Philippine Salaries Expected to Increase by 5.5% this 2025
Other Relevant Tax Updates:
- TAX & BUSINESS-RELATED NEWS [JANUARY 1-7]
- SSS RELEASES THE NEW CONTRIBUTION RATES FOR 2025
- DOLE REMINDS THE PUBLIC ON THE UPCOMING YEAR-END COMPLIANCE REPORT
- COURT OF TAX APPEALS CASES
- SEC LEGAL OPINION ON ANTI-DUMMY LAW
I. TAX & BUSINESS-RELATED NEWS [JANUARY 1-7]
- John Hay on lockdown as BCDA takes over
- COA flags SSS ‘leniency’ amid failure to collect P89 billion from delinquent employers
- Philippine Salaries Expected to Increase by 5.5% This 2025
- SEC drafts rules on crypto services
- SSS defends contribution hike amid calls to suspend higher rate
- Ceza insists it is exempt from Pogo ban
- Plan Your Year: Official Philippine Holidays and Long Weekends for 2025
- IMF asks BSP to disclose securities portfolio
- Gov’t employees to get annual P7,000 medical allowance starting 2025
- Colliers: Clearing of MM residential inventory to take 6 years
- DILG closes COA-flagged trust fund accounts
- Cruise ship makes maiden call at Subic Bay
- PH closes 2024 with stronger manufacturing growth
- New cruise terminal to rise in Puerto Galera
- Minimum wage up in 14 regions, benefits 5M workers
- SM to integrate 15-minute city concept in townships
II. SSS RELEASES THE NEW CONTRIBUTION RATES FOR 2025
The Social Security System (SSS) has already circularized the updated table of contributions to effect the rate increase effective January 1, 2025, pursuant to Republic Act 11199, otherwise known as the Social Security Act of 2018. Under the said law, it mandates the SSS to increase its contribution rate every two (2) years with the final increase in 2025.
III. DOLE REMINDS THE PUBLIC ON THE UPCOMING YEAR-END COMPLIANCE REPORT
DOLE has advised the public on the submission of the following year-end reports:
- 13thMonth Pay Report with deadline on or before January 15, 2025, for all companies not otherwise exempted by 13th Month Pay Law
- Annual Establishment Report on Wages with deadline on or before January 31, 2025
DOWNLOAD 13TH MONTH PAY REPORT LINK
DOWNLOAD ANNUAL ESTABLISHMENT REPORT
IV. CTA CASES
BILLING STATEMENT DOES NOT CONSTITUTE AN ASSESSMENT CONTEMPLATED UNDER SECTION 196 OF THE LGC FOR REFUND PURPOSES
Petitioner Taguig City Government filed a Petition for Partial Review seeking to reverse and set aside the earlier Decision and Order of the Regional Trial Court (RTC) of Taguig City holding the Respondent Kensington Place Condominium Corporation not liable to contractor’s tax and that the refund was timely filed. The Petitioner argued that the Billing Statement issued to the Respondent constituted an assessment, thus triggering the 60 days under Section 195 of the Local Government Code (LGC) within which to file a refund claim. The Respondent’s refund claim was filed beyond this period, making the assessment final and unappealable. In addition, The Respondent is liable for Local Business Tax (LBT) under Section 75 of the Taguig Revenue Code (TRC), as amended, classifying it as a contractor. On the other hand, the Respondent countered that Section 196 of the LGC, which allows a two-year period for filing refund claims, is applicable. It argued that the refund was timely filed within this period. Likewise, as a non-stock, non-profit corporation, it is not engaged in business for profit and should not be classified as a contractor liable for LBT. In ruling, the Court held in favor of the Respondent, finding that Section 196 of the LGC applies, allowing a two-year period for filing refund claims. Furthermore, the Respondent, as a non-stock, non-profit corporation, is not engaged in business for profit and thus is not liable for LBT. The Billing Statement was not considered an assessment under Section 195 of the LGC. Consequently, the Court DENIED the Petition, affirming the lower courts’ decisions that the Respondent’s refund was timely and that it is not liable for LBT on contractors. The Court emphasized that condominium corporations, like the Respondent, are generally exempt from local business taxation under the LGC, irrespective of any local ordinance to the contrary. [TAGUIG CITY GOVERNMENT VS. KENSINGTON PLACE CONDOMINIUM CORPORATION, CTA EN BANC CASE NO. 2807, DECEMBER 3, 2024]
