Executive Secretary Ralph Recto doused calls to reduce the value-added tax (VAT) rate, saying the country still needed to borrow more than a trillion pesos even with the current VAT rate.
Senator Erwin Tulfo earlier pushed the idea to reduce the VAT to its original 10 percent rate to ease inflationary pressures as the Philippines continues to grapple with slower growth in the latter part of 2025.
But Recto flagged this, saying the country was already borrowing a lot, even with the current tax rate.
“Considering that we are still borrowing P1.6 trillion, that should be a factor in determining whether we should reduce it or not,” Recto told Palace reporters in a chance interview on January 5.
“Bahala na kayo how you interpret that,” he added.
Recto — who previously served as senator and Finance Secretary — was among the lawmakers who championed raising the VAT rate to 12 percent from 10 percent.
In October last year, Recto also warned that lowering the VAT rate would affect the country’s finances and may lead to a credit ratings downgrade. (ABS-CBN News)
