Chapter 4:

Social Political, Economic, and Cultural Issues in the Philippine

History
Lectures Notes for Final Coverage

Evolution of the Philippine Constitution

1897: Constitution of Biak-na-Bato
The Republic of Biak-na-Bato was one of a number of unrecognized insurgent polities which
existed during the time in which the Philippines was under Spanish colonial government as
the Spanish East Indies. It was preceded and succeeded by two similarly unrecognized polities,
the Tejeros government and the Central Executive Committee.

The constitution of the Republic of Biak-na-Bato was written by Felix Ferrer and Isabelo
Artacho, who copied the Cuban Constitution of Jimaguayú nearly word-for-word. It provided for
the creation of a Supreme Council.

On November 1, 1897, the provisional constitution for the Biak-na-Bato Republic was signed.

 The Preamble of the constitution included the statement that

The separation of the Philippines from the Spanish monarchy and their formation into an
independent state with its own government called the Philippine Republic has been the end
sought by the Revolution in the existing war, begun on the 24th of August, 1896; and therefore,
in its name and by the power delegated by the Filipino people, interpreting faithfully their desires
and ambitions, we, the representatives of the Revolution, in a meeting at Biak-na-bato, Nov. 1st.
1897, unanimously adopt the following articles for the Constitution of the State.
1899: Malolos Constitution
The Political Constitution of 1899, informally known as the Malolos Constitution, was
the basic law of the First Philippine Republic.
It was written by Felipe Calderón y Roca and Felipe Buencamino as an alternative to a pair of
proposals to the Malolos Congress by Apolinario Mabini and Pedro Paterno.
After a lengthy debate in the latter part of 1898, it was promulgated on 21 January 1899.
After several battles between the Spanish and Philippine Revolutionary Army, a truce was signed
called the Pact of Biak-na-Bato in 1897.
Emilio Aguinaldo(who had replaced Bonifacio as leader) and other revolutionary leaders
accepted a payment from Spain and went into exile in Hong Kong.
When the Spanish–American War broke out on April 25, 1898, the United
States Commodore George Dewey aboard the USS Olympia sailed from Hong Kong to Manila
Bay leading the Asiatic Squadron of the U.S. Navy.

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On May 1, 1898, the American force defeated the Spanish in the Battle of Manila Bay. Later that
month, the U.S. Navy transported Aguinaldo back to the Philippines.
Aguinaldo took control of the newly re-formed Philippine revolutionary forces and quickly
surrounded Manila on land while the American blockaded the city from the bay.
On June 12, Aguinaldo issued the Philippine Declaration of Independence and followed that with
several decrees forming the First Philippine Republic. 
Elections were held from June 23 to September 10, 1898 for a new national legislature,
the Malolos Congress.

The Political Constitution of 1899 is written in Spanish which was the official language of the
Philippines at the time. It is composed of ninety-three articles divided into fourteen titles, with
further eight articles with transitory provisions, and a final additional article.
The style of the document is patterned after the Spanish Constitution of 1812, which many Latin
American charters from the same period similarly follow. Calderon himself writes in his journal
that the charters of Belgium, Mexico, Brazil, Nicaragua, Costa Rica and Guatemala, in addition
to using the French Constitution of 1793, were also studied as these countries shared similar
social, political, ethnological and governance conditions with the Philippine Islands.

Preamble of the Political Constitution of 1899

We, the Representatives of the Filipino people, lawfully convened, in order to establish justice,
provide for common defense, promote the general welfare, and insure the benefits of liberty,
imploring the aid of the Sovereign Legislator of the Universe for the attainment of these ends,
have voted, decreed, and sanctioned the following:

According to Title II, Article 4 the Government of the Republic is to be popular, representative,
alternative and responsible, and shall exercise three distinct powers: namely, the legislative, the
executive, and the judicial. Any two or more of these three powers shall never be united in one
person or cooperation, nor the legislative power vested in one single individual. 

The First Philippine Republic never gained international recognition and the Malolos

Constitution was never fully implemented across the Philippines.

