Senate President Francis Escudero has proposed a set of measures aimed at strengthening micro, small, and medium enterprises (MSMEs), which account for 67% of total employment in the Philippines.
His initiatives include exempting MSMEs from income tax for their first three years and allowing a 25% deduction on labor expenses from taxable income.
Escudero also proposes lowering the optional tax on gross sales from 8% to 5% and introducing a simplified withholding tax system with a two-tier rate: 1% for goods and 2% for services.
To improve access to financing, he seeks the revival of a mandatory credit allocation for MSMEs by financial institutions for the next 10 years.
These reforms aim to provide financial relief, stimulate business growth, and reinforce MSMEs’ role as a key driver of the national economy.
Source: PhilNews24 | July 2, 2025
