| PBBM administers the oathtaking of the Department of Finance Secretary Ralph Recto | Photo via OP/PCO
President Ferdinand ”Bongbong” Marcos Jr. welcomed Congressman Ralph Recto, husband of Philippine timeless movie queen and former Batangas Governor Vilma Santos. He said Secretary Recto “should be allowed to determine whether tax reforms are necessary.
PBBM was further quoted saying, ”Well, I don’t want to preempt the Secretary in making any of these announcements… Let him have a look,” Marcos said. “I know he’s fully cognizant of different issues that are prevalent in the Department of Finance, so let us allow him to make an analysis, and we leave it to him to make those announcements when the time comes.”
Now Finance Secretary Ralph Recto said Friday that he would prioritize the collection of taxes for the country’s coffers. At a Palace press briefing, Recto said, ‘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.”
”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,” he added.
Recto also mentioned that the Philippine government would borrow P2.7 trillion by next year.
Recto would be right. At P20B a day, the Philippines will not need to borrow and will have a P2.7T surplus for 2024. A Herculean task indeed. As long as Recto does not share the same outlook as outgoing Sec Diokno. To paraphrase, Diokno said during a live TV interview, “I am all for taxing the rich, but I am also pragmatic; given the constitution of the Philippine Congress, I’d rather spend time on other more worthwhile undertakings.” A truly damming assessment of the Philippine Congress. Diokno has now been assigned to the Bangko Sentral Monetary Board, which is not a painful transition.
The challenge for Secretary Recto is the same faced by Diokno. Will Recto even consider taxing the rich or his erstwhile colleagues in Congress?
The minimum wage is now P610, not per hour but daily. The minimum wage is exempt from income taxes but not from other mandated salary deductions for social security (SSS/GSIS), a semblance of health insurance (PhilHealth), and a savings cum housing plan (PAG-IBIG). All of these mandatory salary deductions are about to increase in 2024. With rice hitting P60 per kilo, it is no wonder the minimum wage earner is barely scraping by. It could be argued that those who make 5-10X minimum wage are better able to pay higher taxes and more so those whose incomes are beyond that threshold – including senators and congressmen, not just based on their salaries as legislators but their other income.
“Sounding alarm bells may help but has limited efficacy if the intended audience continues to be in denial or, worse, is part of those fueling the speculation for short-term gain; damn the torpedos, in the end, sharing little of the pain which will be sorely felt by the marginalized and the least privileged.”
Suppose Recto finds the courage even to propose higher taxes for higher-income Filipinos. Would he be brave enough to submit earned income tax credits for those in the lower income brackets? That presumes Recto has even heard of such a tax credit or is willing to implement the same.
Additionally, will Recto and his cohorts recognize the looming impact of a broader conflict in the Middle East on oil and power prices and the collateral effect of higher oil prices on the gross international reserves due to higher import prices? Not to mention the economic recession that may ensue due to diminished consumer confidence. Now pile on the burgeoning national debt and unpaid obligations, among which is the unfunded Php9T, yes trillion, Armed Forces Pension Fund, which could be argued may be contributing to the lingering rumors of military retirees being involved in government destabilization, if only to protect their pension.
If you’ve tried driving around condominiums in Metro Mania at night, pay attention to condo units with no lights on. These ‘dark’ condo units suggest unoccupied units, suggesting either the units are unsold or sold to speculators hoping to flip those condos for a profit. This trend spelled disaster during the last global recession precipitated by U.S. real estate collapse in 2009, leading to a panicked recession.
Lessons are hard to learn. Burying one’s head in the sand never solves anything. Waiting for the next domino to fall is quite foolish. Sounding alarm bells may help but has limited efficacy if the intended audience continues to be in denial or, worse, is part of those fueling the speculation for short-term gain; damn the torpedos, in the end, sharing little of the pain which will be sorely felt by the marginalized and the least privileged.
ABOUT THE AUTHOR: Dr. Crispin Fernandez advocates for overseas Filipinos, public health, transformative political change, and patriotic economics. He is also a community organizer, leader, and freelance writer.
