Philippine Senators File Bills to Remove System Loss Charge from Electricity Bills

A push to alleviate the electricity cost burden on Filipino consumers is gaining momentum, with several senators filing bills to remove the "system loss charge" from electricity bills, following a call by President Ferdinand "Bongbong" Marcos Jr. to amend the Electric Power Industry Reform Act (EPIRA). Senate President Sherwin Gatchalian has filed Senate Bill 2350, or the System Loss Charge Abolition Act. "Amid the Philippines' highest average electricity rates in Southeast Asia, removing unjust system loss charges is a concrete step toward lowering power costs," Gatchalian stated. He explained that the system loss charge accounts for 5% to 6% of a consumer's electricity bill. From August 2025 to July 2026, the average monthly system loss charge for a household consuming 200 kWh was P148.95, amounting to P1,787.38 annually per consumer, excluding VAT. Senator JV Ejercito has also filed a similar measure and a separate bill seeking the removal of the 12% value-added tax (VAT) on electricity. Ejercito posted on Facebook, "A lot of us are impacted by, and burdened by the high costs of electricity so the charge should be removed and it should not be passed onto the consumer." Earlier on Tuesday, Senate President Pro-tempore Vicente "Tito" Sotto III and Senator Erwin Tulfo filed separate legislative measures aimed at reducing electricity costs and providing tax relief. Tulfo, who chairs the Senate Committee on Energy, filed two bills and a resolution to reduce electricity charges and investigate system loss pass-on costs to consumers. Meanwhile, Sotto filed Senate Bill No. 2338, the proposed "Expanded Income Tax Exemption of 2026," which seeks to raise the annual income tax exemption threshold to P350,000 starting January 1, 2027. Under this bill, individuals earning P350,000 or less annually would be fully exempt from income tax. Sotto remarked, "This measure aims to provide meaningful tax relief and allow Filipino workers to keep more of what they earn." President Marcos' fifth State of the Nation Address (SONA) on Monday explicitly called for a reduction in energy costs, demanding the immediate amendment of EPIRA and the prohibition of charging system loss, including VAT, to consumers. System loss refers to electricity that goes missing during transmission from power plants to homes and businesses due to various factors. The 25-year-old EPIRA allows energy firms to pass on the cost of this missing electricity to consumers. Source: GMA Money Philippines