The government will exhaust its power to ensure that future generations of Filipinos do not inherit the challenges of today, according to Finance Secretary Ralph Recto.
“Allow me to thank all of you for your dedication to truth and for providing proper context that enables our people to fully appreciate the long-term gains of our actions,” Recto said during his keynote speech at the Economic Journalists Association of the Philippines-San Miguel Corp. Economic Forum on July 8, 2024.
“At the core of every policy and every choice is a steadfast commitment and a delicate balancing act. We will do everything within our power to ensure that the next generation of Filipinos does not inherit today’s challenges,” Recto said at the forum, which had the theme, “Future-Proofing the Philippine Economy: Strategies and Policies.”
He said that to ensure food security, a top priority of President Ferdinand Marcos Jr., the government is sparing no effort to address the current rice-driven inflation caused by global price increases.
“Our mandate is clear: We must act swiftly to alleviate this burden that disproportionately affects the vulnerable population,” he said.
By reducing the tariff on imported rice to 15 percent from 35 percent, retail rice prices could drop by an average of 10 percent or P5 per kilogram for the rest of the year, he said. This move could lower the price of rice to below P50 as early as August, reducing the overall inflation rate for the year by an average of 18 percentage points, or 3.3 percent from 3.5 percent.
“And while this could entail revenue losses for the government amounting to P9.2 billion for the rest of 2024, in the bigger picture, this improves the welfare of households, especially the poor,” Recto said.
“A sustained high price of rice could continue to drive inflation, delaying the reduction of policy interest rates by the Bangko Sentral ng Pilipinas and derailing the country’s economic growth trajectory,” he said.
Recto assured that this is only a short-term solution that works in tandem with the government’s long-term goal of boosting the country’s agricultural production through a planned increase in the Rice Competitiveness Enhancement Fund and higher investments in the agriculture sector.
Recto also said the recalibration of the country’s growth and fiscal goals is part of the government’s proactive steps to future-proof the economy, ensuring that its targets are attainable, realistic, adaptive to external challenges, and supportive of sustainable growth.
“Since fiscal goals are anchored to growth targets, setting high GDP targets amid external headwinds risks a revenue shortfall. This would strain our deficit and potentially increase borrowing,” he said.
“But tempering these targets does not diminish our commitment to fiscal consolidation. Instead, it reflects a confident and conservative approach to fiscal policy-making,” he said.
Over the medium term, the DOF anticipates a 10.3-percent average annual growth in total revenues to support the Filipino people’s growing needs, reaching P4.27 trillion in 2024 and P6.25 trillion by 2028.
This robust growth will be supported by enhancing the administrative efficiency of the Bureau of Internal Revenue and the Bureau of Customs through digitalization and plugging leakages in the tax system, especially from e-commerce.
While no new tax proposals are on the table, refined revenue reforms await congressional approval that could inject an average of P42 billion annually into the nation’s coffers beginning in 2025.
Recto said every peso would be stretched to deliver a bigger bang per buck, ensuring sustainable funding for the nation’s HEARTS (Health; Education; Agriculture; Roads and Infrastructure; Technology; and Security and Social Protection).
He also highlighted the government’s stronger collaboration with the private sector as part of its efforts to expedite infrastructure projects and service delivery nationwide.
“We will soon witness and experience the results of every effort, every policy decision, and every investment commitment we have secured. All these are designed to ensure a more comfortable life for all, lifting 14 million Filipinos out of poverty by the end of the president’s term,” Recto said.
“It will be an economy with a more secure base of food production, a more efficient logistics backbone, and a more responsive healthcare system,” he said. “It will be a Bagong Pilipinas that every Filipino rightfully deserves—one that the next generation will proudly inherit.”
