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THE HIGH COST OF POWER: Laws Behind Philippines' Sky-High Electricity Rates

June 20, 2026


Why Filipinos pay more for electricity than rent—and why the authors of these laws must act now

MANILA, Philippines — In a shocking reality that has become the norm for millions of Filipinos, monthly electricity bills now exceed rental payments for many households. While families struggle to keep the lights on, a closer look at the laws governing power consumption reveals a troubling pattern: well-intentioned legislation that has become a financial burden through excessive add-on charges.
The question isn't just why electricity is so expensive—it's why consumers must bear the cost of government programs through multiple layers of surcharges on top of an already burdensome 12% VAT.

The Three Laws That Changed Everything

1. REPUBLIC ACT 9136: Electric Power Industry Reform Act (EPIRA) of 2001

Principal Authors:
  • Senate: Sen. Franklin M. Drilon
  • House: Speaker Arnulfo "Noli" Fuentebella Passed: June 7, 2001
EPIRA privatized the power industry and introduced the Universal Charge—a fee meant to cover stranded debts of the National Power Corporation and missionary electrification. What started as reform has become a permanent surcharge that consumers cannot escape.

2. REPUBLIC ACT 9337: Expanded Value-Added Tax (EVAT) Law of 2005

Principal Authors:
  • Senate: Sen. Ralph G. Recto
  • House: Rep. Jesli A. Lapus Passed: October 2005
This law expanded VAT coverage to include electricity consumption at 12%. The problem? Instead of this VAT being the sole tax burden, it became the base upon which additional charges are piled.

3. REPUBLIC ACT 9513: Renewable Energy Act of 2008

Principal Authors:
  • Senate: Sen. Pia S. Cayetano and Sen. Loren Legarda Passed: December 2008
While promoting green energy is noble, the Feed-in Tariff Allowance (FIT-ALL) passes the entire cost to consumers as another line item on their bills—on top of VAT.

The Double Taxation Dilemma

Here's the crux of the issue: Even if these laws serve good purposes, why must consumers pay for them through separate add-on charges?
Filipinos already pay:
  • 12% VAT on electricity
  • Universal Charge (stranded debts, missionary electrification)
  • FIT-ALL (renewable energy subsidies)
  • Senior Citizen discounts (passed on to other consumers)
  • Government taxes and franchises
  • System loss charges
The argument is simple: If the government collects 12% VAT from electricity consumption, that revenue should be sufficient to fund these programs. Instead, VAT becomes just the starting point—not the ceiling—of taxation.

Where Does the Money Really Go?

The controversy deepens when we examine national spending priorities:
  • ₱1 TRILLION in alleged flood control corruption scandals
  • National budget increasingly allocated to AICS (Assistance to Individuals in Crisis Situations) and Ayuda programs—criticized as modern "pork barrel"
  • Infrastructure projects marred by overpricing and ghost projects
Meanwhile, ordinary Filipinos are asked to shoulder more charges for programs that should be funded from the general budget—already swollen with tax revenues.

WHAT MUST BE DONE: A Call to Action

To the Senate and House of Representatives:

1. REVISE THE LAWS YOU AUTHORED
  • Sen. Franklin Drilon, Sen. Ralph Recto, Sen. Pia Cayetano, and all co-authors: It's time to amend these laws.
  • Remove add-on charges and consolidate them within the existing VAT framework.
  • If programs need funding, allocate from the national budget—not from endless consumer surcharges.
2. DEMAND TRANSPARENCY
  • Show us where the Universal Charge really goes.
  • Audit the FIT-ALL collections and disbursements.
  • Justify why VAT isn't enough to cover these programs.
3. STOP THE DOUBLE TAXATION
  • If VAT is collected, it should be the only tax on electricity consumption.
  • All subsidies, social programs, and green energy incentives must come from the VAT revenue—not as additional line items.
4. PRIORITIZE BUDGET REFORM
  • Before adding more charges to consumers, fix the corruption in flood control and infrastructure.
  • Eliminate disguised pork barrel (AICS, Ayuda abuse) before asking consumers to fund more programs.

To Regulatory Bodies:

Energy Regulatory Commission (ERC):
  • Reject applications for new surcharges.
  • Mandate that all existing charges be absorbed into base rates or VAT.
Department of Energy (DOE):
  • Review the necessity of each add-on charge.
  • Propose legislative amendments to consolidate charges.

To Every Filipino:

  1. Know your bill — Understand every line item and surcharge.
  2. Demand accountability — Contact your senators and representatives.
  3. Share this information — Most people don't know why their bills are so high.
  4. Vote wisely — Remember who authored these laws when election season comes.

The Bottom Line

Good intentions don't justify financial abuse. The authors of EPIRA, EVAT, and the Renewable Energy Act may have had noble goals, but the implementation has become a nightmare for Filipino consumers.
It's time to choose: Either fund these programs from the VAT already collected, or eliminate the add-on charges. Filipinos cannot—and should not—continue to subsidize government programs while corruption drains the national budget.
To the senators and representatives who authored these laws: You have the power to fix what you created. Revise your laws. Remove the unfair charges. Make electricity affordable again.
The lights are still on, but for millions of Filipinos, the cost is becoming too dark to bear.
#MahalKuryente #ElectricityReform #FairRatesPH #StopDoubleTaxation
Share this article. Tag your senators. Demand change.
IckyG

Posted by IckyG