- Senate Bill No. 56 would raise the income-tax exemption to ₱400,000 from ₱250,000.
- The GINHAWA Act would increase the tax-free bonus cap to ₱150,000 from ₱90,000.
- The bill remains a proposal; the current ₱250,000 threshold still applies unless lawmakers enact it.
Senate President Win Gatchalian is pressing a bill to raise the annual income-tax exemption threshold from ₱250,000 to ₱400,000 and increase the tax-free bonus cap from ₱90,000 to ₱150,000. He says higher oil prices are eroding workers’ purchasing power.
The proposal, Senate Bill No. 56, is called the GINHAWA Act, short for the Granting Increase in Take-Home Pay for All Working Filipinos Act. It would expand the amount of income and compensation excluded from tax.
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Gatchalian urged lawmakers to move faster if conflict in the Middle East persists. He linked the urgency to the effect of crude prices on household budgets.
“If the conflict in the Middle East continues, we need to speed up the realization of GINHAWA because the high prices of crude oil will further weaken”
Gatchalian made the statement on October 4, 2026. The proposal remains a bill, not a change to the tax rules already in place.
The proposal raises both income and bonus limits
The measure would make the first ₱400,000 of annual income tax-free, lifting the current threshold by ₱150,000. It would also raise the ceiling for tax-exempt 13th-month pay and other bonuses by ₱60,000, from ₱90,000 to ₱150,000.
Those increases describe how much income or bonus compensation would be shielded. They do not mean workers would receive those amounts as cash refunds. The bill proposes exemptions, not a direct payment.
It also names other forms of compensation for tax exemption: service charges, overtime pay, holiday pay, night-shift differential and hazard pay. These provisions sit alongside the higher bonus ceiling and income threshold.
The proposed changes would affect different parts of a worker’s pay. A higher annual threshold concerns income; the bonus cap concerns specified additional compensation. The measure sets out both changes.
No new threshold applies unless lawmakers enact the bill. Until then, the existing ₱250,000 limit remains the baseline under current tax rules.
The relief pitch is tied to oil prices and purchasing power
Gatchalian has presented the bill as a way to ease the pressure on ordinary workers facing higher living and fuel costs. His statement connects the tax proposal to rising crude prices and the possibility that continuing Middle East tensions could intensify that pressure.
The argument centers on take-home pay. The bill would reduce the share of specified income and compensation subject to tax if it becomes law, while Gatchalian’s appeal for quicker action is conditional on the conflict continuing.
The proposal does not set out an individual tax saving in the material described here. The change to an exemption limit is not itself a calculation of each worker’s final tax bill.
A separate proposal and an inflation benchmark frame the debate
The bill enters a broader 2026 discussion about personal income-tax relief. President Ferdinand R. Marcos, Jr. had called for raising the threshold to ₱350,000 in his State of the Nation Address in July 2026, a lower proposed limit than the ₱400,000 in Gatchalian’s measure.
A separate benchmark came from the Philippine Statistics Authority. In earlier reporting on September 13, 2026, the agency told lawmakers the ₱250,000 threshold would need to reach about ₱356,000 in 2026 to preserve purchasing power.
Those figures describe different points in the debate: the existing ₱250,000 threshold, the agency’s estimated purchasing-power benchmark, Marcos’ call for ₱350,000 and the bill’s proposed ₱400,000. They are not enacted limits.
The proposal would replace the current threshold only if it becomes law. Until then, the tax-free income limit remains ₱250,000.
