Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Twentieth Congress
First Regular Session

HOUSE BILL NO. 4408

Introduced by Representative RAYMOND ADRIAN SALCEDA

AN ACT
ESTABLISHING A UNIVERSAL BASIC INCOME PROGRAM TO GUARANTEE A.
MINIMUM LEVEL OF ECONOMIC SECURITY FOR ALL FILIPINOS,
PROVIDING ITS FUNDING SOURCES INCLUDING VAT ON DIGITAL
SERVICES, RATIONALIZING REGRESSIVE AND NON-TARGETED AYUDA
PROGRAMS AND ENTITLEMENTS, AND FOR OTHER PURPOSES

EXPLANATORY NOTE

Article Il, Section 9 of the 1987 Constitution declares that the State shall promote a just
and dynamic social order that ensures 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.

Yet, as of 2024, one in every five Filipinos — or 19.9 percent of the population
according to the Philippine Statistics Authority — still lives below the poverty threshold.
Income inequality remains persistent: the top decile of houscholds receives over 40 percent of
national income, while the bottom decile receives less than two percent.

The country’s fragmented system of social transfers has produced duplication, leakage,
and inequities. Some programs are universal in form yet regressive in outcome — with
wealthier households capturing a significant share of fuel subsidies, utility cross-subsidies, and
statutory discounts and tax exemptions. At the same time, emergencies such as the COVID-19
pandemic revealed the difficulty of rapidly scaling targeted ayuda, leaving millions stranded
without timely support.

This bill proposes a Universal Basic Income (UBI) Program, granting every Filipino
citizen One Thousand Pesos (P1,000.00) per month, regardless of employment or income
status. This baseline income support serves three systemic functions:

1. Anti-poverty and equity instrument. UBI guarantees a minimum standard of living,
reduces extreme poverty, and complements targeted programs such as the Pantawid


Pamilyang Pilipino Program (4Ps) and the Social Pension for Indigent Senior Citizens.
It equalizes opportunity by ensuring every Filipino household has some level of
economic security.

2. Macroeconomic stabilizer. UBI is counter-cyclical: when economic shocks occur —
whether due to global oil price spikes, inflation surges, or disasters — the steady cash
stream sustains houschold consumption, buffers aggregate demand, and reduces
volatility.

3. Systems rationalization. UBI is funded in part through the rationalization of non-
targeted ayuda programs and entitlements that disproportionately benefit wealthier
groups. A National Inventory and Benefit-Incidence Analysis shall identify programs
where the top thirty percent of households receive an excessive share of benefits, or
where leakages and inefficiencies exceed acceptable thresholds. These programs shall
sunset and be converted into targeted digital vouchers or UBI top-ups, with savings
transferred into a Universal Basic Income Trust Fund (UBITF).

‘The program is further anchored in sustainable revenue sources. Specifically:

+ Digital economy taxation revenues collected under Title IV, Sections 105 and
108 of the National Internal Revenue Code of 1997, as amended, which impose
VAT on services rendered electronically and on digital platforms, whether by
resident or non-resident providers.

+ Incremental revenues from sin taxes, mining fiscal reforms, and carbon pricing
mechanisms,

+ Efficiency savings from subsidy rationalization and reduction of leakages through
PhilSys-based targeting.

The program will be delivered through secure PhilSys-linked digital platforms overseen
by the Bangko Sentral ng Pilipinas, ensuring transparency, accountability, and financial
inclusion. The Department of Social Welfare and Development shall administer the program,
with oversight and fiscal support from the Department of Finance, Department of Budget and
Management, and the National Economic and Development Authority.

By guaranteeing P1,000 per month to every Filipino adult, while at the same time
pruning inefficient subsidies, this bill ensures that fiscal resources are spent equitably,
efficiently, and with maximum impact on poverty reduction, inflation resilience, and social

cohesion.

In view of the foregoing, the immediate passage of this bill is earnestly sought.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Twentieth Congress
First Regular Session

HOUSE BILLNO. 4408

Introduced by Representative RAYMOND ADRIAN SALCEDA

AN ACT
ESTABLISHING A UNIVERSAL BASIC INCOME PROGRAM TO GUARANTEE A
MINIMUM LEVEL OF ECONOMIC SECURITY FOR ALL FILIPINOS,
PROVIDING ITS FUNDING SOURCES INCLUDING VAT ON DIGITAL
SERVICES, RATIONALIZING REGRESSIVE AND NON-TARGETED AYUDA
PROGRAMS AND ENTITLEMENTS, AND FOR OTHER PURPOSES

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 “Universal Basic Income Act.”

