House Speaker Faustino “Bojie” Dy III commended President Ferdinand Marcos Jr. for directing government agencies to find concrete ways to lower electricity costs for Filipino consumers.
The House leader welcomed the decision to eliminate the 12% Value Added Tax (VAT) on allowable system loss charges on monthly utility bills, which was officially announced on Monday, September 14.
“Salamat kay Pangulong Bongbong Marcos sa malinaw na direktiba na humanap tayo ng mga paraan upang mapababa ang presyo ng kuryente at mapagaan ang pasanin ng bawat Pilipino,” Dy said.
Dy praised the rapid coordination between the Bureau of Internal Revenue (BIR), the Energy Regulatory Commission (ERC), and energy sector officials in executing the measure. He emphasized that removing unnecessary charges brings tangible relief to households managing tight daily budgets.
“Every peso we can remove from the electricity bill matters, especially to families already stretching their budgets for food, education, transportation, and other basic needs,” the Speaker noted.
The tax exemption was finalized through BIR Revenue Memorandum Circular No. 97-2026, which removes the 12% tax on system loss charges that fall within the ERC’s approved threshold. By lifting this tax, consumers will no longer be billed for power that was lost rather than consumed.
House leaders initially shared the upcoming policy change during a public consultation in South Cotabato, revealing that the measure only required the tax bureau’s official circular to take effect.
“Malalim na usapin ang tungkol sa system loss at tinatalakay nang mabuti ng House of Representatives to make sure na itong mga gusto nating mangyari na lalong-lalo na maibsan ang kabigatan na dinadala ng ating mga kababayan,” Dy added.
South Cotabato 2nd District Representative Ferdinand Hernandez highlighted that Dy led discussions with energy and tax authorities to demonstrate that removing the tax required no new legislation, as system loss does not involve actual power usage.
“Mayroon na, through the effort of the Speaker, minemeeting kami with Energy and BIR with the position na hindi na kailangan ng batas para tanggalin yung VAT doon sa system loss because when you say VAT, it’s consumption. You pay because you consume it. But since it’s system loss, there’s no consumption,” Hernandez explained.
“So therefore, it only takes ERC to come up with a policy and then a revenue regulation of the BIR which will come out anytime this September na tanggalin na ang VAT sa system loss,” Hernandez added.
Asenso Pinoy Party-list Representative Henry Oaminal Jr. affirmed that the ERC had fulfilled its administrative prerequisites, leaving the tax bureau’s circular as the final step to implement the rate reduction.
“Once malabas na po yung revenue regulation ng BIR, yung VAT on systems loss, isang component ng systems loss na ipapasa sa mga konsumente, matatanggal na po,” Oaminal said.