Marikina 2nd District Representative Miro Quimbo has thrown his support behind the Energy Regulatory Commission’s (ERC) proposed policy to remove the 12 percent value-added tax (VAT) applied to system loss charges, calling it a crucial step toward lowering power costs for Filipino households and businesses.
Under the ERC’s draft resolution, system loss charges, costs associated with electricity lost in transmission and distribution due to technical factors or electricity theft, will no longer be included in the taxable gross receipts of generation companies and the National Grid Corporation of the Philippines (NGCP).
Additionally, distribution utilities will be mandated to itemize system loss separately on monthly electricity bills. The billing change aims to highlight system loss as a government-mandated pass-through charge rather than electricity actually consumed by the end-user.
Quimbo commended the ERC for taking action, noting that the draft resolution stems from ongoing discussions between Congress and the regulatory agency to ease financial pressure on consumers.
“I commend the ERC for this move. This is the product of sustained consultation between Congress and the Commission, and we appreciate the ERC’s initiative to act on an issue that directly affects consumers,” Quimbo said in a statement. “This is government working together to remove costs from electricity bills wherever we can. At a time when every peso matters, even seemingly small reductions can provide meaningful relief to Filipino households and businesses.”
The legislative push against taxing lost electricity had already gained momentum in the legislature. Quimbo previously filed House Bill No. 10602, which specifically seeks to abolish the 12 percent VAT on system loss.
“There is no value in energy that is not consumed. We should not be taxing consumers for electricity that never reached their homes or businesses in the first place,” Quimbo said, stressing that while system loss is an operational reality of the power grid, consumers should not be taxed on power they never received.
Once the ERC finalizes the resolution and receives confirmation on the tax treatment from the Bureau of Internal Revenue (BIR), the policy will take effect, translating into immediate savings on electricity bills nationwide.
Quimbo noted that regulatory moves like the ERC proposal complement pending legislation to make power billing fairer and more transparent, adding that Congress will continue collaborating with government agencies to pursue reforms that keep electricity affordable while maintaining the power sector’s financial viability.