SEC. 2. Declaration of Policy. It is the policy of the State to guarantee a basic level of
income security for all Filipino citizens; reduce poverty and vulnerability to shocks; rationalize
fragmented and non-targeted subsidies; and fund income support in a transparent, progressive,
and fiscally sustainable manner consistent with national development goals.

SEC. 3. Definition of Terms. As used in this Act:

(a) Universal Basic Income (UBI) refers to a regular, unconditional cash transfer of
fixed nominal value provided by the State to all eligible Filipino citizens.

(b) Digital economy refers to the production, distribution, and consumption of goods
and services transacted through digital platforms, including digital service providers
and electronic marketplaces.

(c) Non-targeted subsidy or entitlement refers to any transfer, discount, tax expenditure,
price control, cross-subsidy, or publicly funded privilege not conditioned on income,
poverty, or vulnerability criteria.

(d) Indigent refers to individuals or households meeting income and vulnerability
thresholds as determined by the Department of Social Welfare and Development
(DSWD), using the Community-Based Monitoring System (CBMS) and the Listahanan
or successor systems.


(c) PhilSys refers to the Philippine Identification System.

(f) UBI Trust Fund (UBITF) refers to the special account in the General Fund created
under this Act to hold dedicated UBI funding flows.

SEC. 4. Establishment of the Universal Basic Income Program. There is hereby
established a Universal Basic Income Program under which every Filipino citizen who is at
least eighteen (18) years of age shall receive a regular, unconditional cash grant from the
national government.

SEC. 5. Eligibility and Coverage. All Filipino citizens aged eighteen (18) years and
above, whether employed, self-employed, or unemployed, and whether residing in the
Philippines or temporarily abroad but maintaining Philippine tax residency, shall be covered,
subject to registration under PhilSys. Persons deprived of liberty shall accrue UBI but its access
shall be governed by rules of the Bureau of Corrections and the Bureau of Jail Management
and Penology for their basic needs.

SEC. 6. Amount of the Grant; Indexation and Review. The grant shall be One Thousand
Pesos (P1,000.00) per month per eligible person. Congress shall review the amount every three
(3) years, guided by inflation, fiscal capacity, poverty thresholds, and labor market conditions.
The National Economic and Development Authority (NEDA) shall recommend adjustments.

SEC. 7. Payment and Delivery Mechanism. — The DSWD shall administer UBI, in
coordination with the Department of Finance (DOF), Department of Budget and Management
(DBM), Bangko Sentral ng Pilipinas (BSP), and the Philippine Statistics Authority (PSA).
Transfers shall be made through PhilSys-linked digital accounts with government financial
institutions and accredited financial service providers, including banks and e-money issuers.
The BSP shall ensure financial inclusion, security, and interoperability. UBI shall be
withdrawable in cash and usable for digital payments without fees charged to beneficiaries.

SEC. 8. Funding Sources. The Program shall be funded by:

(a) Value-Added Tax (VAT) on digital services pursuant to Title IV, Sections 105 and
108 of the National Internal Revenue Code of 1997, as amended (NIRC), including
collections from resident and non-resident digital service providers required to register

and remit VAT;

(b) Earmarked portions of incremental excise revenues from alcohol, tobacco, heated
tobacco, vapor products, and sugar-sweetened beverages;

(©) Earmarked portions of revenues from mining fiscal reforms and carbon pricing
mechanisms, as may be enacted;

(d) Dividends from government-owned or controlled corporations in excess of the
baseline required by law;

(©) Proceeds from the rationalization and conversion of non-targeted subsidies and
entitlements under Sections 10 to 12 of this Act; and

(® Annual appropriations under the General Appropriations Act (GAA).


SEC. 9. Universal Basic Income Trust Fund (UBITF). There is hereby created a
Universal Basic Income Trust Fund, a special account in the General Fund, to receive and hold
the revenues enumerated in Section 8. The UBITF shall be used exclusively to finance UBI
grants and reasonable administrative costs not exceeding two percent (2%) of total annual UBI
disbursements. The Bureau of the Treasury shall manage the UBITF; the Commission on Audit
shall conduct annual audits.

SEC. 10. National Inventory and Benefit-Incidence Review of Ayuda Programs and
Entitlements. Within one hundred twenty (120) days from effectivity, the DOF, DBM, DSWD,
and NEDA, with technical support from the PSA, shall publish a National Inventory of all
budgetary subsidies, discounts, tax expenditures, price controls, and cross-subsidies
constituting ayuda or entitlements. The Inventory shall include a Benefit-Incidence Analysis
by income decile, administrative leakage and duplication metrics, and unit cost of transfer
reaching the poorest forty percent (bottom four income deciles).