1935: The Commonwealth Constitution

The Commonwealth of the Philippines was the administrative body that governed

the Philippines from 1935 to 1946, aside from a period of exile in the Second World War from
1942 to 1945 when Japan occupied the country.

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It replaced the Insular Government, a United States territorial government, and was established
by the Tydings–McDuffie Act. The Commonwealth was designed as a transitional administration
in preparation for the country's full achievement of independence.
During its more than a decade of existence, the Commonwealth had a strong executive and a
Supreme Court. Its legislature, dominated by the Nacionalista Party, was at first unicameral, but
later bicameral.
In 1937, the government selected Tagalog – the language of Manila and its surrounding
provinces – as the basis of the national language, although it would be many years before its
usage became general. Women's suffrage was adopted and the economy recovered to its pre-
Depression level before the Japanese occupation in 1942.
The Commonwealth government went into exile from 1942 to 1945, when the Philippines was
under Japanese occupation. In 1946, the Commonwealth ended and the Philippines claimed full
sovereignty as provided for in Article XVIII of the 1935 Constitution.

In December 1932, the U.S. Congress passed the Hare–Hawes–Cutting Act with the premise of

granting Filipinos independence. Provisions of the bill included reserving several military and
naval bases for the United States, as well as imposing tariffs and quotas on Philippine exports.
When it reached him for possible signature, President Herbert Hoover vetoed the Hare–Hawes–
Cutting Act, but the American Congress overrode Hoover's veto in 1933 and passed the bill over
Hoover's objections.
The bill, however, was opposed by the then Philippine Senate President Manuel L. Quezon and
was also rejected by the Philippine Senate.
This led to the creation and passing of a new bill known as Tydings–McDuffie Act, or Philippine
Independence Act, which allowed the establishment of the Commonwealth of the Philippines
with a ten-year period of peaceful transition to full independence – the date of which was to be
on the 4th July following the tenth anniversary of the establishment of the Commonwealth.

A Constitutional Convention was convened in Manila on July 30, 1934, with Claro M. Recto was
elected as president.
The Preamble of the 1935 Commonwealth

“ "The Filipino people, imploring the aid of Divine Providence, in order to establish a
government that shall embody their ideals, conserve and develop the patrimony of
the nation, promote the general welfare, and secure to themselves and their posterity
the blessings of independence under a regime of justice, liberty, and democracy, do
ordain and promulgate this Constitution." ”

The original 1935 Constitution provided for unicameral National Assembly and the President
was elected to a six-year term without re-election. It was amended in 1940 to have a
bicameral Congress composed of a Senate and House of Representatives, as well the creation
of an independent electoral commission. The Constitution now granted the President a four-
year term with a maximum of two consecutive terms in office.

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1973: Constitutional Authoritarianism

The 1973 Constitution, promulgated after Marcos' declaration of martial law, was supposed to
introduce a parliamentary-style government. Legislative power was vested in
a unicameral National Assembly whose members were elected for six-year terms.
The President was ideally elected as the symbolic and purely ceremonial head of state chosen
from amongst the Members of the National Assembly for a six-year term and could be re-elected
to an unlimited number of terms. Upon election, the President ceased to be a Member of the
National Assembly. During his term, the President was not allowed to be a member of a political
party or hold any other office.
Executive power was meant to be exercised by the Prime Minister who was also elected from
amongst the sitting Assemblymen. The Prime Minister was to be the head of
government and Commander-in-Chief of the Armed Forces.
From 16–17 October 1976, a majority of barangay voters (also called "Citizen Assemblies")
approved that martial law should be continued and ratified the amendments to the Constitution
proposed by President Marcos.
The 1976 amendments were:

 an Interim Batasang Pambansa (IBP) substituting for the Interim National Assembly;

