Marcos Jr. Demands End to Systems Loss Fees in Electricity Bills

MANILA, Philippines — President Ferdinand Marcos Jr. has called for amendments to the Electric Power Industry Reform Act (EPIRA) to stop systems loss fees, including value-added tax (VAT), from being passed on to consumers. Marcos made the demand during his State of the Nation Address (SONA) on Monday, July 26, addressing the two chambers of Congress and a room of officials and diplomats. "It is not the consumer’s fault that systems loss happened. So it is not right that they are the ones made to pay for it," Marcos said. The line drew the loudest response of his address so far, with prolonged applause and some audience members rising from their seats. The call comes as Filipino households shoulder some of Southeast Asia’s highest electricity costs. Systems loss refers to the electricity that is lost in the transmission and distribution process, often due to aging infrastructure, pilferage, and technical inefficiencies. Historically, a portion of these losses has been passed on to consumers through system loss charges, which include VAT, adding to the economic burden of households. This move by President Marcos is seen as a significant step towards alleviating the financial strain on Filipino families struggling with high utility bills. The administration has pledged to prioritize economic growth and the welfare of its citizens. The proposed amendment to the EPIRA law aims to directly address a major point of contention for many households, potentially boosting consumer confidence and reducing inflationary pressures. However, the successful implementation of this policy will depend on the legislative process and the cooperation of various stakeholders in the power sector. Ensuring the reliability and affordability of electricity supply while phasing out these charges will be a key challenge for the government.