Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
Nineteenth Congress 
First Regular Session 
HOUSE BILL NO. _______ 
_____________________________________________________________________ 
Introduced by Honorable Mark O. Go 
_____________________________________________________________________ 
EXPLANATORY NOTE 
This bill seeks to affirm and further fortify the intentions of Republic Act No. 6971, 
otherwise known as the “Productivity Incentives Act of 1990”, by promoting inclusive and 
sustainable work productivity programs. 
The abovementioned mandate is an initiative 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.  
One important indicator of our country’s economic development is labor productivity. 
Labor productivity growth registered its highest growth in 2017 at 8.69%. However, due to the 
unprecedented impact of the pandemic, it grew only by 2.4% from 2000 to 2021. Labor 
productivity, despite the implementation of Republic Act No. 6971, remains a growing 
concern.  
The ability of enterprises to compete globally is dependent on the capacity of these 
enterprises to produce and offer goods and services in the most effective and efficient way. 
Accordingly, it is imperative that enterprises must address this productivity challenge so as not 
only to meet this concern but to explore more business opportunities.   
This proposed measure seeks 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.  This bill has been 
approved by the House of Representatives in the 18th Congress and was transmitted to the 
Senate for its consideration and approval.  However, due to lack of material time, this proposed 
measure was not enacted into law. 
In view of the foregoing, urgent approval of this measure is earnestly sought. 
MARK O. GO    
July 1, 2022 
7:03 pm
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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
Nineteenth Congress 
First Regular Session 
HOUSE BILL NO. ________ 
Introduced by Hon. Mark O. Go 
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: 
SECTION 1. Short Title. - This Act shall be known as the “Enterprise Productivity 
Act of 2022”.  
SEC. 2. Declaration of Policy.  – It is hereby declared the policy of the State to: 
(a) Encourage higher levels of productivity in all industries to enable enterprises to
compete globally;
(b) 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 of 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 agreements. It shall cover all 
employees and workers regardless of their position, designation, or status, and the 
manner by which their wages are paid. 
SEC. 4. Definition of Terms. – As used in this Act: 
(a) Businessenterprisereferstoanentitydulyincorporated, organized, or registered
pursuant to the prevailing applicable laws, rules and regulations;
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(b) Productivity improvement program refers to a set of actions identifying and 
addressing productivity problem areas formulated by the productivity 
incentives committee using either a principle, tool, technique, method, practice, 
guideline, model or approach towards productivity improvement in people, 
inputs or technologies, products or services, policies, and process. It shall 
contain, among others, aproductivity tool or technique, benchmarks and 
measurement of productivity, or efficiency improvements; 
  
(c) Productivity incentives committee refers to a body in a business enterprise 
composed of representatives of managementor employers and employees 
created to formulate and implement the productivity incentives program, and 
to settle issues arising from the interpretation or implementation of the said 
program; and 
  
(d) Productivity incentives program refers to a formal agreement formulated by the 
productivity incentives committee, containing a productivity improvement 
program and provisions on its coverage, schemes on the sharing of the gains, 
or savings realized therefrom, and the forms, manner, and frequency of 
payment or distribution of such incentives. 
 
SEC. 5. Productivity Incentives Committee. – Business enterprises employing ten (10) 
or more persons shall establish a productivity incentives committee, hereinafter referred to as 
the Committee, composed of representatives from the 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 or association. 
  
(b) In business enterprises with Labor-Management Councils or Labor- 
Management Committee, it shall be a subcommittee 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. Incentives Program. – The Committee shall develop the productivity 
incentives program. Whenever gains, or savings are realized from the implementation of the 
productivity improvement program, the management shall initiate the discussion on the sharing 
thereof. 
  
Productivity incentives program as provided in this Act shall be based on the implemented 
productivity improvement program, and without prejudice to any company  policy,  program,  
contract,  or  collective  bargaining  agreement providing for higher productivity incentives. 
  
