Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio Balisacan has expressed support for reducing taxes but emphasized that an alternative source of revenue must be in place to ensure that government spending on infrastructure and social services remains unaffected.
In an interview on the sidelines of the press briefing on the first quarter performance of the Philippine economy on Thursday, May 7, 2026, Balisacan stated that the proposal to adjust the income tax exemption threshold would increase the purchasing power of Filipinos. However, he warned that this could have an impact on government services.
“Reduction of taxes is a ticklish issue for economic managers because our people want better infrastructure, more schools, more hospitals, more services. And if you remove those taxes, how are you going to support those important, critical projects that are especially needed by the poor and low-income groups?” he said.
Senator Sherwin Gatchalian has filed Senate Bill 56, also known as the Granting Increase in Take-Home Pay for All Working Filipinos Act. The bill proposes to raise the annual income tax exemption threshold to P400,000 from the current P250,000. Additionally, it seeks to increase the cap on tax-free bonuses to P150,000 from the existing P90,000.
“I am in favor of reducing taxes, especially those that burden the poor and the middle class, but we have to find a replacement for very much needed tax revenues. And unless we are able to do that, what you remove might actually hurt the very group that you are trying to help,” Balisacan concluded.
