Manila: Department of Economy, Planning, and Development: Secretary Arsenio Balisacan said he is in favor of reducing taxes but noted that an alternative source of revenue should be in place to make sure that government spending on infrastructure and social services will not be affected. In an interview on the sidelines of the press briefing on the first quarter performance of the Philippine economy on Thursday, Balisacan said the proposal to adjust the income tax exemption threshold will increase the purchasing power of Filipinos but this will likely have an impact on government services.

According to Philippines News Agency, Balisacan expressed concern over balancing the reduction of taxes with the need to fund critical projects. "Reduction of taxes is a ticklish issue for economic managers because our people want better infrastructure, more schools, more hospitals, more services. And if you remove those taxes, how are you going to support those important, critical projects that are especially needed by the poor and low-income groups," he said.

Filed by Sen. Sherwin Gatchalian, Senate Bill 56, or the Granting Increase in Take-Home Pay for All Working Filipinos Act, proposes to raise the annual income tax exemption threshold to PHP400,000 from PHP250,000. The bill also seeks to increase the cap on tax-free bonuses to PHP150,000 from the current PHP90,000.

Balisacan reiterated his support for reducing taxes but emphasized the necessity of finding alternative revenue sources. "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. And unless we are able to do that, what you remove might actually hurt the very group that you are trying to help," he stated.