Balisacan open to tax relief, wage adjustments

Upgrade to High-Speed Internet for only ₱1499/month!

Enjoy up to 100 Mbps fiber broadband, perfect for browsing, streaming, and gaming.

Visit Suniway.ph to learn

May 8, 2026 | 12:00am

MANILA, Philippines — The Department of Economy, Planning and Development (DepDev) is open to tax cuts and wage adjustments to help workers cope with elevated prices, but warned that any relief measure should be sustainable and should not come at the expense of jobs, revenues and critical public services.

Asked about a proposal to raise the income tax deduction threshold to P400,000 from P230,000, DepDev Secretary Arsenio Balisacan said such a move would increase the purchasing power of workers, particularly those from lower income groups.

However, he said tax cuts remain a difficult issue for economic managers as the government also needs revenues to fund infrastructure, schools, hospitals and other critical services.

“I am in favor of reducing taxes, especially those that burden the poor and the middle class, but we have to find replacement for very much needed tax revenues,” Balisacan said.

“Unless we are able to do that, what you remove might actually hurt the very group that you are trying to help,” he added.

Balisacan said Congress should identify replacement revenue measures if it pushes through with any tax reduction.

“We always urge Congress that if they have to remove a tax, they would have to find a way of generating replacement for those. Because otherwise, don’t ask for better roads, don’t ask for more rail, because how will the government support that?” he said.

The remarks came as household spending slowed sharply in the first quarter while inflation surged to a three-year high in April, reflecting the impact of elevated prices and weak consumer sentiment.

The Philippine Statistics Authority reported that household final consumption expenditure grew by just three percent in the first quarter, slower than the 5.3 percent expansion in the same period last year. Inflation also surged to 7.2 percent in April from 4.1 percent in March.

The broader economy also slowed to 2.8 percent in the first quarter from 5.4 percent a year earlier, its weakest performance since the 3.8 percent contraction in the first quarter of 2021.

Meanwhile, the economic team is also weighing other measures to help workers cope with elevated prices, including possible wage adjustments.

Asked about proposals from some lawmakers to increase the minimum wage, Balisacan said the government is “very concerned about the welfare of our workers given the shocks that the economy is facing.”

He said the government is pursuing interventions under the Uplift program, including income support for vulnerable sectors and the poor, apart from the consideration of wage increases.

“Insofar as wage negotiations are concerned, our position is that, as much as possible, these should be conducted among the parties directly involved in the labor market, the employers, workers and government,” Balisacan said.

He said workers should be properly represented in these negotiations, with sufficient information to ensure that wage increases are viewed in the broader context of the labor market.

Balisacan said any wage increase should be “not just temporary, but sustainable” and should “promote efficiency and growth in various areas of the country.”