NINETEENTH CONGRESS OF THE 
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REPUBLIC OF THE PHILIPPINES 
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First Regular Session 
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of llif -’i
•22 SEP 20 A10:23
SENATE
S. No. 1333
RtCtlVtJ BV.
Introduced by Senator Jinggoy Ejercito Estrada
AN ACT
PROMOTING INCLUSIVE AND SUSTAINABLE PRODUCTIVITY GROWTH, 
REPEALING FOR THE PURPOSE REPUBLIC ACT NO. 6971, OTHERWISE 
KNOWN AS THE "PRODUCTIVITY INCENTIVES ACT OF 1990"
EXPLANATORY NOTE
One important indicator of our country's economic development is labor 
productivity. The ability of the enterprise to compete globally is dependent on the 
enterprises to produce and offer goods and services in the most effective and 
efficient way. Accordingly, it is imperative for these enterprises to promote labor 
productivity not only to expand their business opportunities but also to uphold the 
interest of the workers.
Republic Act No. 6971, otherwise known as the "Productivity Incentives Act of 
1990", was signed into law on November 22, 1990 to "encourage higher levels of 
productivity, maintain industrial peace and harmony and promote the principle of 
shared responsibility in the relations between workers and employers" and 
accordingly, "to provide corresponding incentives to both labor and capital for 
undertaking voluntary programs to ensure greater sharing by the workers in the 
fruits of their labor".
In 2017, labor productivity growth registered its highest at 8.69%. However, 
due to the unprecedented impact of the pandemic, the country was not able to 
sustain this upward trend when it registered only 2.4% growth from 2000 to 2021.


These figures affirm that labor productivity, despite the implementation of the 
Republic Act No. 6971, remains a growing concern.
The "Enterprise Productivity Act" seeks to fortify the intentions of the 
'Productivity Incentives Act of 1990", by promoting inclusive and sustainable work 
productivity programs. It aims to reinforce labor productivity through 1) the 
establishment of a Productivity Incentives Committee (PIC); 2) the adoption of 
productivity incentive programs; 3) granting productivity incentives to employees, 
and 4) providing a tax incentive to business establishments for granting incentives to 
employees.
The bill seeks to promote a working environment with an increased level of 
productivity, maintain industrial harmony, and propel shared commitment and 
responsibility among employers and employees. As a policy of the State, the 
preservation of balance in the workplace is necessary to recognize both the rights of 
the workers and their employers: the former, to their right to a fair and just share of 
labor; and the latter, to their right to reasonable returns of investment vital for 
growth and expansion.
This measure was approved by the House of Representatives in the 18th 
Congress. Its immediate passage is supported by the Department of Labor and 
Employment (DOLE).
In view of the foregoing, the swift approval of this measure Is highly 
recommended.
OY EJERCITO ESTRADA


NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
S. No. 1333
of il'C €*rtvftarp
‘72 SEP 20 AlO ’23
Introduced by Senator Jinggoy Ejercito Estrada
AN ACT
PROMOTING INCLUSIVE AND SUSTAINABLE PRODUCTIVITY GROWTH, 
REPEALING FOR THE PURPOSE REPUBLIC ACT NO. 6971, OTHERWISE 
KNOWN AS THE "PRODUCTIVITY INCENTIVES ACT OF 1990"
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
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Section 1. Short Title. - This Act shall be known as the "Enterprise Productivity
Act'
Sec. 2. Declaration of Policy. - It is hereby declared policy of the State to:
(a) Encourage higher levels of productivity in all industries to enable 
enterprises to compete globally;
(b) To promote gainful employment, improve working conditions, maintain 
industrial peace and harmony, and promote the principle of partnership 
and shared responsibility in the relations between workers and 
employers, recognizing the right of labor to its just share in the fruits 
of production and the right of business enterprises to reasonable 
returns on investments and for expansion and growth; and,
(c) Provide corresponding incentives to both labor and capital for 
undertaking productivity improvement programs and gainsharing.
Sec. 3. Coverage. - This Act shall apply to all business enterprises with or 
without existing and duly recognized collective bargaining representatives. It shall


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cover all employees and workers regardless of their position, designation, or status, 
and the manner by which their salaries/wages are paid.
Sec. 4. Definition of Terms. As used in this Act:
(a) Business Enterprise refers to an entity duly incorporated, organized, or 
registered pursuant to the prevailing applicable laws, rules, and 
regulations;
(b) Productivity Incentives Committee (PIC) refers to a body in a business 
enterprise composed of representatives of management/employers and 
employees created to formulate and implement productivity incentives 
program, and to settle issues arising from the interpretation or 
implementation of the said program;
(c) Productivity Improvement Program refers to a set of actions identifying 
and addressing productivity problem areas formulated by the PIC using 
either a principle, tool, technique, method, practice, guideline, model, 
or approach towards productivity improvement in people, 
inputs/technologies, products/services, policies, and process. It shall 
contain, among others, a productivity tool or technique, benchmarks 
and measurement of productivity or efficiency improvements;
(d) Productivity Incentives Program refers to a formal agreement 
formulated by the PIC containing a productivity improvement program 
and provisions on the sharing of the gains and/or savings reaiized from 
the productivity improvement program, and its coverage, sharing 
scheme, and forms, manner, and frequency of payment of such 
incentives;
Sec. 5. Productivity Incentives Committee. - Business enterprises employing 
ten (10) and over shall establish a Productivity Incentives Committee, hereinafter 
referred to as PIC, composed of representatives from management/ employers and 
employees.
(a) In business enterprises with legitimate labor organization or workers' 
association, the employee representatives shall be those designated in 
the collective bargaining agreement or by the said 
organization/association.


