,;iemltl' 
FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
'.!!}ff". of Hjefor",targ 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'11 
MAR 1 0 P 3 :27 
SEN~I.E 
. 
S.No. 
~'139 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
Salaries of most of the public and private employees are generally low comparable to the 
cost of living standards set by the government in the country. In 2008, from the "Estimates of 
Family Living Wage (FL W) Per Day Based on NSCB (National Statistical Coordination Board) 
Cost Menus (In Pesos) and Food Expenditures Ratios of Families in the 5th-7th Deciles Solely 
Dependent on Wages and Salary (Family Size is 6)" a family of six in the National Capital 
Region needs P917 to live decently. The highest minimum wage in the NCR in June 2008 is 
P382.00. In July 2010, almost two years after, minimum wage rates is still at a low of P404 in 
the NCR or only P12,120 per month (30 days), not even commensurate to the 2008 FLW. 
Wages lag way behind the family living wage because the law only allows one wage 
increase per year while the prices of basic commodities from gasoline to food have been 
shooting up to heights more and more Filipinos are not able to cope with. Regions also vary 
because of so-called differing conditions of living so that wages are set by Regional Wage 
Boards. That is why the Social Weather Station (SWS) March 19-22, 2010 survey found 43% or 
an estimated 8.1 million families rating themselves as "mahirap", matching the record low set in 
March 1987. Although the government sees this as an improvement from the previous years (in 
July 2001, 66% consider themselves poor), it is still a significant figure at 48 million people. 
This bill seeks to provide Filipinos reprieve from the worsening economic condition in 
the country given the labor laws that still need to be reformed to really address the real economic 
condition of our workers and employees in the country, more than the business companies. It 
seeks to amend the National Internal Revenue Code of the Philippines or a R.A. No. 8424 to 
increase of ceiling of Christmas bonus and other benefits' from taxation. 
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Bonuses and other additional benefits during Christmas come only once a year, and in a 
time when prices of commodities increase because of the demand for more food on the table to 
celebrate the season. It would mean a lot to the minimum wage earners to be relieved from 
additional tax burdens for their Christmas bonuses and other benefits. For the government 
employees, the government might as well give them the full benefit of their bonus as Christmas 
gift from the government. 
This is the Senate counterpart bill of House Bill No. 4177 by Reps. Neri Colmenares and 
Teddy Casifio. 
2 


foemltl' 
FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
(~ff". of I~.;''''<i'''ij 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'11 
MAR 1 0 P 3 :27 
SEN2
AT7
E39 
S. No. --''''-'-==-
Introduced by Senator Miriam Defensor Santiago 
I 
AN ACT 
2 
AMENDING SECTION 32 (B), CHAPTER VI OF THE NATIONAL INTERNAL REVENUE 
3 
CODE OF THE PHILIPPINES (R.A. 8424) THEREBY INCl,lliASING THE CEILING OF 
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CHRISTMAS BONUS AND OTHER BENEFITS FROM TAXATION 
5 
Be it enacted by the Senate and the House 0/ Representatives 0/ the Philippines in 
Congress assembled: 
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SECTION I. Amendment 0/ National Internal Revenue Code. - Section 32 (B), Chapter 
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VI of the National Internal Revenue Code of the Philippines (RA No. 8424) is hereby amended 
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as follows: 
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SEC. 32, Gross Income. - x x x 
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(B) 
Exclusions/rom Gross Income. - The following items shall not be 
II 
included in gross income and shall be exempt from taxation under this title: x x x 
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(e) 
13th Month Pay and Other Benefits. - Gross benefits received by 
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officials and employees of public and private entities: Provided, 
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however, That the total exclusion under this subparagraph shall not 
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exceed [Thirty thousand pesos (P30,000)] FORTY THOUSAND 
16 
PESOS (P40,OOO) which shall cover: 
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(i) 
Benefits received by officials and employees of the 
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national and local government pursuant to Republic 
19 
Act No. 6686; 
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(ii) 
Benefits 
received 
by employees 
pursuant to 
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Presidential Decree No. 851, as amended by 
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Memorandum Order No. 28, dated August 13, 1986; 
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I 
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3 
4 
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(iii) 
Benefits received by officials and employees not 
covered by Presidential decree No. 851, as amended 
by Memorandum Order No. 28, dated August 13, 
1986.; and 
(iv) 
Other benefits such as productivity incentives and 
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Christmas bonus Provided, further, That the ceiling 
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of [Thirty thousand pesos (P30,OOO)] FORTY 
8 
THOUSAND PESOS (NO,OOO) may be increased 
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through rules and regulations issued by the Secretary 
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of 
Finance, 
upon 
recommendation 
of 
the 
II 
Commissioner, after considering among others, the 
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effect on the same of the inflation rate at the end of 
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the taxable year. 
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SECTION 2. Separability Clause. - If any provision or part hereof, is held invalid or 
IS 
unconstitutional, the remainder of the law or the provision not otherwise affected shall remain 
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valid and subsisting. 
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SECTION 3. Repealing Clause. - Any law, presidential decree or issuance, executive 
18 
order, letter of instruction, administrative order, rule or regulation contrary to or is inconsistent 
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with the provision ofthis Act is hereby repealed, modified, or amended accordingly. 
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SECTION 4. Effectivity Clause. - This Act shall take effect fifteen (IS) days after its 
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publication in at least two (2) newspapers of general circulation. 
Approved, 
iapm030711 
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