MANILA – Finance Secretary Ralph Recto announced that the World Bank Group (WBG) has pledged to help enhance the agricultural sector and human capital development in the Philippines.

In a statement released on Thursday (24 Oct 2024), the Department of Finance (DOF) reported that this commitment was made during a high-level dialogue with key WBG officials in Washington, D.C., on October 22.

The meeting was held on the sidelines of the World Bank – International Monetary Fund Annual Meetings taking place from October 22 to 25.

Led by Manuela Ferro, the Regional Vice President for East Asia and the Pacific, the WBG expressed its commitment to continue supporting initiatives aimed at increasing the productivity and income of Filipino farmers. The organization also pledged to assist in modernizing the agriculture sector, making it more commercially viable and export oriented.

Secretary Recto welcomed the bank’s support, emphasizing that expanding the agricultural sector could further alleviate inflation and stimulate economic growth.

In addition to agricultural support, the WBG reiterated its commitment to the Philippines’ human capital development, particularly in education.

The World Bank acknowledged that investor confidence in the Philippines remains robust, bolstered by ongoing business-friendly reforms.

Recto highlighted the Philippines’ potential to integrate into the global supply chain for high-value manufacturing, particularly in the semiconductor industry. He also urged the World Bank to enhance its assistance in strengthening cybersecurity and provide grants and technical aid for project preparation to improve the execution of WBG-funded projects.

Moreover, Recto called for increased concessional financing from the WBG.

In response, the World Bank announced that its Board recently approved new measures, including grace periods for commitment fees and the elimination of prepayment premiums. Additionally, discussions are underway regarding another pricing reform package aimed at reducing borrowing costs further.

The DOF stated that the World Bank has assured that the Philippine government’s priorities will be integrated into the new Philippine Country Partnership Framework for 2025 to 2028.

As of June, the World Bank’s International Bank for Reconstruction and Development (IBRD) is the Philippines’ third-largest official development assistance (ODA) partner, with total ODA amounting to USD 8.84 billion, accounting for 18.8 percent of the Philippines’ total ODA.

Recto was accompanied by Agriculture Secretary Francisco Tiu Laurel Jr., Finance Undersecretary Domini Velasquez, and National Treasurer Sharon Almanza, along with WBG officials including Vice President for Infrastructure Guangzhe Chen and Country Director for the Philippines, Malaysia, and Brunei Zafer Mustafaoğlu, among others.

ia/mnm

By Liza Soriano

MANILA — The Commission on Appointments has confirmed the appointment of Ralph Recto as Secretary of the Department of Finance (DOF) on Wednesday (13 March 2024).

No one has objected to Recto’s appointment.

Senator Ramon Revilla Jr. endorsed Recto after a short panel deliberations.

“With him at the helm, we know that the Department of Finance is in good hands,” Revilla said.

“Through his great attention to detail and relentless pursuit of the greater good, many of the measures that this institution has produced have been cultivated and refined for the nation,” he added.

President Ferdinand “Bongbong” Marcos Jr. named Recto Finance chief in January, replacing Benjamin Diokno.

(el Amigo/MNM)

MANILA – The Maharlika Investment Corp. (MIC) is poised to seek Associate Membership within the International Forum of Sovereign Wealth Funds (IFSWF) to bolster transparency and enhance governance practices.

According to a statement released on Friday by the Department of Finance (DOF), the proposal to pursue membership in the IFSWF gained approval during the fourth MIC board meeting chaired by MIC’s head, Finance Secretary Ralph Recto, on Feb. 29.

The IFSWF stands as a voluntary coalition of sovereign wealth funds worldwide, dedicated to fostering collaboration, conducting research, and undertaking self-assessment to reinforce the community’s cohesion.

The organization is tasked with aiding its members in implementing the Santiago Principles, a set of widely accepted norms and procedures designed to ensure the efficient functioning of sovereign wealth funds on a global scale.

The Maharlika Investment Fund Act of 2023 mandates MIC and the Maharlika Investment Fund (MIF) to adhere to the Santiago Principles.

Typically, Associate Membership in the IFSWF is granted for a period of three years, primarily intended for institutions in the early stages of establishing their sovereign funds.

The DOF further stated that the MIC board approved the designation of MIC President and CEO Rafael Jose Consing Jr., MIC Regular Director Vicky Castillo L. Tan, and Independent Director German Q. Lichauco II as the corporation’s representatives to the IFSWF.

Among those in attendance during the fourth board meeting were Tan, MIC Independent Directors Lichauco, Andrew Jerome Gan, and Roman Felipe Reyes, LBP PCEO Lynette Ortiz, and DBP PCEO Michael de Jesus.

The MIC’s advisory body, represented by Officer in Charge Treasurer Sharon Almanza, was also present during the meeting.

(el Amigo/MNNM)

By el Amigo

MANILA — In a report released on Wednesday (31 Jan 2024), the Bureau of the Treasury revealed that the national government’s outstanding debt reached a historic high of P14.62 trillion in 2023, reflecting an increase of P1.2 trillion from the previous year.

