Recto introduces growth-enhancing roadmap in his first 100 days in office

BY ONLINE BALITA NEWS

Finance Secretary Ralph G. Recto has hit the ground running towards an inclusive future that benefits all Filipinos by introducing growth-enhancing strategies in the government’s economic roadmap during his first 100 days in office.

“The President has entrusted me with the monumental task of delivering an economy that is inclusive and sustainable––one that works for the betterment of every Filipino and the future generations to come. I therefore made it my priority to recalibrate our fiscal targets to make sure that strategic growth-enhancing fiscal consolidation is being pursued,” he said.

“My first 100 days in office already felt like a year but I am very fortunate to be surrounded by highly talented and competent individuals within the DOF who all help me ensure that we achieve genuine economic transformation for our people,” he added.

Together with the Development Budget Coordination Committee (DBCC) economic managers, Recto has recently recalibrated the government’s medium-term macroeconomic assumptions, fiscal program, and growth targets for 2024 to 2028 to reflect both domestic and global developments.

“These are more realistic targets that respond more directly to the needs of the Filipino people,” he stressed.

Specifically, the country is expected to expand by 6.0% to 7.0% in 2024, even higher at 6.5% to 7.5% percent in 2025, and up to 6.5% to 8.0% for 2026 to 2028.

Over the medium term, the government’s revenue performance will continuously increase from PHP 4.27 trillion (16.1% of GDP) in 2024 to PHP 6.08 trillion (16.4% of GDP) in 2028.

Based on this outlook, the fiscal deficit will decrease in a sustainable and strategically paced manner under this administration, reaching 5.6% of GDP in 2024 to only 3.7% in 2028.

At the same time, the economy will continue to outgrow the country’s debt in the medium term with the debt-to-GDP ratio further declining from 60.3% in 2024 to 55.9% in 2028.

To achieve these targets, Recto said his first order of business is to collect PHP 4.3 trillion in revenues this year.

Upon assuming office, the Finance chief immediately convened Commissioners Romeo Lumagui, Jr. and Bienvenido Y. Rubio to improve the Bureau of Internal Revenue (BIR) and the Bureau of Customs’ (BOC) revenue administration efficiency by ensuring ease of paying taxes and accelerating their respective digitalization programs.

The BIR was able to collect PHP 591.8 billion in the first quarter of 2024, 17.15% (PHP 86.6 billion) higher than the PHP 505.2 billion it generated in the same period in 2023.

On the other hand, the BOC raised PHP 218.9 billion during the same period, outperforming last year’s collections of PHP 213.8 billion by 2.35% (PHP 5.0 billion).

Recto was able to secure commitments from both the World Bank Group (WBG) and Asian Development Bank (ADB) to support the Philippine government’s goal of fully digitalizing the tax system to improve revenue generation.

To broaden the tax base, Recto has also refined the existing priority revenue measures of the Department of Finance (DOF) during his first week in office.

Under Recto’s leadership, the DOF will not pursue any new tax proposals that would unnecessarily burden Filipino consumers and taxpayers.

Instead, he has fine-tuned existing priority revenue measures to guarantee that these are fairer, easier to collect, and more practical.

Among these priority measures are the Value-added Tax (VAT) on nonresident Digital Service Providers (DSP); the Imposition of Excise Tax on Single-use Plastics (SUPs); Package 4 of the Comprehensive Tax Reform Program (CTRP); the Rationalization of the Mining Fiscal Regime; and the Reform on the Motor Vehicle Users’ Charge (MVUC).

Meanwhile, the Finance Chief also placed greater emphasis on improving non-tax revenue collections to generate more funding for the Marcos, Jr. administration’s priority infrastructure and socio-development projects.

Recto has increased the dividend rate remittance of the government-owned or -controlled corporations’ (GOCCs) from their net earnings for 2023 from the minimum of 50%, as mandated in Republic Act (RA) No. 7656, to 75%.

As of April 24, 2024, dividend collections from GOCCs already amounted to PHP 39.8 billion, representing a fivefold increase from the PHP 8.0 billion recorded during the same period last year.

Likewise the secretary signed the Department Circular 003-2024 on February 27, 2024 which provides the guidelines to implement the Special Provisions of the 2024 General Appropriations Act (GAA).