 the President would also become the Prime Minister and he would continue to exercise
legislative powers until such time as martial law was lifted.
The Sixth Amendment authorized the President to legislate on his own on an "emergency" basis:
Whenever in the judgement of the President there exists a grave emergency or a threat or
imminence thereof, or whenever the Interim Batasang Pambansa or the regular National
Assembly fails or is unable to act adequately on any matter for any reason that in his judgment
requires immediate action, he may, in order to meet the exigency, issue the necessary decrees,
orders or letters of instructions, which shall form part of the law of the land.
The 1973 Constitution was further amended in 1980 and 1981.
In the 1980 amendment, the retirement age of the members of the judiciary was extended to 70
years.
In the 1981 amendments, the false parliamentary system was formally modified into a French-
style semi-presidential system:

 executive power was restored to the President;

 direct election of the President was restored;
 an Executive Committee composed of the Prime Minister and not more than 14 members
was created to "assist the President in the exercise of his powers and functions and in the
performance of his duties as he may prescribe;" and the Prime Minister was a mere head of
the Cabinet.
 Further, the amendments instituted electoral reforms and provided that a natural born citizen
of the Philippines who has lost his citizenship may be a transferee of private land for use by
him as his residence.

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1998: Constitution after Martial Law

Ruling by decree during the early part of her tenure and as a president installed via the People
Power Revolution, President Corazon Aquino issued Proclamation No. 3 on March 25, 1986
which abrogated many of the provisions of the then 1973 Constitution adopted during the
Marcos regime including the unicameral legislature (the Batasang Pambansa), the office
of Prime Minister, and provisions which gave the President legislative powers. Often called the
"Freedom Constitution," this constitution was only intended as a temporary constitution to
ensure the freedom of the people and the return to democratic rule. A constitutional commission
was soon called to draft a new constitution for the country.
The Constitutional Commission was composed of fifty members appointed by Aquino from
varied backgrounds including several former members of the House of Representatives, former
justices of the Supreme Court, a Roman Catholic bishop, and political activists against the
Marcos regime. The Commission elected Cecilia Muñoz-Palma, a former Associate Justice of
the Supreme Court, as its president.
The Commission finished the final draft on October 12, 1986 and presented it to Corazon
Aquino on October 15. The constitution was ratified by a nationwide plebiscite on February 8,
1987.
Preamble
The preamble introduces the constitution and the source of sovereignty, the people. It follows the
pattern in past constitutions, including an appeal to God. The preamble reads:
We, the sovereign Filipino people, imploring the aid of Almighty God, in order to build a just
and humane society and establish a Government that shall embody our ideals and aspirations,
promote the common good, conserve and develop our patrimony, and secure to ourselves and our
posterity the blessings of independence and democracy under the rule of law and a regime of
truth, justice, freedom, love, equality, and peace, do ordain and promulgate this Constitution.

Attempts to Amend or Change the 1987 Constitution

The first attempt to amend the 1987 Constitution was under President Fidel Ramos. Among the
proposed changes in the constitution included a shift to a parliamentary system and the lifting of
term limits of public officials.
Under President Joseph Estrada, there was a similar attempt to change the 1987 constitution. The
process is termed as CONCORD or Constitutional Correction for Development. Unlike
Constitutional Reform under Ramos and Arroyo the CONCORD proposal, according to its
proponents, would amend only the restrictive economic provisions of the constitution that are
considered to impede the entry of more foreign investments in the Philippines.
Under President Gloria Macapagal Arroyo, there were more attempts to change the 1987
constitution. Constitutional reform was included in Arroyo's election campaign platform during
the 2004 elections and was considered a high priority.
After winning the 2004 elections, Arroyo, by virtue of Executive Order No. 453, created the
Consultative Commission, headed by Dr. Jose V. Abueva.

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After about a year of consultations, the Consultative Commission came up with proposals that
included a shift to a unicameral parliamentary form of government; economic liberalization;
further decentralization of national government, and more empowerment of local governments
by a transition to a parliamentary-government system.