Despite the surge, the debt-to-gross domestic product (GDP) ratio showed improvement, dropping to 60.2 percent from 60.9 percent in 2022, and staying below the targeted 61.2 percent in the medium-term fiscal framework. This aligns with the government’s efforts to enhance debt sustainability.

Recto confident

Finance Secretary Ralph Recto expressed confidence, stating, “Our debt remains at a very manageable level, and we are on track to bringing down the debt-to-GDP ratio to less than 60 percent by 2025.” The government aims for a debt-to-GDP ratio of less than 60 percent by 2025 and 51.1 percent by 2028.

Breaking down the figures, the national government’s domestic debt amounted to P10.02 trillion, showing a marginal decrease from the end-November level due to the net redemption of government securities. Meanwhile, external debt reached P4.60 trillion, with a 2.54 percent increase from the previous month.

The year-on-year comparison indicated an 8.79 percent rise in domestic debt and a 9.21 percent increase in external debt, which comprised 68.5 percent and 31.5 percent of the total debt, respectively.

The government’s guaranteed obligations decreased by 1.05 percent to P349.44 billion month-on-month, attributed to the net repayment of domestic guarantees. The total guaranteed debt fell by 12.43 percent year on year.

Looking ahead, Rizal Commercial Banking Corp. chief economist Michael Ricafort anticipated further increases in outstanding debt, citing planned borrowings, including the issuance of peso-denominated retail Treasury bonds in the first quarter of 2024. The government plans to borrow P2.46 trillion this year, with 75 percent from domestic sources and 25 percent from abroad. Ricafort emphasized that continued budget deficits, while narrower than the previous year, could still lead to additional borrowings by the national government.

(AI/MNM)

By Junex Doronio

MANILA — Reneging on his promise, newly-appointed Finance Secretary Ralph Recto is eyeing to adjust the tax rates on passive income.

Recto had earlier said there would be no new taxes this year but now the Department of Finance (DOF) is proposing harmonizing the tax on dividends with the tax on interest income by increasing the tax rate on dividend income from 10 percent to 15 percent.

In a statement, Recto explained that this would bring in an estimated additional P12.2 billion in revenues from 2024 to 2028.

It was learned that under the proposed Passive Income and Financial Intermediary Taxation Act (PIFITA) the tax rate on interest income will be gradually reduced from 20 percent to 19 percent in 2024, 18 percent in 2025, 17 percent in 2026, 16 percent in 2027, and 15 percent in 2028.

The other priority measures of the DOF under Recto’s leadership are the Value-added Tax (VAT) on digital service providers, the imposition of excise tax on single-use plastics, the rationalization of the mining fiscal regime, and the reform of the motor vehicle users’ charge.

(el Amigo/MNM)

MANILA — In a recent briefing at the Bureau of Customs in Manila, Department of Finance (DOF) Secretary Ralph Recto announced that the government is committed to meeting its revenue target for the year without resorting to new taxes.

The emphasis will instead be on enhancing the collection efficiency of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC).

Acknowledging the challenge of reaching the PHP4.3 trillion revenue target for 2024, Recto highlighted the pivotal role of the BIR, responsible for generating PHP3.05 trillion, and the BOC, expected to collect nearly PHP1 trillion. The Bureau of the Treasury is anticipated to contribute approximately PHP300 billion to the overall target.

Recto stated, “Recognizing the current economic challenges, we must not rely solely on imposing new or additional taxes.” He reassured the public that, at present, there are no plans to introduce new taxes, emphasizing the importance of optimizing the collection of existing taxes.

While expressing support for some earlier tax reform proposals, Recto noted that the DOF is refining these suggestions, considering the current inflationary environment. He cited the example of the road users tax bill, indicating a need to temper certain proposals to avoid exacerbating inflation and negatively impacting motorists.

Recto highlighted ongoing efforts to collaborate with the BIR and BOC, urging them to focus on facilitating tax payment and eliminating trade barriers. He emphasized the importance of swiftly implementing the Ease of Paying Taxes Act, pursuing tax cheats, and ensuring fair tax compliance.

To enhance trade facilitation and combat smuggling, Recto announced a collaboration with the Office of the Special Assistant to the President for Investment and Economic Affairs to implement an integrated system for pre-border verification and invoicing.

Recto reassured the public about the manageability of the country’s debt, currently standing at PHP14.5 trillion or approximately 60% of the gross domestic product (GDP). He expressed confidence that the debt-to-GDP ratio would be reduced to 51% by 2028 through a combination of raising revenue and fostering economic growth.

The refined tax proposals will be presented to the Legislative Executive Development Advisory Council and subsequently submitted to the Senate for consideration. Notably, the earlier proposal to tax sweetened beverages and junk foods has already been scrapped by the DOF.

(el Amigo/MNM)

By Junex Doronio

MANILA — With the announcement of newly-appointed Finance Secretary Ralph Recto that he would prioritize the collection of taxes for the country’s coffers, reshuffle rumors once again rocked the Bureau of Customs (BOC).

