A senator has filed Senate Bill No. 2047, a legislative measure aimed at providing immediate and long-term financial relief to millions of workers and the middle-class families.
Senator Bam Aquino’s bill proposes a strategic reduction of the Value-Added Tax (VAT) from 12% to 10%, targeting a direct decrease in the cost of essential goods and services.
As the conflict in the Middle East continues to drive global crude prices toward record highs, this bill emerges not just as a tax adjustment but as an economic lifeline for the “working class heroes” of the nation.
Aquino’s “Reducing the Value-AddedTax (VAT) from 12% to 10%” is a landmark reduction of the VAT from 12% to 10%, aiming to provide immediate financial breathing room for ordinary workers, and the often-overlooked middle class.
The bill seeks to amend the National Internal Revenue Code to lower the cost of goods and services across the board—including petroleum products—effectively increasing the “real wages” of Filipinos without requiring businesses to mandate salary hikes.
The senator emphasized that while the government often focuses aid on the poorest of the poor through programs like 4Ps, the middle class—those earning between P15,200 and over P100,000 is being left to weather the economic crisis.
“Yung transport sector, yun ho yung talagang natatamaan. The second are agricultural workers, farmers, and fishermen. Kasi alam natin kung kulang yung tulong sa kanila, either bababa yung production, at nakakabahala. DSWD has talked about, topping up current programs. I guess 4Ps po yung pinag-uusapan natin diyan, Meron pa po bang ibang sektor na binibigyan ng special focus in this next few weeks or next few months? Wala na. Yung fourth of course, is yung napakalawak na middle class. So we need to find support for our countrymen na nasa gantong level, kung aabot nga ‘to ng isa pang taon. Six months to one year pa ito. Anong tulongang pwede nating ibigay sa mga kababayan natin apart from the specific sectors?,” Aquino explained.
Aquino pointed out that even families with two minimum-wage earners, bringing in around P30,000 to P36,000 a month are struggling to keep up.
“This crisis is affecting so many of our countrymen. We also need something sweeping… Kasi ito pong kumikita ng fifteen thousand two hundred pesos, sabihin mo na hanggang fifty thousand o ano ba si middle, middle income, hanggang sixty-three thousand, wala naman po programa talaga para sa kanila… Wala namang programa para diyan, ‘di ba? This encompasses near poor to your lower middle income to your maybe part of the middle of the middle income. Sila rin po talagang nangangailangan rin ng tulong,” he said.
The proposed 2% reduction in VAT is designed to create a ripple effect of relief across the economy. By lowering the tax on essential expenses from grocery items to transportation and utilities, the bill aims to stabilize consumer spending.
Aside from lowering prices, he said that the reduction in VAT will help Filipinos gain the capacity to keep up with the rising cost of goods and cover their daily expenses. Families will have more of their income left over to use for other needs, which will help support businesses, protect jobs, and stimulate economic activity.
While the VAT reduction can provide immediate relief, Sen. Aquino emphasized that the government also need to ensure that the collection and utilization of taxes are handled properly so that funds are not wasted and are directed toward the right purposes while safeguarding the welfare of Filipinos.
“Bukod sa pagpapababa ng presyo, makatutulong ang pagbawas sa VAT para mas magkaroon ng kakayahan ang mga Pilipino na makasabay sa pagtaas ng bilihin at matustusan ang kanilang pang-araw-araw na gastusin. Mas marami ng matitira na maari nilang magamit sa ibang pangangailangan, upang masuportahan ang mga negosyo, maprotektahan ang mga trabaho, at mapasigla ang aktibidad ng ekonomiya. Bagama’t makapagbibigay ng agarang ginhawa ang pagbawas sa VAT, kailangan din nating tiyakin na maayos ang pangongolekta at paggamit ng buwis para hindi nasasayang ang pondo, at napupunta ito sa tama, habang napapangalagaan ang kapakanan ng mga Pilipino,” he added.
Among the benefits expected from SB 2047 are lower fuel pump prices, which currently carry a tax burden of over 20% from VAT and Excise tax.
It will also increase disposable income for families, which can be used to support local businesses and protect jobs, providing a long-term solution to inflation instead of just a temporary subsidy.
Aquino argues that the government must act now to prevent a total erosion of the middle-class purchasing power by reducing VAT and the measure is a concrete step toward making the cost of living more manageable, and supporting a more inclusive and resilient economy.
This bill is the latest in a series of pro-consumer measures from Sen. Aquino. He recently co-sponsored Republic Act No. 12316, which gives the President emergency powers to suspend or reduce petroleum excise taxes. He also previously filed Senate Bill No. 265, seeking the total abolition of excise taxes on diesel, kerosene, and LPG under the TRAIN Law.
He believes that by slashing VAT is betting on the Filipino worker, ensuring that their hard-earned income goes further in securing their family’s future.