[THE THREE-YEAR PERIOD FOR THE COLLECTION OF THE ASSESSED TAX BEGINS TO RUN ON THE DATE THE ASSESSMENT NOTICE IS RELEASED, MAILED, OR SENT TO THE TAXPAYER] [THE OMMISSION OF THE SPECIFIC DETAILS OR COMPUTATIONS EXPLAINING THE ASSESSED AMOUNT VIOLATES THE TAXPAYER’S RIGHT TO DUE PROCESS] [THE TAXPAYERS SHALL BE INFORMED IN WRITING OF THE LAW & THE FACTS ON WHICH THE ASSESSMENT IS MADE; OTHERWISE, THE ASSESSMENT SHALL BE VOID]
Petitioner Hawaiian-Philippine Company filed a Petition for Review seeking the cancellation of the Assessment Notices issued by the Respondent Commissioner of Internal Revenue (CIR) assessing for deficiency taxes for the fiscal year (FY) ending September 30, 2017. The Petitioner argued that the Respondent’s right to assess has already prescribed. In addition, the assessments are void, asserting that the same lacks factual and legal basis. On the other hand, the Respondent contended that the assessments were made in accordance with prevailing laws and rules, as they present the factual and legal basis for the assessments. In ruling, the court cited the case of CIR vs. Villanueva, Jr. wherein the Supreme Court affirmed that the sending of the Formal Letter of Demand (FLD)/Final Assessment Notice (FAN) to the taxpayer is when the assessment is made. Further, Sections 203 and 222 of the 1997 Tax Code, as amended, clarify that the assessment refers specifically to the service of the FAN upon the taxpayer. Following this, in the case at bar, the assessments are considered made on December 22, 2020, when the FAN/FLD was served to and received by the Petitioner. However, during the surge of COVID-19, the BIR issued Revenue Memorandum Circular (RMC) No. 136-220, which extended the prescriptive period to assess in areas placed under ECQ or MECQ. As per examination, the periods to assess have partly prescribed and only the deficiency income tax (for FY ending September 2017), VAT (for 3rd and 4th quarters), EWT and FWV (for the periods from May to September 2017) shall be retained in determining Petitioner’s tax liabilities. Nevertheless, the Court finds that the Petitioner is not liable for the remaining deficiency taxes for failure of the Respondent to provide the details of the foregoing assessment items. As a final note, the BIR’s right to collect deficiency taxes must stem from a valid assessment. While Respondent’s findings enjoy a presumption of correctness, it is an established doctrine that the same must still be based on actual and verifiable facts, not mere presumptions. Thus, the Petition was GRANTED, and the Assessment Notices were CANCELLED and SET ASIDE. [HAWAIIAN-PHILIPPINE COMPANY VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10726, NOVEMBER 13, 2024]
V. SEC LEGAL OPINION ON ANTI-DUMMY LAW
[ANTI-DUMMY LAW DOES NOT BAR NON-EXECUTIVE CHAIRMANSHIP FOR FOREIGNERS] [FOREIGNERS CAN SERVE AS NON-EXECUTIVE CHAIRMAN IN PARTIALLY NATIONALIZED FIRMS] [SEC CONFIRMS LEGALITY OF NON-EXECUTIVE ROLES FOR FOREIGNERS]