Customs insiders told Maharlika NuMedia that Recto should look into the hold-over appointees of former President Rodrigo Roa Duterte holding top positions at the BOC.

They said the “Duterte appointees” should have resigned irrevocably out of delicadeza when the new administration of President Ferdinand “Bongbong” Marcos Jr. took over the reins of government.

‘Number one is to collect for next year, I think P4.3 trillion in taxes, P3 trillion with the BIR, P1 trillion with the BOC and I think the Treasury has P300 million, it’s all about fiscal sustainability,” Recto said at a Palace press briefing on Friday (12 January 2024).

Some Customs brokers, however, said the new Finance chief should also look into the “high duties and taxes” that tend to discourage importers.

”So every night, when I wake up in the morning, dapat ang nakolekta natin more or less P20 billion to fund all the needs of our people, the requirements of the government and to make sure that the money is spent wisely,” Recto quipped.

(el Amigo/MNM)

MANILA — In an announcement on Thursday, actress and former congresswoman Vilma Santos-Recto shared that Deputy Speaker and Batangas Sixth District Rep. Ralph Recto is scheduled to take the oath as the new Finance Secretary on Friday, January 12.

The swearing-in ceremony will be conducted by President Ferdinand “Bongbong” Marcos Jr.

Santos-Recto expressed confidence in her husband’s abilities, citing his expertise as a respected economist.

The appointment comes as Recto prepares to succeed the outgoing Finance Secretary, Benjamin Diokno, who served in the Marcos administration for nearly 19 months.

Despite ongoing speculation, both Finance officials and Recto have maintained a tight-lipped approach regarding the appointment.

(el Amigo/MNM)

By Junex Doronio

MANILA — “It ain’t over till the fat lady sings”, so it seems for Finance Secretary Benjamin E. Diokno who said on Thursday that he serves at the pleasure of President Ferdinand R. Marcos Jr. amid rumors that Batangas 6th District Congressman Ralph Recto is set to replace him.

“I serve at the pleasure of the president. I will work until, as long as I’m needed in the government,” Diokno quipped when asked if he is about to retire from government service.

Diokno previously served as Secretary of Budget and Management under the administration of President Rodrigo Roa Duterte from 2016 to 2019, and under President Joseph “Erap” Estrada from 1998 until the latter’s ouster in 2001.

He also served as the governor of the Bangko Sentral ng Pilipinas (BSP) and ex officio chairman of the Anti-Money Laundering Council from 2019 to 2022 under Duterte.

For investment banker Stephen Cuunjieng, he believes that Recto has what it takes to be a successful Finance Secretary.

“Do I think he could be a very effective Finance Secretary? Yes, he has the ingredients to do it,” Cuunjieng declared when interviewed by ANC.

Cuunjieng said the former senator who now represents the 6th district of Batangas “is qualified and he would fit the model of a successful politician-finance secretary.

The investment banker stressed that a good finance minister needs to understand that government financial issues are not simply limited to finance.

He added that the finance chief must also appreciate that there are social and political ramifications to financial and economic policies.

(AI/MNM)

By Liezelle Soriano

MANILA — House Deputy Speaker Ralph Recto has disavowed any knowledge of rumors suggesting his candidacy for the position of Finance Secretary.

“I have no idea. I cannot comment on that. That’s for the President to decide,” Recto stated when asked by House reporters.

When questioned about whether President Ferdinand Marcos “Bongbong” Marcos Jr. had extended the offer, Recto redirected focus to the 2024 national budget.

The bicameral conference committee recently convened for a hearing on the proposed P5.7 trillion national budget for 2024.

Rumors about Recto’s potential appointment began circulating when he accompanied the President to the United States for the 30th Asia Pacific Economic Cooperation (APEC) Leaders’ Summit.

The APEC CEO Summit annually brings together the region’s leading CEOs.

(ai/mnm)

By Junex Doronio

ACTION SPEAKS LOUDER THAN WORDS, so the adage goes, and with House Deputy Speaker and Batangas 6th district Rep. Ralph Recto joining President Ferdinand R. Marcos Jr.’s visit to the United States this week, rumors swirled that this Batangueño lawmaker will be tapped as top honcho of the Department of Finance.

On the other hand, Finance Secretary Benjamin E. Diokno will likely fill up the one slot left unfilled in the Monetary Board, the highest policymaking body of the Bangko Sentral ng Pilipinas (BSP).

It was the first time that Recto, who ironically campaigned for Isko Moreno in the last presidential elections, accompanied PBBM in his latest foreign travel.

Political pundits told Maharlika NuMedia that Marcos Jr. seems to imitate his late father who would always gather “the best and the brightest” in the Cabinet.

The husband of Star for All Seasons Vilma Santos deserves to be the finance chief, the same analysts said.

They cited Recto, who holds a Bachelor’s degree in Commerce major in Business Management from De La Salle University, also earned his master’s degree units in public administration from the University of the Philippines.

He took up a leadership course at Harvard University’s John F. Kennedy School of Government and is also a candidate for a Master’s degree in strategic business economics at the University of Asia and the Pacific.

(AI/MNM)