In 2007, Recto lost his Senate reelection bid because, as many analysts believed, he had authored the unpopular EVAT (Expanded Value Added Tax) law.
In July 2008 he was appointed to head the National Economic and Development Authority (NEDA) in the Arroyo administration, but resigned from his position in August 2009 in preparation for another run for the Senate in the 2010 elections.
[2] Recto took up a 6-day Certificate of Leadership Scholarship Course at the John F. Kennedy School of Government of Harvard University, Boston, Massachusetts, United States in 1997.
He was co-chairman of the Congressional Oversight Committees on the Proper Implementation of the National Internal Revenue Code (NIRC) and on the Official Development Assistance (ODA).
During his first six-year term as Senator, he was largely responsible for the passage of laws with positive impact to consumers, small entrepreneurs, workers and industry.
[4] President Gloria Macapagal Arroyo, on July 23, 2008, named him as the new director-general of National Economic and Development Authority, replacing Augusto Santos, acting NEDA chief.
[5] On August 11, 2009, he resigned as NEDA secretary and Presidential Adviser for Economic Planning, in preparation for another run for Senate in the 2010 election.
Recto ran for re-election in the 2016 Philippine Senate election under the Koalisyon ng Daang Matuwid of LP standard bearer Mar Roxas and won placing 11th in the polls.
On the opening day of the 17th Congress, July 25, 2016, Senator Francis Escudero nominated Recto for the presidency.
[6] Recto, in his acceptance speech for the post, vowed that the minority would cooperate with the Duterte administration's plans if these serve "the public interest."
[10] Upon being term-limited in the Senate, in 2022, Recto ran for a comeback to the House of Representatives, this time at the 6th district of Batangas, which consists of only the city of Lipa.