Federalism

The Philippines is a unitary state with some powers devolved to Local Government
Units (LGUs) under the terms of the Local Government Code. There is also one autonomous
region, the Autonomous Region in Muslim Mindanao.
Over the years various modifications have been proposed to the Constitution of the Philippines,
including possible transition to a federal system as part of a shift to a semi-presidential system.
In 2004, Philippine President Gloria Macapagal Arroyo established the Consultative
Commission which suggested such a Charter Change but no action was taken by the Philippine
Congress to amend the 1987 Constitution.
The push for federalism was again revived under the administration of Rodrigo Duterte in 2016.

Policies on Agrarian Reform

Landownership in the Philippines under Spain

Large tracts of uncultivated lands not circumscribed within a given municipality were granted by
the Spanish monarch to deserving Spaniards. This kind of ownership became known as the
encomienda.

The encomienda system in the Spanish colonies began as a result of a Royal Order promulgated
in December of 1503. By virtue of this Royal Order, encomiendas were granted to favor Spanish
officials and clerics who were entrusted the responsibility to look after the spiritual and temporal
developments of the natives in a colonized territory.

In return for such a duty, the encomiendas enjoyed the right to have a share in the tribute
(tributo) paid by the natives. Legazpi himself had granted encomiendas to the friars, like the
Agustinians in Cebu and Manila.
The major sources of conflict and rebellion were really the harsh Spanish impositions, such as:
tributo, polo, encomienda, etc. Spanish Period (1521-1898)

Since the Spaniards did not levy a land tax or a head tax (cedula), and few records of land-
ownership were kept, the Spanish government issued two Royal Decrees: decreto realenga
(1880) and the Maura Law (1894) These decrees ordered the caciques and natives, to secure
legal title for their lands or suffer forfeiture.

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Landownership in the Philippines under the Americans

The United States of America took possession of the Philippines following the Spanish–
American War in 1898 and after putting down the subsequent rebellion in the Philippine–
American War. The Second Philippine Commission, the Taft Commission, viewed economic
development as one of its top three goals.

In 1901 93% of the islands' land area was held by the government and William Howard
Taft, Governor-General of the Philippines, argued for a liberal policy so that a good portion
could be sold off to American investors. Instead, the United States Congress, influenced by
agricultural interests that did not want competition from the Philippines, in the 1902 Land Act,
set a limit of 16 hectares of land to be sold or leased to American individuals and 1,024 hectares
to American corporations.

The U.S. Federal Government faced the problem of much of the private land being owned by
the Roman Catholic Church and controlled by Spanish clerics. The American government
officially secular, hostile to continued Spanish control of much of the land of the now American
colony, and long hostile to Catholics negotiated a settlement with the Church handing over its
land.
The 1902 Philippine Organic Act was a constitution for the Insular Government, as the U.S. civil
administration was known. This act, among other actions, disestablished the Catholic Church as
the state religion.
During the American Colonial Period, tenant farmers complained about
the sharecropping system, as well as by the dramatic increase in population which added
economic pressure to the tenant farmers' families. As a result, an agrarian reform program was
initiated by the Commonwealth. However, success of the program was hampered by ongoing
clashes between tenants and landowners.
An example of these clashes includes one initiated by Benigno Ramos through
his Sakdalista movement, which advocated tax reductions, land reforms, the breakup of the large
estates or haciendas, and the severing of American ties. The uprising, which occurred in Central
Luzon in May 1935, claimed about a hundred lives.

Post-War Interventions toward Agrarian Reform

When the Philippines gained its independence in 1946, much of the land was held by a small
group of wealthy landowners. There was much pressure on the democratically elected
government to redistribute the land. At the same time, many of the democratically elected office
holders were landowners themselves or came from land-owning families.
In 1946, shortly after his induction to Presidency, Manuel Roxas proclaimed the Rice Share
Tenancy Act of 1933 effective throughout the country. However problems of land tenure
continued. In fact these became worse in certain areas. Among the remedial measures enacted
was Republic Act No. 1946 likewise known as the Tenant Act which provided for a 70–30
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sharing arrangements and regulated share-tenancy contracts. It was passed to resolve the ongoing
peasant unrest in Central Luzon.

