MANILA - The Philippines will not be imposing new taxes until next year, Finance Secretary Ralph Rector said on Wednesday as the Commission on Appointments (CA) confirmed him as the country's Finance chief.

Recto told the CA finance committee that the government is pursuing only tax measures that “are already in the advance stages in Congress” and made the assurance that there will be no new tax measures until at least next year.

“Only those that are already in the advance stages in Congress… so we are only pursuing the six measures that are here already in Congress,” Recto told reporters.

He reiterated that the agency is not proposing any new taxes and will only push "only what is on the table.”

“No new taxes,” he added. “Yes,” when asked if this would be until next year.

No new taxes this year: Finance chief Recto

Recto also said he is not bothered by government debt as long as the economy grows faster than the growth of debt, even as he pointed out that the government borrows around P4 billion a day.

Recto explained the proposed 2024 national budget of P5.767 trillion translates to an average daily spending of P15.8 billion versus only P11.7 billion in revenues, “leaving a P4 billion hole which must be plugged by debt.”

“‘Gagasta ng P15.8 billion bawat araw. Ngunit P11.7 billion lang ang kayang pondohan ng buwis. Kaya may P4 bilyon na dapat utangin. Kada 24 oras’ was how I framed our daily fiscal conundrum,” Recto told the committee.

“But it never crossed my mind at that time that one month later, I will be heading the department that must raise the P15.8 billion daily, from tax collected and money borrowed.”

He added that 2/3 of the debt is domestic in the form of treasury bills for instance while only 1/3 is from foreign sources.

“We borrow roughly P4 billion a day. Pero yung utang natin hindi ako nababahala dahil yan naman ay 2/3 we owe it to ourselves, 1/3 is foreign , 2/3 is local. Ang mahalaga, just to be very clear, is you want the economy growing faster than the rate of growth of your debt. Ibig sabihin magagastos mo nang tama,” he told reporters.

ON CHACHA

Recto is in favor of proposed changes in the economic provisions of the Constitution, saying this will lead to more investments, economic growth and tax collection.

“I think there are more pluses, upsides than downsides. Of course, more investments to grow the economy, more taxes to be collected,” Recto told reporters.

On inflation, Recto said the government “will continue to employ measures that will shield consumers, especially the vulnerable, from the pain of elevated prices.”

“As to the pressing issue of inflation, we will continue to employ measures that will shield consumers, especially the vulnerable, from the pain of elevated prices,” Recto said.

“After all, inflation is an unlegislated tax the people should not bear. But in my mind, the best way to inculcate tax obedience is still to promote ease of payment, and to show that taxes that are efficiently collected are effectively spent,” Recto told the committee.

“This covers ODA projects because the people must be told not only where their taxes go, but where the debts they are paying for also go.”

RECTO ON EFFECT OF EL NIÑO ON INFLATION

Recto sees a better harvest in rice this year.

“[The] good news is inflation is on a downward trend. We’re on a range of 2-4 percent. I have assurances from the Secretary of Agriculture na mukhang maganda naman daw yung what to expect this year,” Recto said citing good harvests in rice this year.

He noted surpluses in the production of chicken, egg, vegetables, and fish, but admitted that the African swine fever remains a problem in pork production.

Meanwhile, Recto sees the Philippine economy double in size while debt to GDP ratio “will be smaller,” with poverty incidence going down to 8-9 percent in 2028, from 16 percent today.

“The economy will be upper middle-income status by 2025 and by 2050, the Philippines will be the 14th biggest economy in the world,” Recto said. 

“So we’re on track. Sa G20 kasama na tayo by 2050 if we follow the trajectory,” citing the country’s young population, English speakers, “many” natural resources, mineral reserves, and potential in tourism.

Asked about POGOs, Recto said the country is not reliant on them.

"POGO, Pahina nang pahina yan so we’re not relying on them. I support them paying taxes pero ang pagkaintindi ko dyan, nawawala na yan, we’re not reliant on POGO,” he told reporters.

Recto says he has no plans to run in the 2025 elections and said he serves at the pleasure of the President.