Bill institutionalizing productivity incentives for workers OK'd on 3rd reading

The House of Representatives has overwhelmingly approved on third and final reading a bill that, if enacted, would mandate all enterprises in the country employing 10 or more workers to establish a productivity incentives program for their employees.


Passed during plenary session Monday afternoon, Feb. 6 was House Bill (HB) No. 6683 or the “Enterprise Productivity Act”. The measure repeals Republic Act (RA) No. 6971 or the Productivity Incentives Act of 1990.

Deputy Speaker and Davao City 3rd district Rep. Isidro Ungab, who presided over Monday's session, declared the bill as approved on third and final reading after it received 242 affirmative votes during nominal voting. It received three negative votes and zero abstentions.

“This is to recognize both the Filipino workers’ hard work and the enterprises’ willingness to reward the productivity of labor. Together, they make up a strong pillar of our economy, and this measure pays tribute to their immeasurable contribution to nation-building,” House Speaker Martin Romualdez said in a statement.

The bill also establishes a system of tax incentives for enterprises, small or large, that will successfully establish and implement a productivity incentives program for their employees.

Provisions of the measure apply to all business enterprises “with or without existing and duly recognized collective bargaining agreements. It shall cover all employees and workers regardless of their position, designation, or status, and the manner by which their wages are paid".

It mandates the establishment of a Productivity Incentives Committee made up of representatives from the management and from the employees, whether or not a labor organization or employees’ association exists in the enterprise.

“The Committee shall develop the productivity incentives program. Whenever gains or savings are realized from the implementation of the productivity improvement program, the management shall initiate the discussion on the sharing thereof,” read Sec. 6 of the measure.

“Productivity incentives program as provided in this Act shall be based on the implemented productivity improvement program, and without prejudice to any company policy, program, contract, or collective bargaining agreement providing for higher productivity incentives,” it added.

As for tax deductions, private establishments are entitled to deduct 50 percent of the total productivity incentives granted to their employees and 50 percent of the total grants for training and special studies given to employees pursuant to the productivity incentives program prepared by the Committee from their gross income.

“The Bureau of Internal Revenue shall establish a system for availing of tax deductions. It shall maintain and furnish the National Wages and Productivity Commission (NWPC) with an annual record of business enterprises that avail of tax deductions under this Act for program monitoring,” HB No.6683 stated.

As micro, small, and medium enterprises may fall under the purview of the provisions of the bill if it becomes law, banking institutions are mandated to “provide a loan facility or extend a credit window to at an interest rate lower than the prevailing rate that implement a productivity improvement program".