The Philippines’ Department of Labor and Employment (DOLE) is backing President Ferdinand R. Marcos Jr.’s proposal to raise the annual income tax exemption threshold for workers to PHP350,000, while stepping up efforts to improve wage protection and productivity among micro, small and medium enterprises (MSMEs).
The proposal was outlined by Marcos in his fifth State of the Nation Address (SONA) on July 27. The President called on Congress to increase the income tax exemption ceiling from PHP250,000 to PHP350,000 in annual salary, a move aimed at providing tax relief to more workers and increasing their take-home pay.
DOLE said the measure aligns with its broader efforts to promote fair and sustainable wage policies while strengthening enterprise competitiveness.
Under Labor Secretary Francis N. Tolentino, the department reported progress in supporting MSMEs during the first half of 2026 through its National Wages and Productivity Commission (NWPC).
Through the Productivity Toolbox initiative, the NWPC has oriented and trained 18,510 MSMEs on productivity improvement approaches, reaching 93% of its annual target. More than 23,000 business owners, managers and workers have also participated in learning programmes focused on improving competitiveness, workplace productivity and enterprise-level improvement plans.
The department has also taken steps to support businesses facing economic pressures. Regional Tripartite Wages and Productivity Boards referred 112 MSMEs to DOLE’s Adjustment Measures Program, while the NWPC processed wage exemption applications from eligible small businesses within the prescribed 45-day period.
Seven newly received applications remain under evaluation within the allowable timeframe.
Meanwhile, the NWPC reached 411,740 small employers, workers and industry stakeholders through advocacy and information services, equivalent to 82% of its annual target.
The initiatives included the Tulong Kaalaman sa Kita at Kakayahan (TKK) programme, learning sessions and Usapang 2Ps 4.0 activities, aimed at helping businesses understand wage policies and adopt productivity-led growth strategies.
The commission also facilitated five wage orders during the reporting period, including two covering private establishments and three for domestic workers.
DOLE said the wage-setting measures are intended to balance worker welfare with the sustainability of businesses.
The NWPC also reported a 100% disposition rate for appeals involving wage orders and wage exemption applications within the required 60-day period.
Alongside these measures, DOLE said it supports the proposed expansion of the income tax exemption to workers earning up to PHP350,000 annually. The department said the measure would raise workers’ take-home pay and contribute to their financial well-being.
The department’s initiatives reflect the government’s wider focus on strengthening worker protection while helping MSMEs improve productivity and remain resilient amid economic changes.