By Benjamin Cuaresma
MANILA, Philippines — The push to grant Filipino workers greater tax relief gained further momentum in the Senate after Sen. Francis “Kiko” Pangilinan filed a measure seeking to exempt annual incomes of up to P350,000 from personal income tax, reinforcing President Ferdinand Marcos Jr.’s call to raise the minimum taxable income threshold.
Filed as Senate Bill No. 2344, Pangilinan’s proposal seeks to amend the country’s income tax structure beginning Jan. 1, 2027, increasing the current tax-exempt ceiling from P250,000 to P350,000 a year. The measure aims to cushion Filipino wage earners from the continuing effects of inflation by allowing them to keep a larger portion of their salaries.
The proposal comes just days after President Marcos, in his fifth State of the Nation Address, urged Congress to approve legislation expanding the coverage of income tax exemptions to workers earning up to P350,000 annually.
Pangilinan said the existing tax-free threshold no longer reflects present economic realities, arguing that years of rising prices have steadily eroded the purchasing power of ordinary Filipinos.
“Can increasing people’s take-home pay be considered a luxury? Let us increase their take-home pay even just a little so they have money for dinner or maintenance medicine for high blood pressure,” the senator said, stressing that workers need immediate relief from soaring living costs.
In the bill’s explanatory note, Pangilinan cited inflation data showing that by June 2026, the peso’s purchasing power had significantly weakened compared with 2018 levels. He noted that goods worth P100 in 2018 now cost roughly P135, making the present tax exemption outdated.
Aside from increasing the tax-free threshold, the measure proposes a revised graduated income tax schedule. Taxable income exceeding P350,000 but not over P500,000 would be subject to a 15-percent tax, followed by 20 percent for income up to P1 million, 25 percent up to P2.5 million, 30 percent up to P8 million, and 35 percent for earnings beyond P8 million.
The bill also seeks to increase from P250,000 to P350,000 the tax-exempt ceiling for qualified self-employed individuals and professionals covered under the government’s 8-percent income tax regime.
Pangilinan’s measure is the latest in a growing number of Senate proposals seeking broader tax relief. Senate President Pro Tempore Vicente Sotto III earlier filed a bill carrying the same P350,000 tax-free income threshold, while Sen. JV Ejercito proposed a more aggressive increase to P600,000 annually, equivalent to P50,000 a month.
With several versions now pending and backed by the President’s policy direction, lawmakers are expected to prioritize deliberations on measures that seek to reduce the tax burden on millions of Filipino workers beginning in 2027.
ia/xf
