Recto set to take over Finance dep’t

Recto set to take over Finance dep’t

By Kyle Aristophere T. Atienza, Reporter

FORMER Senator Ralph G. Recto, who pushed higher value-added taxes (VAT) in the Senate in the early 2000s, has been appointed Finance secretary, according to Senate President Juan Miguel F. Zubiri.

Mr. Recto, who was elected Batangas congressman in 2022 and served three six-year terms as a senator, is set to take his oath at the Presidential Palace on Friday, according to news reports quoting his wife, former Batangas lawmaker and actress Vilma Santos-Recto.

He will replace Benjamin E. Diokno, who served as central bank governor under the Duterte administration.

“In the Senate, we always regarded him as the resident numbers genius,” Mr. Zubri said in a statement as he welcomed the appointment of Mr. Recto.

“This was not just for his mathematical ability, but more importantly for his ability to immediately see the big picture implications of these numbers.”

Presidential Communications Office chief Cheloy Velicaria-Garafil confirmed Mr. Recto will take his oath as Finance secretary before President Ferdinand R. Marcos, Jr. on Friday. Also scheduled to take his oath is former Robinsons Land Corp. President and Chief Executive Officer Frederick D. Go, who was appointed Special Assistant to the President for Investment and Economic Affairs.

Mr. Recto and Mr. Diokno did not reply to requests for comment.

In an interview with Bloomberg TV on Monday, Mr. Diokno refused to comment on reports that he will be replaced.

“My relationship with the President is confidential and before making any announcement, I have to clear that with the President,” he said.

Mr. Recto was elected representative of the 6th district of Batangas in 1992 and served three terms. He was first elected to the Senate in 2001 at the age of 37, the youngest among his colleagues in the upper chamber at that time. There, he chaired the committees on Ways and Means and on Trade and Industry.

However, the grandson of the late Filipino statesman Claro M. Recto lost his Senate reelection bid in 2007 after pushing to raise the VAT by 2 points to 12%.

Then-president Gloria Macapagal-Arroyo appointed him as director-general of the National Economic and Development Authority in 2008 but left after one year.

He made a Senate comeback in 2010 and consecutively secured the seat in the following elections until 2022.

“More than most, he understands how to bridge the gap between the abstractions of mathematics and the very concrete realities that we face as a nation,” Mr. Zubiri said. “So, I have no doubt that he will be a good Finance secretary, who will continue to push the country along on the road to greater economic prosperity.”

House Ways and Means Chair Jose Maria Clemente S. Salceda said Mr. Recto’s longstanding relationship with the Congress would help.

“His experience and network will be crucial in enacting meaningful reforms to address the rising cost of living, create employment and expand our fiscal space,” he said in a Facebook Messenger chat.

Mr. Salceda noted that Mr. Recto was one of the authors of the 1997 Comprehensive Tax Reform Program during his tenure in the House.

“I am optimistic that key tax reforms pending in the Senate will also move faster with his appointment, due to his relationships in that chamber, as well as his ability to broker viable compromises,” the lawmaker said.

Mr. Recto’s appointment signals a “pivotal shift towards policies that are not only economically sound but also socially responsible and politically astute,” Terry L. Ridon, a former lawmaker and convenor of think tank InfraWatch PH, said in a Facebook Messenger chat.

He said Mr. Recto’s comprehensive background in both the Executive and Legislative branches of government empowers him to “bring a holistic perspective to economic policy.”

“Heading the government’s economic team in this time of economic turmoil and global unease requires a leader who has shown a track record for pursuing economic decisions that do not put the public at greater risk,” he added.

Gary Ador Dionisio, dean of the De La Salle – College of Saint Benilde School of Diplomacy and Governance, said the appointment of Mr. Recto shows there is dissatisfaction with the former Finance leadership and that Mr. Marcos wants to consolidate his own team.

“This will help President Marcos to pursue his new economic agenda under the leadership of Secretary Recto,” he said via Messenger chat. “Since Secretary Recto is also a long-time politician his political capital will be helpful to President Marcos in consolidating both his political and economic network.”

Philip Arnold P. Tuaño, dean of the Ateneo School of Government, said Mr. Recto would bring a policy perspective to the plans of the Finance department, “which is critical to the advancement of some of the proposed tax reforms which still need to be done.”

Mr. Tuaño said Mr. Recto would not be spared from questions on whether he might just last one year as Finance secretary to run for Senator in 2025, “similar to his NEDA director-general appointment in 2008 and his resignation to run for Senator in 2009.”

Assessing the performance of Mr. Recto’s predecessor, Mr. Ridon said Mr. Diokno had issued “cautionary statements” against suspending value-added and excise taxes on petroleum products, “standing in stark contrast to the urgent relief needed by the populace.”

“His insistence on the potential harm to the economy and government finances overlooks the immediate benefits such a suspension could provide, especially in light of the recent surge in fuel prices,” the policy analyst said.

He also recalled that Mr. Diokno opposed the implementation of a price cap on rice in September last year, with the outgoing secretary saying it was made without the input of economic advisors. The price cap order had also been opposed by Mr. Diokno’s colleagues at the University of the Philippines School of Economics.

“The biggest red flag that earned the ire of the public is Diokno’s repeated claim that the central bank has done enough to control inflation, despite the unabated price hikes and their impact on the average Filipino,” Mr. Ridon said.