As part of his Agrarian Reform agenda, President Elpidio Quirino issued on 23 October 1950

Executive Order No. 355 which replaced the National Land Settlement Administration with
Land Settlement Development Corporation (LASEDECO) which takes over the responsibilities
of the Agricultural Machinery Equipment Corporation and the Rice and Corn Production
Administration.

To amplify and stabilize the functions of the Economic Development Corps (EDCOR),
President Ramon Magsaysay worked for the establishment of the National Resettlement and
Rehabilitation Administration (NARRA), which took over from the EDCOR and helped in the
giving of some sixty-five thousand acres to three thousand indigent families for settlement
purposes. 
.
Along this line of help to the rural areas, President Magsaysay initiated in all earnestness the
artesian wells campaign. A group-movement known as the Liberty Wells Association was
formed and in record time managed to raise a considerable sum for the construction of as many
artesian wells as possible. The socio-economic value of the same could not be gainsaid and the
people were profuse in their gratitude.

The Agricultural Land Reform Code (RA 3844) was a major Philippine land reform law

enacted in 1963 under President Diosdado Macapagal.
The code declared that it was State policy

1. To establish owner-cultivatorship and the economic family-size farm as the basis of

Philippine agriculture and, as a consequence, divert landlord capital in agriculture to
industrial development;
2. To achieve a dignified existence for the small farmers free from pernicious institutional
restraints and practices;
3. To create a truly viable social and economic structure in agriculture conducive to greater
productivity and higher farm incomes;
4. To apply all labor laws equally and without discrimination to both industrial and
agricultural wage earners;
5. To provide a more vigorous and systematic land resettlement program and public land
distribution; and
6. To make the small farmers more independent, self-reliant and responsible citizens, and a
source of genuine strength in our democratic society.
Agrarian Reform Efforts under Marcos

On 10 September 1971, President Ferdinand E. Marcos signed the Code of Agrarian Reform of

the Philippines into law which established the Department of Agrarian Reform, effectively
replacing the Land Authority.
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In 1978, the DAR was renamed the Ministry of Agrarian Reform.

On 26 July 1987, following the People Power Revolution, the department was re-organized
through Executive Order (EO) No. 129-A.
In 1988, the Comprehensive Agrarian Reform Law created the Comprehensive Agrarian Reform
Program which is also known as CARP.

Presidential Decree no. 27

This shall apply to tenant farmers of private agricultural lands primarily devoted to rice and corn
under a system of sharecrop or lease-tenancy, whether classified as landed estate or not;
The tenant farmer, whether in land classified as landed estate or not, shall be deemed owner of a
portionconstituting a family-size farm of five (5) hectares if not irrigated and three (3) hectares if
irrigated;

In all cases, the landowner may retain an area of not more than seven (7) hectares if such
landowner is cultivating such area or will now cultivate it;

For the purpose of determining the cost of the land to be transferred to the tenant-farmer pursuant
to this Decree, the value of the land shall be equivalent to two and one-half (2 1/2) times the
average harvest of three normal crop years immediately preceding the promulgation of this
Decree;

The total cost of the land, including interest at the rate of six (6) per centum per annum, shall be
paid by the tenant in fifteen (15) years of fifteen (15) equal annual amortizations;

In case of default, the amortization due shall be paid by the farmers' cooperative in which the
defaulting tenant-farmer is a member, with the cooperative having a right of recourse against
him;

The government shall guaranty such amortizations with shares of stock in government-owned
and government-controlled corporations;

No title to the land owned by the tenant-farmers under this Decree shall be actually issued to a
tenant-farmer unless and until the tenant-farmer has become a full-fledged member of a duly
recognized farmer's cooperative;

Title to land acquired pursuant to this Decree or the Land Reform Program of the Government
shall not be transferable except by hereditary succession or to the Government in accordance
with the provisions of this Decree, the Code of Agrarian Reforms and other existing laws and
regulations;