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(b) In business enterprises with Labor-Management Councils or Labor- 
Management Committee, it shall be a sub-committee thereof.
(c) In business enterprises without legitimate labor organization or 
workers' association, the employee representatives shall be those 
designated by at least a majority of all rank-and-file employees.
Sec. 6. Productivity Incentives Program. - The PIC shall develop the 
Productivity Incentives Program. Whenever gains or savings are reaiized from the 
implementation of the productivity improvement program, the management shall 
initiate the discussion on the sharing of such gains or savings.
Productivity incentives program as provided in this Act shall be based on the 
implemented productivity improvement program, and without prejudice to any 
company policy and program, contract or collective bargaining agreement providing 
for higher productivity incentives.
Sec. 7. Tax Incentives. - Private establishments may avail of the following tax 
incentives:
(a) Subject to the provisions of Section 6 hereof, a business enterprise 
which adopts a productivity incentives program duly and mutually 
agreed upon by the Productivity Incentive Committee shall be granted 
a special deduction from gross income equivalent to fifty percent 
(50%) of the total productivity incentives given to employees under 
the Productivity Incentives Program over and above the total allowable 
ordinary and necessary business deductions for said incentives under 
prevailing laws, rules and regulations;
(b) A business enterprise shall be granted a special deduction from gross 
income equivalent to fifty percent (50%) of the total grants for training 
and special studies given to employees pursuant to the Productivity 
Incentives Program prepared by the Productivity Incentive Committee 
over and above the total allowable ordinary and necessary business 
deductions for said incentives under prevailing laws, rules, and 
regulations;
Business enterprises shall submit a copy of its productivity incentives 
program and other required documents to the concerned revenue


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district office of the Bureau of Internal Revenue to avail of the
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corresponding benefits and tax incentives provided in this Act;
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(c)The business enterprise shall be entitled to the aforementioned tax
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incentives starting the next taxable year after the effectivity of this Act;
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and,
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(d)The Bureau of Internal Revenue shall establish a system for availment
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of tax incentives. It shall maintain and furnish NWPC an annual record
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of business enterprises that availed of tax incentives under this act for
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program monitoring.
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Sec. 8. Productivity Advisories. - The Regional Tripartite Wages and
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Productivity Boards (RTWPBs) shall issue advisories on productivity improvement
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programs and productivity incentive schemes, and relative thereto, shall provide
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training and technical assistance to enterprises.
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Sec. 9. Issues and Grievances. - Whenever issues, grievances, or other
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matters arise from the interpretation or implementation of the productivity
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incentives program, the PIC shall meet to resolve the same within fifteen (15) days
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from receipt of a formal complaint from any aggrieved party, subject to the
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following conditions:
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(a) Parties may agree on whether to suspend the implementation of the
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productivity incentives program pending the resolution of 
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complaint;
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(b) Business enterprises shall not be deemed to have forfeited any tax
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incentives accrued prior to the said complaint and the employees and
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workers shall not be required to reimburse the productivity incentives
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already granted;
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(c) Likewise, productivity incentives that have already accrued prior to the
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said complaint shall be paid to the entitled employees and workers
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within six (6) months from the date of accrual of the same; and,
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(d)Any complaint which remained unresolved within thirty (30) days from
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the time of receipt of complaint shall be referred by the pic 
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voluntary arbitration pursuant to prevailing laws, rules, and regulations
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on the matter.


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Sec. 10. Loan Availment - All banking institutions shall provide MSMES that 
will implement a productivity improvement program a loan or credit window at an 
interest rate lower than the prevailing market rate.
Sec. 11. Submission of Productivity Incentives Program. - A business 
enterprise which implemented a productivity incentives program shall submit a copy 
of the same to the Regional Tripartite Wages and Productivity Boards for their 
information and appropriate technical assistance, when needed.
Sec. 12. Nationai Innovation Council. - The National Innovation Council, 
created under Republic Act No. 11293, otherwise known as the Philippine Innovation 
Act, shail have as one of its overriding goal the attainment of high and rising levels 
of productivity. Hence, its national innovation agenda and strategy document shall 
mainstream strategic actions in support of national development plans to improve 
the country's overall productivity performance.
Sec. 13. Productivity Advocacy. - To enabie a culture of productivity as a way 
of life, productivity concepts shall be incorporated in the basic and higher education 
curricula of the Department of Education and the Commission on Higher Education, 
respectively, and training regulations of the Technical Education and Skills 
Development Authority.
Sec. 14. Monitoring of Compliance. - The Secretary of Labor and 
Employment, under Article 128 of Presidential Decree No. 442, as amended, 
otherwise known as the "Labor Code of the Philippines", shall ensure compliance of 
private enterprises to the provisions of this Act.
Sec. 15. Technical Assistance. - Any member of the PIC may request 
technical assistance from the following agencies in developing and implementing 
productivity improvement programs:
(a) Department of Agriculture for agricultural extension on current 
technoiogies and system;
(b) Department of Budget and Management - Systems and Productivity 
Improvement Bureau for technical assistance in implementing the 
government quality management program;
(c) Department of Environment and Natural Resources for greening 
technologies;


