Manila, Oct. 14 -- Finance Secretary Ralph Recto on Tuesday cautioned lawmakers against proposals to reduce the value-added tax (VAT) rate from 12 percent to 10 percent, warning that such moves could lead to revenue losses and force the government to borrow even for its regular expenses.

"Kung magbabawas pa tayo ng revenue, baka pati ang current operating expenses natin uutangin na rin natin (If we reduce revenue further, we might end up borrowing even for our current operating expenses)," Recto said during the Senate hearing on the Department of Finance's proposed PHP37.8-billion budget for 2026, which was later approved by the subcommittee.

Recto, who authored the Expanded VAT law in 2005 when he was still a senator, said he respects ...