Editorial note: This report distinguishes confirmed developments, official claims and matters that remain under negotiation or legislative review.
The proposals could increase take-home pay and ease pressure on small enterprises, but the details, fiscal cost and final eligibility rules remain with Congress.
What was proposed
In his 2026 State of the Nation Address, President Ferdinand Marcos Jr. asked Congress to prioritize measures that would expand the income-tax exemption to workers earning up to ₱350,000 annually, lower rates for other workers, exempt qualified small businesses from the minimum corporate income tax and consider tax-amnesty measures. These are policy proposals, not yet automatic benefits.
Why workers are watching
For households facing food, transport, rent and electricity costs, even a modest reduction in withholding tax can affect monthly cash flow. The strongest public-interest question is not only how much relief is announced, but who qualifies, when the change takes effect and whether employers can implement it clearly.
The trade-off Congress must examine
Tax relief can support consumption and help businesses retain cash, but it also reduces government revenue unless offset by stronger collection, spending discipline or broader economic growth. Lawmakers should publish clear estimates of the cost, the number of beneficiaries and the effect on education, health, infrastructure and social protection.
What happens next
The House has begun listing tax-reform bills for committee consideration. The final law may combine, revise or reject parts of the administration proposal. Until a bill passes both chambers and is signed, workers and businesses should not treat the announced thresholds as final.