While the previous administration warned that imposing a “wealth tax” on the rich could trigger capital flight and tax avoidance, Finance Secretary Ralph G. Recto—the chief economic manager of the Marcos Jr. administration—said he would support Congress if it proposes such a measure.

“Let that matter be debated in Congress. If lawmakers pass it [into law], I will support it,” Recto told reporters on the sidelines of the Cabinet-level Development Budget Coordination Committee (DBCC) briefing on the proposed ₱6.793-trillion 2026 national budget at the House of Representatives on Monday, Aug. 18.

This was Recto’s response when asked regarding his perception on the risks that a wealth tax could have on high-net-worth individuals (HNWIs). Recto also deferred to Congress when sought for his opinion on whether or not a wealth tax would discourage HNWIs from investing.

“Allow Congress to pass it first. There’s no bill yet,” Recto said, adding that for the 20th Congress, the Department of Finance (DOF) is only focused on the enactment of the tax on single-use plastics.

Apart from the single-use plastic levy, he reiterated the possible enactment this year of a general tax amnesty as an additional revenue stream.

It can be recalled that Recto opposed a wealth tax proposal last year, arguing that the Philippines already has “a lot of wealth taxes to a certain degree.”

In 2021, former DOF Secretary Carlos G. Dominguez III warned lawmakers that imposing a “super-rich” tax on individuals with assets of over ₱1 billion could lead to aggressive tax avoidance and push capital and investments out of the country.

Dominguez had said a wealth tax could undermine its purpose of generating more revenues, noting that while it may boost collections at first, it could eventually hurt growth and investments.

“There is a risk of capital flight if the wealth tax is passed in the Philippines,” Dominguez had said, noting that only Belgium, Norway, Spain, and Switzerland still impose such a tax during that time, while many countries have repealed the measure due to capital mobility and the use of tax havens.

Instead of slapping taxes on movable assets, Dominguez had argued that updating property valuations so local government units (LGUs) can properly tax real estate is the correct approach to imposing a wealth tax on the rich.

“Unlike the wealth tax on movable assets that could only lead to capital flight and tax avoidance, properly taxing land ensures that the government gets to collect taxes on the rich because land cannot be hidden nor spirited away,” the former chief economic manager of the Duterte administration said in 2022, before President Ferdinand R. Marcos Jr. assumed power.