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(d) Department of Trade and Industry - Bureau of Small and Medium 
Enterprise Development for Youth Entrepreneurship and Enterprise 
Development, and its marketing services
(e) Department of Trade and Industry - Competitiveness Bureau for business 
counseling;
(f) Department of Science and Technology for technology acquisition and use;
(g) Department of Tourism for tourism quality standards and accreditation;
(h) Development Academy of the Philippines for productivity tools and 
technologies;
(i) National Wages and Productivity Commission/Regional Tripartite Wages
and Productivity Boards - for productivity training and technical 
assistance;
(j) Technical Education and Skills Development Authority for skills training,
assessment, and certification; and,
(k) University of the Philippines - Institute for Small Scale Industries for 
technical assistance for small scale industries.
In addition, any member of the PIC may also seek assistance from other 
government agencies or private institutions other than those cited above when 
developing and implementing their productivity improvement program.
Sec. 16. Accreditation of Productivity Experts. - The National Wages and 
Productivity Commission shall establish an accreditation system for productivity 
experts who will provide productivity-related services to enterprises. The productivity 
expert shall pay an accreditation fee of Five thousand pesos (P5,000.00), to be 
adjusted by the Commission as it may deem necessary.
The National Wages and Productivity Commission shall be allowed to utilize 
fifty percent (50%) of the collected accreditation fee for the administration and 
management of the accreditation system.
An initial seed fund of Fifty million pesos (P50,000,000.00) shall be drawn 
from the innovation fund under Republic Act No. 11293, or the National Innovation 
Act.
Sec. 17. Assistance to Micro Enterprises. - The NWPC shall develop 
guidelines in the engagement of productivity experts who will provide technical


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assistance to micro enterprises. Relative to this, accredited productivity experts are 
entitled to receive honorarium pursuant to Department of Budget and Management's 
rules and regulations.
The Development Academy of the Philippines, as the National Productivity 
Organization, shall regularly enhance the capabilities of the pool of productivity 
experts for free on advanced productivity technologies and systems.
Sec. 18. Strengthening Workplace Bipartite Mechanism. - The Department of 
Labor and Employment (DOLE) shall formulate a program, in consultation with 
employer and labor groups, to strengthen bipartite mechanism especially in the area 
of bargaining focused on productivity.
Sec. 19. Penalty. - Any person who shall make any fraudulent claim under 
this Act, regardless of whether or not a tax benefit has been granted, shall upon 
conviction be punished with imprisonment of not less than six (6) months but not 
more than one (1) year or a fine of not less than Twenty thousand pesos 
(P20,000.00) but not more than Fifty thousand pesos (P50,000.00), or both, at the 
discretion of the Court, without prejudice to prosecution for any other acts 
punishable under existing laws.
In case of partnerships or corporations, the penalty shall be imposed upon 
the officer(s) or employee(s) who knowingly approved, authorized or ratified the 
filing of the fraudulent claim, and other persons responsible thereof.
Sec. 20. Non-Diminution of Benefits. - Nothing in this Act shall be construed 
to diminish or reduce any benefits and other privileges enjoyed by workers under 
existing laws, decrees, executive orders, company policy or practice, or any 
agreement or contract between the employer and employees.
Sec. 21. Public Sector. - The Civil Service Commission and the Department of 
Budget and Management may establish a similar system in the public sector.
Sec. 22. Implementing Rules and Regulations. - Within one hundred eighty 
days (180) days from the effectivity of this Act, the National Wages and Productivity 
Commission and the DOLE, in consultation with the other government agencies and 
concerned stakeholders, shall issue the rules and regulations necessary to effectively 
implement the provisions of this Act.


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Sec. 23. Separability Clause. - Should any provision of this Act be declared 
unconstitutional, the remainder thereof not otherwise affected shali remain in full 
force and effect.
Sec. 24. Repealing Clause. - Republic Act No. 6971 is hereby repealed. All 
laws, presidential decrees, executive orders, and proclamations or administrative 
regulations that are inconsistent with the provisions of this Act are hereby repealed, 
amended, or modified accordingly.
Sec. 25. Effectivity. - This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a newspaper of general circulation.
Approved,