RMC No. 23-2026, released on March 30, addresses certain provisions in Revenue Regulations (RR) 13-2025, which consolidated the rules for claiming tax incentives under the Adopt-a-School Act (RA 8525), the EBET Framework Act (RA 12063), and the Tax Code, The circular aims to encourage more companies to participate in these programs and help public schools and technical institutions upgrade facilities and training programs.

Key clarifications

Under the EBET Act, only enterprises are eligible to implement EBET programs. The BIR clarified that the term “technical-vocational institutions” in RR 13-2025 refers exclusively to enterprises registered with TESDA to operate an EBET framework. Academic institutions are not covered by this designation.

The circular also provides guidance on calculating tax incentives. “Additional deduction” refers to a deduction on top of the regular allowable deductions under Section 34 of the Tax Code. Until December 31, 2027, enterprises can claim 150% of actual training expenses, which includes 100% of the actual cost plus an additional 50% deduction. Starting January 1, 2028, the additional deduction will rise to 75% of training expenses, subject to a cap of 5% of total direct labor expenses or ₱25 million per year, whichever is lower.

RMC 23-2026 clarifies the treatment of training expenses covered by scholarships. EBET programs may be subsidized through scholarships, with general programs covering training costs, assessment costs, and training support funds, while apprenticeship and upskilling programs cover only training and assessment costs. Only expenses actually incurred and shouldered by the enterprise are deductible, while costs funded by third-party scholarships are excluded. Unclaimed EBET incentives cannot be carried over and are forfeited after the applicable taxable year.

The circular also addresses donations under the Adopt-a-School Program. Tax incentives under EBET and Adopt-a-School are mutually exclusive, meaning enterprises may claim only one type of tax incentive for a particular expense or donation. Private entities that adopt public schools can deduct contributions directly incurred for the program, with an additional 50% deduction. These contributions are exempt from donor’s tax. For foreign donations, VAT and excise tax are assumed by TESDA or the Department of Education and the Commission on Higher Education. Local donations may be subject to VAT if they are considered a “transaction deemed sale” of goods originally intended for sale; otherwise, such transfers are VAT-exempt.

Purpose and Impact

The consolidated regulations and RMC are designed to incentivize companies to actively participate in education and skills development initiatives, helping address the mismatch between the labor market’s needs and the country’s workforce capabilities. Under the Tax Code, registered enterprises may claim a 50% additional deduction on labor expenses and a 100% additional deduction on training expenses incurred during the taxable year. The 100% deduction applies only to training provided to Filipino employees directly engaged in the enterprise’s production of goods or services.

For enterprises implementing a registered EBET framework, RR 13-2025 outlines the specific incentives available to technical-vocational institutions, reinforcing the government’s goal of fostering private-sector collaboration in education and workforce development.

Philippine Exporters Confederation, Inc. (PHILEXPORT) President Sergio Ortiz-Luis Jr. said suspending or removing excise taxes on fuel products could reduce pump prices by roughly P6 to P10 per liter.

He said the government could also consider lowering VAT on fuel and electricity to provide additional relief.

“Lowering the value-added tax on fuel and electricity would help cushion the impact, even if the excise tax is removed. This is meant to prevent fuel prices from rising too much,” Ortiz-Luis said in Filipino during an interview on DZAR 1026 SMNI Radio.

Ortiz-Luis warned that a sharp increase in gasoline prices would likely fuel inflation and raise costs across multiple sectors.

“If gasoline prices increase significantly, it will drive inflation and make things more difficult for everyone. Logistics costs will rise, companies will face higher expenses, and workers will also be affected. Without subsidies, many people will struggle,” he said.

However, Ortiz-Luis noted that exporters previously did not support calls to reduce VAT, even before the latest Middle East tensions, because the benefits would likely favor heavy spenders and large corporations rather than lower-income households.

“Lowering VAT would not necessarily benefit the poor. The savings would mostly go to those who spend more—large companies and wealthier consumers,” he said.

The PHILEXPORT chief also warned that sustained increases in oil prices, driven by geopolitical tensions in the Middle East, could force some businesses to shut down and result in job losses.

He said companies are already grappling with rising operating expenses as fuel prices increase, noting that fuel imports are paid in US dollars.

“Even our advantage of having many overseas Filipino workers sending remittances home could be affected if some of them are impacted by the situation and send less money. At the same time, the peso’s purchasing power continues to decline because we are paying more dollars for fuel imports,” Ortiz-Luis said.

He expressed hope that the conflict in the Middle East would not drag on, stressing the importance of conserving fuel and exploring alternative energy sources.

“If we can find alternative ways to generate power and electricity, then that would be good,” he added.