Two senators filed bills to scrap system loss and Value‑Added Tax (VAT) charges on electricity, backing President Ferdinand Marcos Jr.’s push to cut power costs for Filipino consumers.
Senate President Sherwin Gatchalian filed Senate Bill No. 2350, or the proposed System Loss Charge Abolition Act, saying families should not be forced to pay for electricity they never used. He stressed the measure would provide “immediate financial relief” amid the Philippines’ highest average power rates in Southeast Asia.
For Meralco customers, system loss typically accounts for 5 to 6 percent of a bill. Gatchalian noted that from August 2025 to July 2026, households consuming 200 kWh monthly paid an average of ₱148.95 in system loss charges—₱1,787.38 over the year, excluding VAT.
Sen. Joseph Victor “JV” Ejercito filed two bills: Senate Bill No. 2342, the Consumer Protection Against System Losses Act, and Senate Bill No. 2343, which seeks to remove the 12‑percent VAT on electricity.
Ejercito said Congress must act swiftly to ease the burden on families already facing steep power costs.
“Consumers should only pay for the electricity they actually use and the services they receive. If you don’t use the electricity, you don’t have to pay,” Ejercito said.
System loss refers to electricity lost during transmission and distribution, whether through technical inefficiencies or non‑technical factors such as illegal connections.
Current rules allow utilities to pass on part of these losses to consumers within limits set by the Energy Regulatory Commission (ERC).
Ejercito’s bill would require the ERC to amend its policies within 90 days to remove system loss as a separate item on bills.
He added that scrapping VAT on electricity would directly cut costs for households and businesses, freeing up budgets for food, medicine, education, and other essentials.
In his July 27 State of the Nation Address, Marcos urged Congress to amend the Electric Power Industry Reform Act (EPIRA) to end the practice of charging consumers for system losses and the VAT imposed on them.
