By Kenneth Christiane L. Basilio, Reporter

A BILL that seeks to raise the income tax exemption for workers has been filed at the House of Representatives, a move meant to ease the burden of rising living costs and make the tax system more “equitable.”

Filed on Nov. 17, House Bill No. 6036 proposes to amend the Tax Code by lifting the personal exemption ceiling to incomes below P40,000 a month, or P480,000 a year, from P250,000.

“It aims to restore the real value of the exemption, provide meaningful relief to working individuals and help ensure that the tax system remains equitable and responsive to current economic conditions,” Party-list Rep. Iris Marie D. Montes said in the bill’s explanatory note.

The Philippines raised the exemption to P250,000 under a 2017 tax reform law, which at the time covered wage earners making about P20,000 a month.

“While this adjustment was intended to align tax rates with income levels at the time, the real value of the exemption has since been eroded by inflation,” Ms. Montes said.

“The rising cost of living, driven by increases in food, fuel, utilities and transportation expenses has significantly reduced the purchasing power of ordinary Filipino workers,” she added.

She said many low- and middle-income workers are losing a significant share of their take-home pay to taxes.

“Raising the exemption threshold will allow workers to retain more of their income, stimulate household consumption and support inclusive economic growth,” she added.

Under the bill, those earning more than P480,000 but not over P650,000 annually will be taxed 15% on income above the lower threshold. Workers earning as much as P1.3 million a year will face a levy of P37,500 plus 25% of the excess over P650,000.

People with yearly incomes of as much as P3.2 million will be taxed P167,000 plus 25% of the amount above P1.3 million. Those earning as much as P12.8 million a year will pay P642,500 plus 30% of income exceeding P3.2 million.

Workers making more than P12.8 million will be taxed P3.5 million plus 35% of income exceeding that threshold.

“Increasing the tax exemption will reduce the government’s tax base,” Reinielle Matt M. Erece, an economist at Oikonomia Advisory & Research, Inc., said in a Viber message. He said the government might raise other taxes to offset lost revenue, which could limit public programs and projects.

“The economic impact ultimately depends on how the measure is designed,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in a Viber message.

“If it is well-targeted and paired with reforms that improve collection efficiency and broaden the tax base, it can lift purchasing power without endangering fiscal sustainability,” he added.

He said the measure could boost household spending and support economic growth. But Mr. Erece cautioned it could also stoke inflation if demand grows faster than supply.

“Higher spending power can only do so much if the supply side is not addressed,” he said. “Strong demand without matching supply may result in higher prices.”

VICE-PRESIDENT (VP) Sara Duterte-Carpio on Monday said she is ready to respond to allegations in a potential impeachment complaint, but described any move to remove her as a “budget-driven” maneuver, coming as lawmakers prepare to finalize the proposed P6.793-trillion national budget for 2026.

In a statement, she accused legislators of using the budget as leverage to secure support for her impeachment, recalling last year’s process in which she alleged a pay-for-sign scheme influenced votes during the 2025 budget’s finalization.

“The impeachment complaint against me was never really driven by principle but by price,” she said. “I have always stood ready to answer any allegation grounded in fact and truth.”

The vice-president’s conflict with President Ferdinand R. Marcos, Jr. — once a close ally — escalated into a political feud last year, culminating in her impeachment by the House of Representatives, where most members are aligned with the Marcos administration.

Ms. Duterte is the first Vice-President in Philippine history to be impeached. Her Senate trial, which would have determined whether she could be removed from office and barred from public service for life, was aborted after the Supreme Court voided the proceedings.

She faced multiple allegations, ranging from budget anomalies to plotting the assassination of Mr. Marcos, his wife and his cousin, a former Speaker. Ms. Duterte has denied all wrongdoing.

The high court barred any impeachment filings against her until Feb. 6, 2026, but groups seeking her removal have indicated plans to lodge complaints once the restriction is lifted.

“Its timing reveals a pattern that has become all too familiar,” Ms. Duterte said, asserting that the constitutional mechanism is being “dangled once again as a bargaining chip” just before approval of the 2026 national budget.

Lawmakers are expected to finalize discussions on the spending plan in the coming days, with a joint congressional conference likely later this week to reconcile House and Senate versions before sending it to the President for review and signature.

Ms. Duterte said some legislators had already disclosed attempts to solicit impeachment endorsements in exchange for budget allocations. “I cannot remain silent while the impeachment process is being twisted into a budget-driven racket.”

The Vice-President was impeached after 215 lawmakers endorsed the complaint, surpassing the one-third legal threshold to transmit charges directly to the Senate without hearings.

Ms. Duterte criticized the lack of follow-up on alleged misuse of public funds, saying: “Despite such revelations, no inquiry or investigation was conducted to hold anyone accountable for the billions of pesos squandered on political warfare.”

Historically, few Philippine officials have faced impeachment. Former President Joseph Estrada in 2000, Ombudsman Merceditas Gutierrez in 2011, Chief Justice Renato Corona in 2011 and Election commissioner Juan Andres Bautista in 2017 were among them.

Mr. Estrada’s trial was aborted amid political turmoil, Mr. Corona was convicted, and Ms. Gutierrez and Mr. Bautista resigned before proceedings concluded. — Kenneth Christiane L. Basilio