SEC. 7. Tax Deductions. – Private establishments may avail of the following tax 
deductions: 
 
a) Subject to the provisions of Section 6, a business enterprise that adopts a 
productivity incentives program duly and mutually agreed upon by the 
employers and employees’ representatives, shall be granted a special 
deduction from gross income equivalent to fifty percent (50%) of the total 
productivity incentives given to employees under this Program, over and 
above the deductions for total allowable ordinary, and necessary trade, 
business, or professional expenses under the National Internal Revenue 
Code of 1997,  as amended, and other 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 
Committee, over and above the deductions for total allowable ordinary, and 
necessary trade,business, or professional expenses under theNational Internal 
Revenue Code of 1997, as amended, and other prevailing laws, rules and 
regulations; 
  
A business enterprise shall submit a copy of its productivity incentives program and 
other required documents to the concerned revenue district office of the Bureau of 
Internal Revenue to avail of the corresponding benefits, and tax deductions 
provided in this Act; 
 
A business enterprise shall be entitled to the aforementioned tax deductions      
starting the next taxable year following the effectivity of this Act. 
 
SEC. 8. Availment of Tax Deductions. – The Bureau of Internal Revenue shall 
establish a system for availing of tax deductions. It shall maintain and furnish the National 
Wages and Productivity Commission (NWPC) with an annual record of business enterprises 
that avail of tax deductions under this Act for program monitoring. 
 
SEC. 9. Productivity Advisories. – The Regional Tripartite Wages and Productivity 
Board (RTWPB) shall issue advisories on productivity improvement programs and schemes, 
and relative thereto, shall provide training and technical assistance to enterprises. 
  
SEC. 10. Issues and Grievances. – Whenever issues, grievances, or other matters arise 
from the interpretation or implementation of the productivity incentives program, the 
Committee shall meet to resolve the same within fifteen (15) days from receipt of a formal 
complaint from any aggrieved party, subject to the following conditions: 
  
(a) Parties may agree on whether or not to suspend the implementation of the 
productivity incentives program, pending the resolution of the complaint; 
  
(b) Business enterprises shall not be deemed to have forfeited any tax incentives 
accrued prior to the said complaint, and the employees and workers shall not be 
required to reimburse the productivity incentives already granted; 
  
(c) Likewise, productivity incentives that have already accrued prior to the said 
complaint, shall be paid to the entitled employees and workers within six (6) 
months from the date of accrual of the same; and 
  
(d) Any complaint which remained unresolved within thirty (30) days from the time 
of receipt of complaint shall be referred by the Committee to voluntary 
arbitration pursuant to prevailing laws, rules, and regulations on the matter. 
  
SEC. 11. Loan Availment. – All banking institutions shall provide a loan facility or 
extend a credit window at an interest rate lower than the prevailing rate to Micro, Small and 
Medium Enterprises (MSMEs) that implement a productivity improvement program. 
  
SEC. 12. Submission of Productivity Incentives Program. – A business enterprise that 
implements a productivity incentives program shall submit a copy of the same to the RTWPB 
for information and appropriate technical assistance, when needed. 
  
 
 


 
SEC. 13. National Innovation Council. – The National Innovation Council, created 
under Republic Act No. 11293, otherwise known as the “Philippine Innovation Act” shall have 
as one of its overriding goals 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. 14. Monitoring of Compliance. – The Secretary of Labor and Employment shall, 
under Article 128 of P.D. 442, as amended, otherwise known as the “Labor Code of the 
Philippines,” ensure the compliance of private enterprises with the provisions of this Act. 
  
