16th CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'14 
MAR -3 Pc) :48 
SENATE 
S. BILL NO. 215'7 
Introduced by Senator SONNY M. ANGARA 
Explanatory Note 
Article 2 Section 9 of the Constitution mandates the promotion of a just and 
dynamic social order that will ensure the prosperity and independence of the nation and 
free the people from poverty through policies that' provide adequate social services, 
promote full employment, a rising standard of living, and an improved quality of life for 
all. 
This bill seeks to increase th~ 13th month pay exemption from Php 30,000 to Php 
75,000 amending for the purpose Section 32 (B)(7)(e) of Republic Act (RA) 8424, 
otherwise known as the "National Internal Revenue Code of 1997". The measure 
endeavors to fulfill the objective of the State in improving the state of life through 
additional remuneration that Juan dela Cruz may enjoy. 
RA 8424 was enacted circa 1997 when the level of Consumer Price Index (CPI) 
was merely 60, while the present cpr is 137. The current 13th month pay exemption is not 
consistent with the present CPI since the country has undergone perennial inflation. In 
consideration of the present-day circumstances, the amendment to the NIRC is a timely 
reform to update the relevant provision. 
By raising the 13th month pay ceiling, we are not only introducing an amendment 
to adjust to passage of time, but we are also ensuring that the fruits of labor that Juan 
de/a Cruz diligently worked for can be enjoyed to a greater extent. The country should 
not look at this measure as a revenue eroding measure. It is simply granting the same 
value as what the country was willing io give to its citizens as an exemption in 1997. 
In view of the foregoing, immediate passage of this bill is earnestly sought. 
SONNY M. ANGARA 
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16th CONGRESS OF THE REPUBLIC 
) 
OF THE I)HILIPPINES 
) 
First Regular Session 
) 
'14 
M~R -3 P5 :48 
SENATE 
S. BILL NO. _2_1_5_7 
Introduced by Senator SONNY M. ANGARA 
AN ACT 
ADJUSTING THE 13TH MONTH PAY AND OTHER BENEFITS CEILING 
EXCLUDED FROM THE COMPUTATION OF GROSS INCOME FOR 
PUR]lOSES OF INCOME TAXATION, AMENDING FOR THE l)URPOSE 
SECTION 32 (B), CHAPTER VI OF THE NATIONAL INTERNAL REVENUE 
CODE OF 1997, AS AMENDED 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
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Section 1. Section 32 (B), Chapter VI of the National Internal Revenue Code of 
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the Philippines (Republic Act No. 8424) is hereby amended as follows: 
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"SEC. 32. Gross Income. 
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xxx 
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(B) Exclusions from Gross Income. The following items shall not be included 
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in gross income and shall be exempt ±l'om taxation under this title: 
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xxx 
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(7) Miscellaneous Items. 
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xxx 
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(e) 13th Month ]lay and Other benefits. Gross benefits received by 
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officials and employees of public and private entities: Provider,!, however, That the total 
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exclusion under this subparagraph shall not exceed [Thirty thousand pesos (P 30,000)] 
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SEVENTY THOUSAND PESOS (P75,OOO) which shall cover: 
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xxx 
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(iv) Other benelits such as productivity incentives and Christmas bonus: 
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[Provided, further, That the ceiling of Thirty thousa~d pesos (P30,000) may 
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increased through rules and regulations issued by the Secretary of Finance, upon 
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recommendation of the Commissioner, after considering among others, the eflect 
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of the same on the int1ation rate at the end of the taxable year.] PROVIDED, 
THAT NOT LATER 
THAN 
THREE 
YEARS 
AFTER 
THE 
EFFECTIVITY OF THIS ACT AND EVERY THREE (3) YEARS 
THEREAFTER, 
THE 
AMOUNT 
HEREIN 
STATED 
SHALL 
BE 
ADJUSTED TO ITS PRESENT VALUE USING THE CONSUMER PRICE 
INDEX, AS PUBLISHED BY THE NATIONAL STATISTICS OFFICE 
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(NSO). 
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xxx." 
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SEC. 2. Repealing Clause. All laws, decrees, resolutions, orders or ordinances 
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or parts thereof inconsistent with this Act, are hereby repealed, amended or modified 
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accordingly. 
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SEC. 3. Effectivity. This Act shall take effect fifteen (15) days after its 
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publication in the Otlicial Gazette or in at least two (2) newspapers of general circulation. 
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Approved, 
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