upper middle-income country; and two, to bring down poverty incidence to single-digit level, both by 2028.
Can Secretary Recto achieve these goals within a very limited time frame? That’s the big challenge because he has only four-and-a-half years to do so. Can he hack it?
While he has the full support of his former colleagues in government, friends and supporters in the private sector, Recto must hit the ground running.
President Marcos Jr.’s marching orders to Recto as Finance Secretary are clear-cut.
Recto should see to it that the economy stays on the path of growth, meet and even surpass the medium-term fiscal target, and achieve developmental goals.
Moreover, his economic team should strive to create an environment that encourages investment, stimulates economic opportunities and uplifts the lives of every Filipino.
There’s more. Recto should also ensure the efficient and effective spending of taxpayer money, and devise strategies to tame inflation by plugging supply gaps and coming up with measures to stabilize prices.
The Chief Executive also urged Recto to “stand at the forefront of the anti-smuggling drive, pursue tax cheats, starting with the habitual ones who have raised tax evasion not just to an art but into a business.”
There are other things he should also do to meet high expectations from him in the years ahead.
He should be able to sustain GDP growth at between 6.5 percent to eight percent annually from 2024 to 2028 to accelerate economic development.
Upon assuming the Finance portfolio, Recto said his main priority would be to raise P4.3 trillion in revenues this year. The Bureau of Internal Revenue should be able to collect P3 trillion, the Bureau of Customs, P1 trillion and the National Treasury P300 billion.
The Treasury’s income would come from, among others, dividends from government corporations and from government’s share in airport operations and the Philippine Amusement and Gaming Corp.
Recto should also raise revenues from other sources.
There are priority revenue measures that either need to be passed by Congress or implemented as soon as possible, such as the Comprehensive Tax Reform Package Package 3 or the Real Property Valuation Reform Act; CTRP Package 4 or the Passive Income and Financial Intermediary Taxation Act; and the VAT on Digital Service Providers.
There’s also the Mining Fiscal Regime Act that seeks to impose a 4-percent royalty on the gross output of mining operations within mining reservations.
The former lawmaker should also prioritize the implementation of the Public-Private Partnership Law as he himself believes this will free up resources for social services and investments that will create more jobs for the country’s labor force.
The Maharlika Investment Fund will help reduce public spending on major infrastructure projects.
The Ease of Paying Taxes Act will provide for a uniform and simplified documentation of transactions subject to the value-added tax.
The Finance department should also reduce the huge public debt so that more resources can be used to fund vital public infrastructure and the delivery of basic social serves such as education and health to those who really it.
Recto should also push for lowering the cost of electricity, since high power rates is among the deterrents to attracting more foreign investments into the country.
Moreover, the new Finance chief should take decisive steps against graft and corruption.
He should order all national government agencies, LGUs, government-owned and controlled corporations, government financial institutions, and other government instrumentalities to make an annual public disclosure of contingent liabilities they have incurred as part of their responsibility to ensure transparency and accountability as hallmarks of good governance.
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