Review of Productivity Incentives Act (RA 6971)

As part of the DOLE’s legislative agenda, the NWPC crafted amendments to RA 6971 or the Productivity Incentives Act, essentially liberalizing the implementation of plant-level productivity incentive programs. This initiative was based on an earlier assessment by the NWPC in consultation with the social partners which recommended liberalizing the restrictive provisions of the law such as the estimation of the productivity baseline data, sharing scheme and the frequency of distribution of gains.

The amendatory bill maintains the provisions on the creation of a labor management committee, development of productivity incentives program, grant of fiscal incentives, and the role of concerned government agencies such as NWPC, NCMB, TESDA, and BIR.

Meanwhile, the bill proposes the following:

  • Liberalization of provisions of productivity incentives program such as computation of benchmark productivity performance, sharing scheme, and coverage;
  • Issuance of advisories by the RTWPBs to guide establishments in the design and implementation of productivity incentives program, in line with the two-tiered wage system;
  • Inclusion of provision on Productivity Incentives Program (PIP);
  • Deletion of penalty clause;
  • Shortening the period for resolving issues/disputes arising from the implementation of the PIP; and
  • Inclusion of other non-fiscal benefits provided by other different agencies.


This was presented and discussed in various fora like the Tripartite Industrial Peace (TIPC), Tripartite Labor Code Review Committee (TLCRC) and sectoral consultations labor and management groups, academe, and other government agencies.   It was also presented to the Chairperson of the House Committee on Labor and Employment Hon. Karlos Alexei Nograles and Hon. Cong. Francis “Boy Blue” Abaya of the 1st district of Cavite who adopted and sponsored/authored the proposal as a bill.

The bill was presented to the Committee on Labor and Employment last December 2013 for initial deliberation.


All content is in the public domain unless otherwise stated.


Learn more about the Philippine government, its structure, how government works and the people behind it.