The Department of Agrarian Reform through its Secretary is hereby empowered to promulgate
rules and regulations for the implementation of this Decree. 
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Post-1986 Agrarian Reform
President Corazon Aquino envisioned agrarian and land reform as the centerpiece of her
administration's social legislative agenda. However, her family background and social class as a
privileged daughter of a wealthy and landed clan became a lightning rod of criticisms against her
land reform agenda. On 22 January 1987, less than a month before the ratification of the 1987
Constitution, agrarian workers and farmers marched to the historic Mendiola Street near
the Malacañang Palace to demand genuine land reform from Aquino's administration. However,
the march turned violent when Marine forces fired at farmers who tried to go beyond the
designated demarcation line set by the police. As a result, 12 farmers were killed and 19 were
injured in this incident now known as the Mendiola massacre. This incident led some prominent
members of the Aquino Cabinet to resign their government posts.
In response to calls for agrarian reform, President Aquino issued Presidential Proclamation 131
and Executive Order 229 on 22 July 1987, which outlined her land reform program, which
included sugar lands.

In 1988, with the backing of Aquino, the new Congress of the Philippines passed Republic

Act No. 6657, more popularly known as the Comprehensive Agrarian Reform Law." The law
paved the way for the redistribution of agricultural lands to tenant-farmers from landowners, who
were paid in exchange by the government through just compensation but were also allowed to
retain not more than five hectares of land.

Despite the implementation of CARP, Aquino was not spared from the controversies that
eventually centered on Hacienda Luisita, a 6,453-hectare estate located in the Province of Tarlac,
which she, together with her siblings inherited from her father Jose Cojuangco (Don Pepe).

One major problem that the Ramos administration faced was the lack of funds to support and
implement the program. The Php50 million, allotted by R.A. No. 6657 to finance the CARP from
1988 to 1998, was no longer sufficient to support the program.

To address this problem, Ramos signed R.A. No. 8532 to amend the Comprehensive Agrarian
Reform Law (CARL) which further strengthened the CARP by extending the program to another
ten years. Ramos signed this law on 23 February 1998 – a few months before the end of Ramos'
term.

An amendatory law, CARPER or the Comprehensive Agrarian Reform Program Extension with

Reforms or the Republic Act. 9700 was passed. It extended the deadline of distributing
agricultural lands to the farmers for an additional five years.

This law also amends other provisions and regulations formerly stated in the CARP. It was
signed into law on August 7, 2009 and was set to be accomplished by the year 2014.

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The Comprehensive Agrarian Reform Program is the current law under which land reform is
conducted. Large land-holdings are broken up and distributed to farmers and workers on that
particular hacienda.

The crops grown on such haciendas include sugar and rice. Each farmer is giving a "certificates
of land ownership award" or CLOA for their new property. Under the law, a landowner can only
retain 5 hectares, regardless of the size of the hacienda. Conflict can arise between previous
landowners and "beneficiaries" and between competing farmers' groups that have conflicting
claims.

CARPER and the Future of Agrarian Reform in the Philippines

In December 2008, CARP expired and the following year CARPER was passed. CARPER
stands for "Comprehensive Agrarian Reform Program Extension with Reforms". CARPER
expired in 2014.

EVOLUTION OF PHILIPPINE TAXATION

Taxation in Spanish Philippines
Tribute – was a form of taxation implemented by the Spanish government in the Philippines to
support government and church operations. The Tribute taxes were obliged Filipinos to pay as a
sign of loyalty to the King of Spain.

The local gobernadorcillos had been responsible for collection of the tribute. Under the cedula
system, however, taxpayers were individually responsible to Spanish authorities for payment of
the tax, and were subject to summary arrest for failure to show a cedula receipt.

Forced Labor (Polo y servicio) Polo y servicio is the forced labor for 40 days of men ranging
from 16 to 60 years of age who were obligated to give personal services to community projects.
One could be exempted from polo by paying the falla, a daily fine of one and a half real. In 1884,
labor was reduced to 15 days. The polo system was patterned after the Mexican repartimento,
selection for forced labor

Manila-Acapulco Galleon Trade The Manila-Acapulco Galleon Trade was the main source of
income for the colony during its early years. Service was inaugurated in 1565 and continued into
the early 19th century. The Galleon trade brought silver from New Spain and silk from China by
way of Manila. This way, the Philippines earned its income through buy and sell - that is, they
bought silk from China for resale to New Spain and then bought American silver for resale to
China.

