LISTED-FIRM Vivant Corp. has backed proposals to review taxes and charges embedded in electricity bills, saying these contribute to the Philippines’ persistently high power costs and weaken the country’s competitiveness in the region.
Vivant Corp.’s chief executive officer Arlo Sarmiento said the government should revisit the value-added tax (VAT), cross-subsidies and other charges imposed on electricity consumers as policymakers debate measures to reduce energy costs amid rising inflation and slowing economic growth.
He said the Philippines continues to suffer from some of the highest electricity prices in Southeast Asia, driven not only by dependence on imported fuel but also by taxes and regulatory charges built into power bills.
“The Philippines has the second-highest power cost in the Asean region, second only to Singapore,” Sarmiento said. “From that standpoint, we would welcome lowering or removal of the VAT.”
The remarks come amid renewed discussions in Senate and the energy sector on possible interventions to ease electricity prices as businesses grapple with elevated operating costs and consumers face increasing utility expenses.
Senator Risa Hontiveros has filed Senate Bill 2076 seeking to exempt system loss charges from VAT for residential electricity consumers. In the bill’s explanatory note, Hontiveros said electricity prices have risen due to global oil supply disruptions and higher demand during the summer months, making it urgent for the government to provide relief to consumers.
The proposed measure seeks to remove VAT on system loss charges, which the senator said effectively compounds costs borne by households. The bill argued that consumers should not be unduly taxed for inefficiencies within the power system that are beyond their control.
Early this year, Senator Francis Escudero also filed Senate Bill 476, which seeks to lift the 12 percent VAT on electricity. With power rates among the highest in Asia, the proposal is expected to bring immediate relief to households and reduce operating costs for businesses struggling with overhead.
Power firms rarely speak publicly in favor of reducing taxes on electricity because such proposals often involve politically sensitive fiscal trade-offs. But Vivant president Emil Andre Garcia said that reviewing the structure of electricity bills is necessary if the Philippines wants to improve industrial competitiveness and attract more investments.
“There’s so much tax already embedded in our bills,” Garcia said. “It’s clearly made us uncompetitive.”
Sarmiento said electricity consumers shoulder not only VAT but also various cross-subsidies and pass-through charges that increase overall power rates. “In other countries, power is subsidized,” he said. “In ours, it’s the opposite. It’s not only not subsidized, it’s added to by taxes and cross-subsidies.”
Both Vivant executives stressed that lowering electricity costs could have broader economic benefits, particularly for manufacturing, business process outsourcing, tourism and other power-intensive industries.
