Finance Secretary Ralph G. Recto has told economic journalists that the government will exhaust its power to ensure that the next generations of Filipinos will not inherit the same challenges of today, and has called on them to continue fair and insightful reporting of the Philippine economic story to help widen public economic literacy.

“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,” Secretary Recto said in his keynote speech during the Economic Journalists Association of the Philippines (EJAP)- San Miguel Corporation (SMC) Economic Forum on July 8, 2024.

With the theme: “Future Proofing the Philippine Economy: Strategies and Policies”, Secretary Recto thanked the press for helping the government explain the critical aspects of its decision-making process that shape the future of the country.

“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,” he stressed.

The Finance Chief underscored that to ensure food security, which is a top priority of President Ferdinand R. Marcos, Jr., the government is sparing no effort to address the current rice-driven inflation due to its price increases in the global market.

In June 2024, rice accounted for 53.5% of the overall inflation for average consumers, while it had a bigger share of 79.6% for those in the bottom 30% of households.

“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% from 35%, retail rice prices could go down by an average of 10% or PHP 5.0 per kilo for the rest of the year.

This move can lower the price of rice to below PHP 50 as early as August, reducing the overall inflation rate for the year to an average of 18 percentage points or 3.3% from 3.5%.

“And while this could entail revenue losses for the government amounting to PHP 9.2 billion for the rest of 2024, in the bigger picture, this improves the welfare of households, especially the poor,” Secretary Recto noted.

“A sustained high price of rice could continue to drive inflation, delaying the reduction of policy interest rates by the BSP and derailing the country’s economic growth trajectory,” he added.

Secretary Recto assured that such 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 the planned increase of the Rice Competitiveness Enhancement Fund (RCEF) and higher investments in the agriculture sector.

In 2024, the agriculture sector’s budget grew by 27.7% to PHP 221.7 billion. This will help install more irrigation systems, construct farm-to-market roads, procure agri machinery and equipment, and prioritize research and development.

“All these will set the stage for a modernized agriculture sector, transforming it into a principal engine that drives national growth,” Secretary Recto said.

Meanwhile, he emphasized that the recalibration of the country’s growth and fiscal goals is part of the government’s proactive steps in future-proofing 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 amidst 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,” the Secretary added.

Over the medium term, the DOF anticipates a 10.3% average annual growth in total revenues to support the Filipino people’s growing needs, reaching PHP 4.27 trillion in 2024 to PHP 6.25 trillion by 2028.

This robust growth will be on the back of enhancing the administrative efficiency of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) 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 PHP 42 billion annually into the nation’s coffers beginning in 2025.

According to Secretary Recto, every peso will 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).

The Finance Secretary 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,” Secretary 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 added.

“It will be a Bagong Pilipinas that every Filipino rightfully deserves—one that the next generation will proudly inherit,” the Finance Chief said in closing.

Aside from Secretary Recto, the forum was attended by Office of the President of the Philippines’ Special Assistant to the President for Investment and Economic Affairs Frederick D. Go, National Economic and Development Authority Secretary Arsenio M. Balisacan, Bangko Sentral ng Pilipinas Governor Eli M. Remolona Jr., and Department of Budget and Management Undersecretary Joselito R. Basilio.