Philippine President Ferdinand Marcos Jr urged Congress to pass measures that would ease the tax burden on middle-class Filipinos during his fifth State of the Nation Address on Monday, July 27.
This includes expanding the income tax exemption to cover workers earning up to P350,000 annually.
He said the proposed tax relief aims to allow workers to keep more of their own hard-earned income as households cope with rising living costs.
Expanded income tax exemption
This marked the first major legislative request Marcos made in his SONA, which had been delivered mostly in Filipino.
During the speech, Marcos ensured that he had not forgotten the middle class after reporting about the benefits and programmes for low-income Filipinos.
“So, to ensure the continued progress of the middle class amidst the lingering effects of the crisis, we will pursue tax relief measures that promote growth, that generate revenue and advance equity toward socio-economic sustainability,” he said.
“As special protection and to allow them to benefit more from the income they worked hard to earn, I call on Congress to pass laws that will provide some relief from the taxes they pay.”
He then asked Congress to pass laws that will widen the scope of income tax exemption.
Currently, only those earning PHP250,000 or less per year are exempt from paying income tax.
Furthermore, Marcos asked Congress to exempt small businesses from the minimum corporate income tax.
He also proposed granting tax amnesty on unpaid income, estate, donor and value-added taxes, including the corresponding penalties.
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Lower electricity costs
The president then brought up the rising electricity charges.
“My fellow Filipinos, amid all the initiatives we are undertaking in the energy sector, the government clearly recognises the public’s call to lower electricity prices in the country,” he said.
He then asked Congress to pass the law that would support the use of renewable energy
“First, to make the installation of solar panels and battery storage systems in homes simpler, easier, and more affordable, I am asking Congress to help pass the Sariling Kuryente Act.”
The president then received a standing ovation after demanding the removal of the systems loss charges in electricity bills.
“I believe it is time to remove the systems loss charges that are being passed on to consumers. These charges are included in consumers’ electricity bills and are even subject to value-added tax,” Marcos said.
He called Congress to immediately amend the Electric Power Industry Reform Act (EPIRA) to bar power distributors from passing systems loss charges and the associated value-added tax on to consumers.
“Consumers are not responsible for why systems loss occurs. Therefore, it is not right that they should be made to pay for it.”
Flood control scandal update
Beyond tax and electricity reforms, Marcos used his 2026 SONA to deliver updates on the flood control scandal.
“We thoroughly examined the evidence and followed it wherever it led. We did everything necessary to get to the bottom of the matter,” he said.
“The first cases have already been filed, and several individuals have been jailed, including contractors, high-ranking officials, and even legislators.”
The president also announced that more than PHP800 million of the nearly PHP20 billion in recovered assets linked to the flood control scandal has already been returned to the government.
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Ombudsman cases against Romualdez
For the first time, Marcos addressed the impending charges against his cousin, former House of Representatives Speaker Martin Romualdez.
He explained that the Office of the Ombudsman is set to file cases against Romualdez, who had been accused of involvement in the anomalous flood control ghost projects that sparked protests in the country.
“Painful as it is for me, we must do what is right. I am not the president of my family, nor the president of my friends. I am the President of the Philippines, and my duty is to you, my fellow Filipinos,” Marcos said.
The Ombudsman is an independent constitutional body responsible for investigating and prosecuting government officials accused of graft, corruption and other offences.
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