Face off between father and son, Finance secretary Ralph Recto and congressman Ryan Recto, during DBCC deliberations. (Photo from Philnews.ph)
MALATE, Manila — While the administration of President Ferdinand ‘Bongbong’ Marcos Jr. (PBBM) is pushing for the Philippines to achieve upper-middle income status by 2027, finance secretary Ralph Recto expressed some musgiving, saying there is a downside to this that could repercussive effects to the country’s economy.
Recto explained that on the specific economic strategy, the first thing is to pass the budget for 2026 which will pave the way for the Philippines to upgrade its status to the desired level.
However, he added that the downside of being an upper-middle income country is that the country’s official development assistance (ODA) loans will also increase the cost ang the interest will go up because we’re no longer a lower-middle income country.
“So if you’re upper-middle income your borrowing cost goes up, the concessional loans go up, the cost of borrowing,” Recto pointed out.
“And second, the way you calculate poverty incidence changes. Because today we calculate it at US$4.20 a day per individual, if you become an upper-middle income, the threshold becomes US$8.40, the poverty threshold. So that’s the downside to it,” he likewise noted.
Prior to this, Recto’s son, Batangas District VI representative Ryan Recto, lamented during the Development Budget Coordination Committee (DBCC) briefing of the House of Representatives’ committee on appropriations how the Philippines missed out on being an upper-middle income country by just a few dollars.
Accordingly, the younger Recto cited that upper-middle class economies are measured by gross national income (GNI) per capita, or the average income earned by each person in a country yearly, which is obtained by dividing a country’s GNI against its population.
So, in interpellating the DBCC, including the agency headed by his father, Rep. Recto disclosed that currently, the Philippines posted a recorded GNI per capita of US$4,470—higher than the previous GNI capita of US$4,230—and despite this increase, the country was just shy of $26 from reaching its desired threshold.
“Madam Chair, we’re still a lower-middle income country, we fall in the range of US$1,136 to US$4,495. It was a missed opportunity, we could have been classified as upper-middle income, we were only short by US$26,” he noted in a mixed of Filipino and English.
After this statement, Secretary Recto reacted to butt in and assure his son that the target would be met before the current year is over.
“Don’t worry, we will catch up by this year,” the older Recto said, eliciting laughter from the lawmakers and resource persons from the DBCC.
“And if you still have a lot of questions to throw at me, I will run against you in our district,” he interjected quickly, leading to more attendees chuckling over the face off between father and sibling.
To this the congressman-son replied with a smile: “Well, I was gonna say, Mr. Secretary, that I believe we are capable of achieving that target, I therefore commend the economic team and this administration which includes you Mr. Secretary, the achievements you made are not easy, so congratulations.”