V Construction Corporation (VCC), a domestic corporation engaged in such activities, appointed an Indian national as Chairman. Under the corporation’s by-laws, the Chairman’s role was non-executive and limited to presiding overboard meetings, with the President holding executive authority. It sought the SEC’s opinion on two issues: (1) whether the Anti-Dummy Law disqualifies a foreigner from being Chairman in this context; and (2) whether SEC-OGC Opinion No. 16-12 (2016) supersedes the earlier SEC Opinion issued on May 15, 1985, which allowed foreigners to serve as non-executive Chairmen. In reply, the SEC has simplified the issue of whether a foreigner could serve as Chairman of a domestic corporation engaged in a partially nationalized economic activity without violating the Anti-Dummy Law (Section 2-A, Commonwealth Act No. 108). Accordingly, a foreigner is not disqualified from serving as Chairman in a partially nationalized corporation, provided the position does not involve executive functions. The Anti-Dummy Law aims to prevent foreign participation in the management, operation, administration, or control of nationalized or partially nationalized businesses unless expressly allowed, such as in technical roles. However, it does not prohibit foreigners from holding non-executive roles like presiding over board meetings. The SEC clarified that SEC-OGC Opinion No. 16-12 does not invalidate the 1985 Opinion. The 2016 Opinion applies only to cases where a foreigner simultaneously acts as President and Chairman, performing executive functions. The 1985 Opinion remains valid for instances where the Chairman’s role is limited to non-executive functions. In light of this, appointing a foreigner as Chairman in a partially nationalized corporation is permissible under the Anti-Dummy Law if the role is purely non-executive. This interpretation aligns with the law’s intent to prevent foreign dominance in executive or managerial positions while allowing proportional participation of foreign nationals in corporate boards. [SEC OFFICE OF THE GENERAL COUNSEL OPINION NO. 24-34, NOVEMBER 06, 2024]
John Hay on lockdown as BCDA takes over [Philippine Daily Inquirer, January 7, 2025]
SC’s decision reapplied a 2015 arbitral decision that voided the development contract over John Hay, ordered the return of the developer’s P1.42 billion expenses, and allowed the government to regain control of all commercial properties.
https://business.inquirer.net/500074/john-hay-on-lockdown-as-bcda-takes-over
COA flags SSS ‘leniency’ amid failure to collect P89 billion from delinquent employers [ABS-CBN News, January 6, 2025]
In its annual audit report, COA found that SSS has only collected P4.581 billion or 4.89 percent of the total P93.747 billion established collectibles.
The Highest Paying Jobs In The Philippines For 2025 [Cosmopolitan, January 4, 2025]
According to Statista, as reported by Inquirer.net, the IT services in the Philippines is projected to grow with a market volume of USD3.6 billion by 2029. This is no longer surprising because in October 2024, PasaJob revealed that “Technology and Digital Innovation” are at the forefront of in-demand jobs in the Philippines from 2025 to 2030, closely followed by Marketing.
Philippine Salaries Expected to Increase by 5.5% This 2025 [Spot.PH, January 3, 2025]
Based on the 2022 Occupational Wages Survey by the Philippine Statistics Authority (PSA), the average monthly wage for full-time workers in the Philippines is P18,423. A 5.5% increase would translate to an additional P1,013 per month.
SEC drafts rules on crypto services [Philippine Daily Inquirer, January 3, 2025]
Under the proposed rules, which the public may comment on until Jan. 18, a person or company may only provide crypto asset services in the country after securing a license from the SEC.
https://business.inquirer.net/499565/sec-drafts-rules-on-crypto-services
SSS defends contribution hike amid calls to suspend higher rate [ABS-CBN News, January 3, 2025]
In 2019, the contribution rate was set at 12 percent, in 2021 it rose to 13 percent and increased to 14 percent in 2023. The rate will be shared by the employer and the employee. For the 15 percent contribution rate this year, 10 percent will be shouldered by the employer, while the employee pays the remaining 5 percent.
