MANILA, Philippines, Feb. 10, 2026 — Lawmakers from the Makabayan bloc have filed a measure in the House of Representatives seeking to raise the tax exemption ceiling for 13th-month pay and other benefits from the current P90,000 to P150,000. 

The proposal, contained in House Bill 7661, was authored by ACT Teachers Party-list Rep. Antonio Tinio, Gabriela Party-list Rep. Sarah Elago, and Kabataan Party-list Rep. Renee Co.

The bill amends Section 32 of the National Internal Revenue Code, which currently excludes from gross income bonuses and benefits not exceeding P90,000. Lawmakers argue that the adjustment is necessary to ease the tax burden on wage earners amid rising living costs.

“Proposals for opportunities to decrease the income tax burdens of ordinary wage and salary earners, such as this Bill, are complementary to the demands of the labor sector and the masses for increased pay and lower prices of basic goods and services,” the measure states.

Under the proposal, the P150,000 ceiling would not remain fixed. The Commissioner of Internal Revenue would be mandated to periodically review and adjust the cap based on inflation and other economic indicators. 

Consultations with labor groups and independent institutions monitoring the cost of living would also be required to ensure that the exemption remains responsive to economic realities.

Tax Relief That Inflation Already Demands

Tax thresholds are not neutral when they remain unchanged for years. As prices rise, static ceilings quietly pull more ordinary workers into taxable brackets, turning inflation into an invisible tax hike without any formal policy decision.

The 13th-month pay exemption cap reflects this slow erosion. What once protected wage earners gradually becomes outdated, forcing bonuses meant to cushion expenses to be treated as taxable income instead of relief. The burden grows silently, not because people earn more, but because money buys less.

If inflation keeps rewriting real income, why do tax rules stay frozen until workers are already paying the price?