The Senate’s Proactive Response and Oversight for Timely and Effective Crisis Strategy (PROTECT) Committee on Wednesday, April 29, launched an inquiry into the impact of the value-added tax (VAT) on soaring electricity bills, as households across the country reported steep and unexpected increases.
During the panel’s third hearing, lawmakers cited widespread “bill shock,” with some consumers claiming their electricity costs had tripled despite reduced usage.
Data presented before the committee showed that electricity sales actually declined from 27.711 billion kilowatt-hours in February to 26.44 billion kilowatt-hours in April, contradicting the usual explanation that higher summer consumption drove the spike.
Senator Win Gatchalian, who presided over the hearing, urged the Energy Regulatory Commission (ERC) to examine the tax components embedded in electricity pricing. He emphasized that beyond VAT, multiple taxes—including franchise, local franchise, and energy taxes—may be compounding the burden on consumers.
“To the ERC, part of the committee recommendation is to study the VAT component of petroleum and electricity. We will call a consultative meeting… not just VAT, but also franchise tax, electricity tax, local franchise tax, and energy tax, which for me may no longer be applicable,” Gatchalian said.
He also dismissed circulating claims that lifeline subsidies were responsible for higher rates, clarifying instead that increased generation charges and the depreciation of the peso against the US dollar were key drivers behind the rising bills.
Meanwhile, Senate Deputy Minority Leader Rodante Marcoleta called for the removal of the 12 percent VAT on electricity, arguing that it has become an unfair burden for millions of Filipino households already struggling with high power costs.
Marcoleta further urged Manila Electric Company (Meralco) to stop passing on “non-technical” system losses—such as electricity theft and administrative inefficiencies—to consumers. He cited Supreme Court rulings stating that such losses should be absorbed by utility companies as part of their operational risk.
The Senate committee is expected to continue its review and consultations as part of efforts to ease electricity costs and ensure fair pricing mechanisms for consumers.