Ceza insists it is exempt from Pogo ban [Inquirer Plus, January 3, 2025]
Ceza administrator Katrina Ponce Enrile reiterated the agency’s stance that its licensees, including iGaming and interactive gaming support service providers, operate under a distinct framework and are not affiliated with Pogos regulated by the Philippine Amusement and Gaming Corp. (Pagcor).
https://plus.inquirer.net/news/ceza-insists-its-exempt-from-pogo-ban/
Plan Your Year: Official Philippine Holidays and Long Weekends for 2025 [Good News Pilipinas, January 2, 2025]
Filipinos can now plan their 2025 celebrations and vacations with the release of the official list of holidays in the Philippines. Proclamation 727 and Proclamation 729 detail 20 holidays, including regular holidays, special non-working days, and additional special working and non-working days. Good News Pilipinas has mapped the long weekends, offering opportunities for extended breaks.
IMF asks BSP to disclose securities portfolio [Philippine Daily Inquirer, January 2, 2025]
The International Monetary Fund (IMF) wants the Bangko Sentral ng Pilipinas (BSP) to consider disclosing more information about its balance sheet strategy to give the market a sense of certainty even during normal times.
https://business.inquirer.net/499476/imf-asks-bsp-to-disclose-securities-portfolio
Gov’t employees to get annual P7,000 medical allowance starting 2025 [The Philippine Star, January 2, 2025]
This allowance is part of President Ferdinand Marcos Jr.’s Executive Order No. 64, which mandates an increase in the salaries and benefits of government workers, including the provision of an annual medical allowance to support their access to health maintenance organization (HMO) benefits.
Colliers: Clearing of MM residential inventory to take 6 years [Philippine Daily Inquirer, January 2, 2025]
In 2025, the residential vacancy rate is seen to reach 25 percent from 17.7 percent in the third quarter, as the exit of Philippine offshore gaming operators is expected to have an “adverse effect” on the market, particularly in the Bay Area and Makati.
https://business.inquirer.net/499474/colliers-clearing-of-mm-residential-inventory-to-take-6-years
DILG closes COA-flagged trust fund accounts [The Philippine Star, January 2, 2025]
On December 23, state auditors flagged the bank accounts with a total of P12,983,556.13. According to the Commission on Audit, they exist notwithstanding that their creation and retention as of year-end 2023 “have no legal basis.”
https://www.philstar.com/headlines/2025/01/02/2411377/dilg-closes-coa-flagged-trust-fund-accounts
Cruise ship makes maiden call at Subic Bay [The Manila Times, January 2, 2025]
Subic Bay Metropolitan Authority (SBMA) Chairman and Administrator Eduardo Jose Aliño said that the Silversea Cruises is part of the prestigious Royal Caribbean Group based in Monaco.
https://www.manilatimes.net/2025/01/02/regions/cruise-ship-makes-maiden-call-at-subic-bay/2029155
PH closes 2024 with stronger manufacturing growth [GMA News Online, January 2, 2025]
The Philippine manufacturing sector continued to expand in December to close the year with a rate last seen in April 2022 on the back of higher output and new orders, results of the latest survey conducted by S&P Global released on Thursday showed.
New cruise terminal to rise in Puerto Galera [The Philippine Star, January 1, 2025]
The Philippine Ports Authority (PPA) is bidding out the P706.05-million contract to build a port dedicated for cruise arrivals in Puerto Galera, Oriental Mindoro.
https://www.philstar.com/business/2025/01/01/2411028/new-cruise-terminal-rise-puerto-galera
Minimum wage up in 14 regions, benefits 5M workers [Cebu Daily News, January 1, 2025]
Close to five million private sector workers who are minimum wage earners will directly benefit from wage increases approved by 14 Regional Tripartite Wage Productivity Boards (RTWPBs) in 2024.
https://cebudailynews.inquirer.net/614906/minimum-wage-up-in-14-regions-benefits-5m-workers
SM to integrate 15-minute city concept in townships [The Philippine Star, January 1, 2025]
Under a 15-minute city concept, SM Prime’s multifaceted approach to building design addresses the need to have retail, residential, commercial and leisure spaces in one seamlessly connected area.
https://qa.philstar.com/business/2025/01/01/2411016/sm-integrate-15-minute-city-concept-townships
Gatchalian: ‘no point crafting Bayanihan 3’ [Manila Bulletin, March 8, 2021]
Congress has no reason to pass another big-time COVID-19 economic stimulus package to revive the country’s economy, Senator Sherwin Gatchalian said on Monday.
