MANILA, Philippines — Sen. Francis “Kiko” Pangilinan has filed a bill seeking to raise the annual income exempt from tax from P250,000 to P350,000, citing the rising cost of living and the erosion of Filipinos’ purchasing power.
Pangilinan filed Senate Bill No. 2344 on July 28, proposing adjustments to the existing income tax brackets so workers can keep more of their earnings.
Under the measure, annual taxable income of up to P350,000 would remain tax-free. Income above that amount would be taxed at 15 percent up to P500,000, 20 percent up to P1 million, 25 percent up to P2.5 million, 30 percent up to P8 million and 35 percent for income exceeding P8 million, starting Jan. 1, 2027.
The bill would also increase the tax-free threshold from P250,000 to P350,000 for qualified self-employed individuals and professionals covered by the 8-percent tax regime.
Pangilinan said the current P250,000 threshold no longer reflects economic conditions as inflation has reduced the purchasing power of Filipino workers.
“Can increasing people’s take-home pay be considered a luxury?” Pangilinan said in a statement, arguing that workers need additional income to cover daily expenses and basic necessities.
He cited government data showing that by June 2026, a peso could purchase only about P0.74 worth of goods and services compared with its purchasing power in 2018. This means households now need about P135 to buy what P100 could purchase in 2018, he said.
Pangilinan said taxes continue to reduce workers’ take-home pay even during periods of economic difficulty.
His proposal follows President Ferdinand Marcos Jr.’s call in his State of the Nation Address to expand personal income tax exemptions to Filipinos earning up to P350,000 annually.
Senate President Pro Tempore Vicente Sotto III has also filed a bill seeking the same P350,000 tax-free threshold, while Sen. JV Ejercito has proposed raising the exemption to P600,000 a year.