SEC. 11. Regressivity and Inefficiency Tests. A program or entitlement shall be
regressive or inefficient if any of the following is established by the Benefit-Incidence
Analysis:

(a) The top thirty percent (30%) of households receive twenty percent (20%) or more
of total benefits; or

(b) Administrative leakage and duplication exceed ten percent (10%) of total program
cost; or

(©) The cost to deliver one (1) peso of benefit to the poorest forty percent (40%) exceeds
two (2) pesos of total program cost.

SEC. 12. Sunset and Conversion of Non-Targeted Programs.

(a) Automatic Sunset. Programs and entitlements failing any test in Section 11 shall
sunset twelve (12) months after publication of the Inventory unless the concerned
agency obtains a Congressional exemption by joint resolution.

(b) Conversion to Targeted Digital Vouchers or UBI Top-Ups. Sunsetting programs
shall be converted into:

(1) Means-tested digital vouchers credited monthly to indigent beneficiaries
identified through PhilSys-CBMS; or

(2) UBI top-ups in disaster or shock periods, automatically triggered by a
declaration of a State of Calamity or National Emergency and calibrated by
NEDA and DSWD rules.

(c) Budgetary and Tax-Expenditure Savings. All savings from the sunset or conversion
of non-targeted programs, including reduced tax-expenditure claims, shall accrue to the
UBITE.

(@) E-Invoicing Compliance for Reimbursements. Beginning on the fifteenth (15th)
month from effectivity, reimbursements or tax deductions for statutory discounts shall


be allowed only if supported by PhilSys-verified, electronic invoices issued through
systems accredited by the Bureau of Internal Revenue.

SEC. 13. Specific Areas for Rationalization. Without prejudice to the Inventory’s
results, the following categories are prioritized for review and conversion under Sections 10 to
12:

(a) Statutory universal price discounts and VAT exemptions not conditioned on

indigency or income (e.g., broad mandatory discounts where the fisc participates via

tax expenditure), which shall be retained for indigent beneficiaries and converted to
targeted digital vouchers for others;

(b) Non-targeted fare or fuel subsidies not restricted by income or vulnerability criteria,
which shall be targeted using PhilSys-CBMS and transport registry data;

(©) Cross-subsidies in utilities that are not aligned with the lifeline or indigency
definitions under the Electric Power Industry Reform Act and related issuances, to be
retargeted using CBMS; and

(@) Duplicative emergency cash programs that can be subsumed under the UBI top-up
mechanism in disaster periods.

Nothing in this section shall diminish benefits precisely intended for the poor, such as
the Pantawid Pamilyang Pilipino Program (4Ps) and the Social Pension for Indigent Senior
Citizens, which shall continue and be complementary to UBI.

SEC. 14. Protection of the Poor and Vulnerable; Complementarity with Targeted
Programs. UBI shall complement and shall not replace: the 4Ps, the Social Pension for Indigent
Senior Citizens, disability support, and other targeted programs for the bottom income deciles.
Where a sunset or conversion under Sections 12 and 13 affects a vulnerable group, the agency
shall ensure no-detriment through a functionally equivalent targeted benefit.

SEC. 15. Anti-Duplication and Data Governance, The DSWD shall maintain a secure,
privacy-compliant registry of UBI recipients, interoperable with PhilSys and CBMS, and shall
implement deduplication protocols. Agencies shall share necessary data pursuant to data
sharing agreements aligned with the Data Privacy Act.

SEC. 16. Monitoring, Evaluation, and Reportorial Requirements. The DOF and NEDA
shall submit to Congress an annual UBI Impact Report evaluating poverty reduction,
consumption smoothing, labor market participation, and inflation resilience; and a
Rationalization Progress Report quantifying savings credited to the UBITF. The Commission
on Audit shall publish an annual UBI and UBITF Audit.

SEC. 17. Implementing Rules and Regulations (IRR). Within ninety (90) days from
effectivity, the DOF, DBM, DSWD, BSP, NEDA, PSA, and BIR shall promulgate the IRR. The
IRR shall include (a) VAT registration and compliance rules for resident and non-resident
digital service providers under NIRC Title IV, Sections 105 and 108, (b) Inventory and benefit-
incidence methodologies, and (c) voucher and UBI top-up triggers and delivery standards.

SEC. 18. Appropriations. The initial requirements for the UBI Program shall be charged
against the current appropriations of implementing agencies, without prejudice to supplemental


appropriations. Thereafter, such amounts as may be necessary shall be included in the annual
GAA, supplemented by inflows to the UBITF.

SEC. 19. Separability Clause. If any provision of this Act is declared unconstitutional,
the remainder shall not be affected thereby.

SEC. 20. Repealing Clause. All laws, decrees, executive orders, rules and regulations,
and parts thereof inconsistent with this Act are hereby repealed or modified accordingly.

SEC. 21. Effectivity. This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation.

Approved,