Source: https://mb.com.ph/2021/03/08/gatchalian-no-point-crafting-bayanihan-3/
Indian ambassador links up with PEZA, bares high hopes for PH economy [Manila Bulletin, March 8, 2021]
The Philippine Economic Zone Authority (PEZA) has strengthened its partnership with India in attracting more investors to the Philippines as part of its efforts to revive the country’s economy.
Source: https://mb.com.ph/2021/03/08/indian-ambassador-links-up-with-peza-bares-high-hopes-for-ph-economy/
House committee endorses bill authorizing PDIC to increase deposit insurance coverage [Manila Bulletin, March 8, 2021]
The House Committee on Banks and Financial Intermediaries has recommended passage of a measure granting the Philippine Deposit Insurance Corporation the power to increase the maximum deposit insurance coverage (MDIC) that currently stands at P500,000.
Zonal valuation alone not sole basis of actual market value of land for just compensation – SC [Manila Bulletin, March 7, 2021]
Zonal valuation of a piece of land set by the Bureau of Internal Revenue (BIR) “cannot be the sole basis of just compensation” in the government’s expropriation of privately-owned landholdings.
Tax incentives, smuggling make ecozones the country’s ‘trillion peso blackhole’ – Salceda [Manila Bulletin, March 6, 2021]
Believed to be haven for smuggling activities notwithstanding the hundred of billions in tax incentives granted to them by government, the country’s economic zones have been described in the House of Representatives as the country’s “trillion-peso blackhole” of unrealized revenues.
Duterte reduces, condones real property taxes of independent power producers [ABS-CBN News, March 5, 2021]
President Rodrigo Duterte signed on Thursday an executive order reducing and condoning real property taxes and penalties assessed on power-generation facilities of independent power producers (IPPs) under Build-Operate-Transfer contracts with government-owned or controlled operations.
BSP seen keeping interest rates steady amid expectations of lower inflation in second half [Philippine Daily Inquirer, March 5, 2021]
The central bank will likely keep its key interest rates unchanged when the policy-making Monetary Board convenes later this month to tackle the recent spike in the country’s consumer prices.
Source: https://business.inquirer.net/318949/bsp-seen-keeping-interest-rates-steady-amid-expectations-of-lower-inflation-in-second-half#ixzz6oVmgflVY
DOLE, employers’ group reject ‘no vaccination, no work’ policy [ABS-CBN News, March 4, 2021]
The supposed “no vaccination, no work” policy of some companies is impractical, the labor department and an employers’ group said Thursday.
Source: https://news.abs-cbn.com/business/03/04/21/dole-employers-group-reject-no-vaccination-no-work-policy
BSP seeks Congress OK of new law to protect financial consumers [Philippine Daily Inquirer, March 4, 2021]
Government regulatory agencies will have to unify efforts to protect Filipino consumer rights under a proposed law meant to pave the way for dispute resolution between retail financial companies and their clients.
US to impose anti-dumping tax on 18 countries [ABS-CBN News, March 3, 2021]
The US Department of Commerce is preparing to tax aluminum sheet exporters from 18 countries after determining Tuesday they had benefited from subsidies and dumping.
Source: https://news.abs-cbn.com/business/03/03/21/us-to-impose-anti-dumping-tax-on-18-countries
SSS to expand digital services amid surge in online transactions [ABS-CBN News, March 3, 2021]
The Social Security System (SSS) is poised to expand its digital services to keep up with a surge in online transactions as well as adapt to the new normal brought about by the COVID-19 pandemic.
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