Republic of the Philippines

House of Representatives
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILLNO,_ 3409

Introduced by Honorable Anthony M. Bravo and Honorable
Cresente C. Paez

EXPLANATORY NOTE

Salaries of most of the public and private employees are generally low comparable to the
gost of living standards set by the government in the country. In 2008, from the “Estimates of
Family Living Wage (FLW) Per Day Based on NSCB (National Statistical Coordination Board)
Cost Menus (In Pesos) and Food Expenditures Ratios of Families in the Sth-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), itis 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 (RA 8424) to INCREASE

THE CEILING of Christmas bonus and other benefits from taxation

Bonuses and other additional benefits during Christmas come only once a year, and ina
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,

SENTE C, PAEZ


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Republic of the Philippines

House of Representatives
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 3403

introduced by Honorable Anthony M. Bravo and Honorable
Cresente C. Paez

AN ACT
AMENDING SECTION 32 (B), CHAPTER VI OF THE NATIONAL INTERNAL
REVENUE CODE OF THE PHILIPPINES (R.A. 8424) THEREBY INCREASING THE
CEILING OF CHRISTMAS BONUS AND OTHER BENEFITS FROM TAXATION

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Amendment of National Internal Revenue Code, ~ Section 32 (B), Chapter
VI of the National Internal Revenue Code of the Philippines (RA No. 8424) is hereby amended

as follows:

SEC. 32. Gross Income. —

XXX
(B) Exclusions from Gross Income. - The following items shall not be included
in gross income and shall be exempt from taxation under this title:

XXX

(e) 13th Month Pay and Other Benefits. - Gross benefits received by officials and
employees of public and private entities: Provided, however, That the total
exclusion under this subparagraph shall not exceed [Thirty thousand pesos

(P30,000)] FORTY THOUSAND PESOS (P40,000) which shall cover:

(i) Benefits received by officials and employees of the national
and local government pursuant to Republic Act No. 6686;

(ii) Benefits received by employees pursuant to Presidential
Decree No. 851, as amended by Memorandum Order No. 28, dated
August 13, 1986;


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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 Christmas
bonus Provided, further, That the ceiling of [Thirty thousand pesos
(P30,000)] FORTY THOUSAND PESOS (P40,000) may be
increased through rules and regulations issued by the Secretary of
Finance, upon recommendation of the Commissioner, after
considering among others, the effect on the same of the inflation

rate at the end of the taxable year.

SECTION 2. Separability Clause. - If any provision or part hereof, is held invalid or
unconstitutional, the remainder of the law or the provision not otherwise affected shall remain

valid and subsisting,

SECTION 3. Repealing Clause. ~ Any law, presidential decree or issuance, executive
order, letter of instruction, administrative order, rule or regulation contrary to or is inconsistent

with the provision of this Act is hereby repealed, modified, or amended accordingly.

SECTION 4. Effectivity Clause, - This Act shall take effect fifteen (15) days after its

publication in at least two (2) newspapers of general circulation

Approved,