Senator Francis “Kiko” Pangilinan. Photo courtesy of Kiko Pangilinan/Facebook.
Senator Francis “Kiko” Pangilinan filed a bill seeking to raise the annual tax-exempt income threshold to Php 350,000 from the current Php 250,000.
Senate Bill No. 2344, filed on July 28, also proposed revising the succeeding income tax brackets so workers could keep more of their earnings.
Pangilinan said the measure would ease the burden on households facing higher costs for food, transportation, medicine and other daily needs.
He argued that the present threshold no longer matched current economic conditions because inflation had significantly reduced Filipinos’ purchasing power.
In the bill’s explanatory note, Pangilinan said that by June 2026, Php 1 had the buying power of only about Php 0.74 compared with 2018. He added that households now needed around Php 135 to buy goods and services worth Php 100 eight years earlier.
Under the proposal, annual taxable income of up to Php 350,000 would be exempt from income tax beginning Jan. 1, 2027. Income above the threshold would be taxed under adjusted rates ranging from 15 percent to 35 percent.
The bill also sought to increase the tax-free threshold for qualified self-employed individuals and professionals under the 8-percent tax regime to Php 350,000.
Pangilinan filed the measure after President Ferdinand Marcos Jr. urged Congress during his State of the Nation Address to expand income tax exemptions. Similar bills were also filed by Senate President Pro Tempore Vicente Sotto III, who proposed the same threshold, and Sen. JV Ejercito, who sought a Php 600,000 annual exemption.
