Ralph Recto’s game plan

On March 20, 2024, at the Fairmont Hotel ballroom, the Manila Overseas Press Club holds its “Finance Night” with Finance Secretary Ralph G. Recto as guest of honor and speaker.

He speaks before a group of senior and influential media practitioners, prominent businessmen and members of the diplomatic corps.

Ralph is expected to discuss the state of the economy, the economic outlook, economic reforms, the investment climate, the focus on infrastructure and the Ferdinand Marcos Jr. administration’s growth strategy to achieve upper middle income status for the Filipino before June 30, 2028 when his presidency ends.

Seats are limited. Those interested to attend this event, please contact Dena, the MOPC secretariat, 0920-204-9229; or email [email protected] or this column, [email protected].

Ralph Recto and Special Presidential Assistant for Investments and Economic Affairs Frederick Go are the hottest Cabinet members. How the Dynamic Duo performs will determine the success or failure of the BBM administration.

Deck Go is a good catch. As CEO of RLC, this management engineering graduate from Ateneo built from scratch (1989) the sprawling Gokongwei real estate empire – 54 shopping malls, 31 office buildings, 28 hotels and resorts, six industrial zones and 19 mixed-use projects. RLC today has a market cap of P81 billion, up 25 percent from a year ago.

I met Ralph as a young man in his early 20s, introduced to me by his dad, the late assemblyman and blue chip lawyer Rafael “Raffy” Reyes Recto, a son of senator Claro M. Recto.

Raffy’s Greenhills mansion in the 1990s had a sprawling basement designed for combat practice and marksmanship. So Ralph knows combat, including the political variety. The Rectos – Don Claro (designer of the 1935 Constitution), Raffy and Ralph – are distinguished public servants with a sterling political name. Ralph has the added gravitas of being married to a famous actress and distinguished public servant in her own right, Vilma Santos.

Before becoming Finance chief, Ralph was a House Deputy Speaker and represented Batangas’ 6th district. His political career is breathtaking – congressman from 1992 to 2001, senator for three terms, 2001 to 2007 and from 2010 to 2022, where he held key positions such as Senate President Pro Tempore (16th to 18th Congresses), Senate Minority Leader (17th Congress) and chairperson of the committee on ways and means (12th, 13th and 15th Congresses).

Ralph is admired for his sound judgment and math skill. He was the legislature’s “resident numbers genius.” A reformist, he pursued key tax measures and economic reforms aimed at addressing the cost of living, generating meaningful employment and expanding the country’s fiscal space.

Major laws with Ralph’s signature: the Value Added Tax (whose passage resulted in his Senate electoral defeat), Tax Reform for Acceleration and Inclusion (TRAIN) Act; the Universal Healthcare Act; the Rice Tariffication Act; the Ease of Doing Business and Efficient Government Service Delivery Act of 2018; the General Tax Amnesty; the Rationalization of Excise Tax on Automobiles and the Social Reform and Poverty Alleviation Act.

This is Ralph’s second stint in the Cabinet. With world markets reeling from the global financial crisis in 2008, he served as socioeconomic planning secretary and director general of the National Economic and Development Authority (NEDA) under President Arroyo. He launched the Economic Resiliency Plan (ERP), followed that up with the Reloading Economic Acceleration Plan (REAP).

In Melbourne, on March 4, 2024, Secretary Ralph told Australian businessmen the Philippines is ASEAN’s fastest-growing economy. Multilateral organizations expect it to remain the ASEAN frontrunner, a projected GDP growth of 5.8 percent to 6.3 percent in 2024.

Factors working for a strong economy that is globally competitive and inclusive are:

• Inflation is under control, dropping to 2.8 percent in January from 3.9 percent in 2022. Inflation is to remain within the 2-4 percent band this year.

• A vibrant labor market with a historically low unemployment rate, reduced underemployment and faster labor force growth.

• A strong and stable external position. Reserves are at $103 billion, good to buy 7.7 months of imports.

• In ASEAN, the Philippines has the lowest external debt-to-GDP ratio, 28.1 percent.

• The Philippines has a first ever Medium-Term Fiscal Framework, a blueprint to reduce the fiscal deficit, promote fiscal sustainability and drive robust economic growth.

• In 2023, fiscal deficit narrowed to 6.2 percent of GDP from peak of 8.6 percent at the height of the pandemic. It drops to just 3 percent in 2028. Ralph says “this narrowing deficit path is attributed to the consistently higher government revenue collections and improved expenditure management.”

• In 2023, debt-to-GDP ratio further dropped to 60.2 percent, from peak 60.9 percent in 2022 and on track to less than 60 percent by 2028.

• Other reforms: Tax digitalization, six tax reform measures to improve revenue mobilization “further sharpen our fiscal toolkit and modernize the Philippine tax system.”

• “Adherence to fiscal discipline and prudent debt management enabled us to maintain our high credit ratings amid the sea of downgrades globally.”

• BBM’s Build Better More program has 185 big-ticket infrastructure projects worth P9 trillion ($163 billion), primed and ready for PPP investments. Projects include power, physical connectivity, rural development, water resources, digitalization, sustainable initiatives and health care.

• BBM’s Public-Private Partnership Code offers a stable, predictable and competitive environment where high-quality PPP investments can thrive. “It leverages over three decades of experience with our Build-Operate-Transfer Law and integrates best practices to streamline processes, reduce transaction costs and enhance the ease of doing business for PPPs.”

• The Growth-Enhancing Actions and Resolutions or GEARs plan to rapidly expand economic growth by reducing cost of doing business and constraints.

Ralph finished business management at La Salle, masteral units at UA&P and public administration at UP. He also attended Harvard’s John F. Kennedy School of Government.

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Email: [email protected]