SEC. 15. Technical Assistance. – Any member of the Committee may request technical 
assistance from the following agencies in developing and implementing productivity 
improvement programs: 
  
(a) The Department of Agriculture shall provide technical assistance to MSMEs for 
agricultural extension or agricultural advisory services on current technologies and 
systems; 
  
(b) The Department of Budget and Management (DBM)–Systems and Productivity 
Improvement Bureau shall establish a mechanism for technical assistance in 
implementing the government quality management program; 
  
(c) The Department of Environment and Natural Resources shall be mandated to 
encourage and promote the use of technology and science to create products and 
services that are environmentally- friendly; 
  
(d) The Department of Trade and Industry (DTI)-Bureau of Small and Medium 
Enterprise Development shall extend assistance in the effective marketing of 
products and services of MSMEs; 
  
(e) The  DTI–Competitiveness  Bureau  shall  promote  and  provide counseling 
services on business operations to enhance productivity growth and 
competitiveness of companies and enterprises; 
  
(f) The Department of Science and Technology shall provide and promote 
technology acquisition and use to improve the operational growth of companies and 
enterprises; 
  
(g) The Department of Tourism shall promote and encourage tourism quality 
standards, accreditation, and the development of the tourism value chain; 
  
(h) The Development Academy of the Philippines (DAP) as the designated national 
productivity organization shall ensure that the capacity-building programs 
sponsored by the Asian Productivity Organization (APO) will be extended to the 
private sector enterprises, particularly the MSMEs, free of charge, to enable 
enterprises to upgrade their productivity performance and operations; 
 
  
(i) The NWPC and RTWPB shall provide training, and technical assistance on 
productivity improvement and performance incentives schemes to companies and 
enterprises; 
  
 
 


 
(j) The Technical Education and Skills Development Authority shall provide and 
promote skills training, assessment, and certification; and 
 
k) The University of the Philippines – Institute for Small Scale Industries shall be 
mandated to offer technical assistance to small scale industries. 
  
The enumeration above shall not prevent any member of the Committee from also 
seeking assistance from government agencies, or private institutions, other than 
those cited in this Section, in the development and implementation of their 
productivity improvement and gainsharing programs.  
 
 
SEC. 16. Accreditation of Productivity Experts. – The NWPC shall establish an 
accreditation system for productivity experts who shall provide productivity- related services 
to enterprises. To be accredited by the NWPC, a productivity expert shall pay an accreditation 
fee of Five thousand pesos (₱5,000.00), which amount shall be adjusted by the NWPC as it 
may deem necessary. 
  
The NWPC shall be allowed to utilize fifty percent (50%) of the collected accreditation fees 
for the administration and management of the accreditation system. 
  
An initial seed fund of Fifty million pesos (₱50,000,000.00) shall be drawn from the innovation 
fund under R.A. 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 shall provide technical assistance to micro 
enterprises. Relative to this, accredited productivity experts shall be entitled to receive an 
honorarium pursuant to DBM’s rules and regulations. 
 
The DAP shall regularly conduct trainings, free of charge, to enhance the capabilities of the 
pool of productivity experts 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 the bipartite mechanism especially in the area of bargaining on 
productivity schemes and standards. 
  
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 (₱20,000.00) but not more than Fifty thousand pesos 
(₱50,000.00), or both, at the discretion of the Court, without prejudice to prosecution for any 
other acts punishable under existing laws. 
  
In the case of partnerships or corporations, the penalty shall be imposed upon the officers, 
employees, and other persons responsible who knowingly approved, authorized, or ratified the 
filing of a fraudulent claim. 
 
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 
employers and their employees.  
 
 
 


 
SEC. 21. Public Sector. – The Civil Service Commission and the DBM may establish 
a similar system in the public sector. 
 
SEC. 22. Implementing Rules and Regulations. – Within one hundred eighty (180) 
days from the effectivity of this Act, the NWPC and the DOLE shall, in consultation with other 
government agencies, and concerned stakeholders, issue the rules and regulations necessary to 
effectively implement the provisions of this Act.  
 
SEC. 23. Separability Clause. – Should any provision of this Act be declared 
unconstitutional, the remainder thereof not otherwise affected shall remain in full force and 
effect. 
  
SEC. 24. Repealing Clause. – Republic Act No. 6971, otherwise known as the 
“Productivity Incentives Act of 1990,” is hereby repealed. All laws, presidential decrees, 
executive orders, 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,