The Tobacco Monopoly made the Philippines the greatest tobacco-growing country in the
Orient. All farmers had a quota of tobacco to raise annually and all were sold to the Government.

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Spanish policies imposed here were not that helpful for the Filipinos and most government
officials were of Spanish by blood and Filipinos were the ones made to work tedious jobs.

There were many changes in the Filipino society during the Spanish colonization. Spanish
authorities did not show any sign of fairness towards the Filipinos especially in the division of
responsibilities in polo y servicio.

Because of this irresponsibility, Filipinos still work apart from their allotted time for work.
Filipinos who were working in the Galleon Trade experienced misfortune because of the heavy
loads Spanish authorities were asking of them. As a result, many workers died and later on
separated families because of poverty being experienced.

Taxation under the Americans

In the early American regime from the period 1898 to 1901, the country was ruled by American
military governors.

In 1902, the first civil government was established under William H. Taft. However, it was only
during the term of second civil governor Luke E. Wright that the Bureau of Internal Revenue
(BIR) was created through the passage of Reorganization Act No. 1189 dated July 2, 1904.

On August 1, 1904, the BIR was formally organized and made operational under the Secretary of
Finance, Henry Ide (author of the Internal Revenue Law of 1904), with John S. Hord as the first
Collector (Commissioner).

The first organization started with 69 employees, which consisted of a Collector, Vice-Collector,
one Chief Clerk, one Law Clerk, one Records Clerk and three (3) Division Chiefs.

Taxation during the Commonwealth Period

The tax statutes were re-codified by an Act of Congress on February 10, 1939 as the "Internal
Revenue Code" (later known as the "Internal Revenue Code of 1939").

The 1939 Code was published as volume 53, Part I, of the United States Statutes at Large and as
title 26 of the United States Code. Subsequent permanent tax laws enacted by the United States
Congress updated and amended the 1939 Code.

Fiscal Policy from 1946 to Present

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Fiscal policy refers to the measures employed by governments to stabilize the economy,
specifically by manipulating the levels and allocations of taxes and government expenditures.
The Philippine government’s main source of revenue are taxes, with some non-tax revenue also
being collected. To finance fiscal deficit and debt, the Philippines relies on both domestic and
external sources.
Fiscal policy during the Marcos administration was primarily focused on indirect tax collection
and on government spending on economic services and infrastructure development.
The first Aquino administration inherited a large fiscal deficit from the previous administration,
but managed to reduce fiscal imbalance and improve tax collection through the introduction of
the 1986 Tax Reform Program and the value added tax.

The Ramos administration experienced budget surpluses due to substantial gains from the

massive sale of government assets and strong foreign investment years and administrations.
The Estrada administration faced a large fiscal deficit due to the decrease in tax effort and the
repayment of the Ramos administration’s debt to contractors and suppliers.
During the Arroyo administration, the Expanded Value Added Tax Law was enacted,
national debt-to-GDP ratio peaked, and underspending on public infrastructure and other capital
expenditures was observed.
Aquino in December 2012 also approved Republic Act No. 10351 or the Sin Tax Reform Law,
which seeks to increase excise taxes on alcohol and tobacco products.

The Tax Reform for Acceleration and Inclusion (TRAIN) Act, officially cited as Republic

Act No. 10963, is the initial package of the Comprehensive Tax Reform Program (CTRP) signed
into law by President Rodrigo Duterte on December 19, 2017.
TRAIN consists of revisions to the National Internal Revenue Code of 1997, or the Tax Code.
This reform includes packages that make changes in taxation concerning the personal income
tax (PIT), estate tax, donor's tax, value added tax (VAT), documentary stamp tax (DST) and the
excise tax of petroleum products, automobiles, sweetened beverages, cosmetic procedures, coal,
mining and tobacco.

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