Continuity in DOF leadership

Shortly after Finance Secretary Ralph Recto was appointed by President Marcos, some quarters raised the question on how long he would remain in the Cabinet.

Would he leave later in the year to file his certificate of candidacy for senator in the 2025 midterm elections? Or would he stay on until the President’s term ends in 2028?

Except for his appointment as director general of the National Economic and Development Authority during the administration of then President Gloria Macapagal Arroyo, Recto had been a member of Congress for decades as senator or congressman.

In fact, he was a deputy speaker of the House of Representatives when he was appointed by the President.

Recto put an end to that speculation when, in the course of the confirmation of his appointment at the Commission on Appointments (CA), he said he would not run for any position in the 2025 polls.

Following tradition on the appointment of former members of Congress to the Cabinet, Recto’s appointment breezed through the CA and was unanimously approved.

He also assured the CA members that he would not push for new taxes this year and instead raise additional revenues by closing tax leaks, improving the tax collection process and avoiding unnecessary expenditures.

In the latter case, his experience in the Senate where he actively participated in the review of the national budgets proposed by the executive would come in handy.

He would know the schemes that government offices use to divert funds to projects that do not have redeeming values or just for lining the pockets of their officers.

But note that any cost-cutting measures he may want to implement would require a lot of political will on his part and, most importantly, the backing of the President in case his action meets strong interference from influential politicians.

Recto’s promise to put his political plans in abeyance and remain in the Cabinet (which he holds at the pleasure of the President) must have been the product of very careful consideration. Based on his election record, he exchanged his near assured election to the Senate (or a congressional seat in his Batangas bailiwick) for an executive position that does not have security of tenure. He took a political gamble whose outcome is uncertain.

By promising not to be an “interim” secretary, he minimized the possibility that the leadership of the Department of Finance (DOF) would be subject to a “revolving door” process, i.e., frequent changes, that had been the bane in past administrations.

With Recto as head of the government’s economic managers, the country can look forward to appreciable long-term continuity in the implementation of the DOF’s plans and programs whose gestation periods take months, if not years, to complete.

It is common knowledge that whenever there are changes in the top posts of executive departments, the predecessors’ plans and programs are set aside if they do not jibe with those of the new managers.

The latter would have their own ideas on how to run their department and implement them even if they would, in the process, result in a drastic overhaul of the things their predecessors had done.

There’s nothing wrong with that, but frequent changes in government policies caused by erratic movements in leadership have been a perennial complaint by the business sector, in particular, foreign investors, who consider consistency in policies critical to their operation.

If we go by Recto’s statement on new taxes, the taxpayers can take comfort that from now until the end of the year, the government would not ask Congress to enact new tax laws.

That commitment, however, is subject to the ability of the Bureau of Internal Revenue and the Bureau of Customs to collect, both administratively and judicially, the taxes and other forms of revenues needed to fund the government’s operations.

If they are unable to do so and the other measures that Recto had proposed do not work, the tax climate next year could be challenging to the public. INQ

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