As households brace for another uptick in electricity bills this April, senatorial aspirant and former Interior Secretary Benhur Abalos has reiterated his call to abolish the value-added tax (VAT) on electricity and taxes on fuel exclusively used for power generation.
In a recent radio interview, Abalos criticized what he described as “layered and excessive taxation” that has long made Philippine electricity among the most expensive in Southeast Asia.
“Due to this increase, it gets harder for ordinary families to keep the lights on,” Abalos said. “Twenty years ago, when I was a congressman, electricity had no VAT. I opposed it then, and I’m standing by that position now.”
The Manila Electric Company (Meralco) recently announced a rate increase of PhP0.72 per kilowatt-hour for April, translating to an estimated PhP145 jump in monthly bills for households consuming 200 kWh.
Abalos said there are VAT at each stage of power delivery. “You have 12% VAT on generation, 12% on distribution, 12% on transmission—and then there’s system loss passed on to consumers. How can any country thrive like this?” he asked.
He warned that such high operating costs are driving investors away and crippling local industries. “Maraming negosyo na umalis sa atin, pumunta sa ibang lugar dahil mas mura ang kuryente. Eh ang gagaling ng mga Pilipino, ng mga labor natin dito—very skilled,” he said. “We have world-class Filipino talent, but we’re losing jobs because it’s too expensive to operate here.”
To address the problem, Abalos is proposing the remove the VAT on electricity. “Ito na lang isipin natin, bakit tayo nagtatax? Para magkaroon ng pera ang gobyerno. Let’s look at it na pwede nating bawasan ito, tanggalin ito. Siguradong dadami ang negosyo,” he added.
He also said the Electric Power Industry Reform Act (EPIRA) of 2001 was supposed to liberalize and reduce costs in the power sector but it did not address the issue that the power sector is overtaxed, one of the main factors in the country’s high electricity cost – the second highest in Southeast Asia.
Abalos vowed to prioritize energy reform if elected to the Senate, including the removal of VAT on electricity and the reduction of taxes on fuel used solely for power generation.
“This will be one of my first bills. Lowering energy costs will spur more businesses, more jobs, and better lives.
Abalos also called for more support for renewable energy, citing the country’s abundant yet underutilized natural resources. “Right now, we’re only using 18 to 21 percent renewables. In Nordic countries, it’s over 50 percent—and it’s cheaper. We should invest more in renewable energy,” he said.
He noted that the Philippines, as an archipelago, is well-positioned to harness wind, wave, solar, and hydro power, but continues to rely on imported fossil fuels. “Halos buong taon tayong may sikat ng araw. May mga baybayin at kabundukan tayo na perpekto para sa wind at hydro power. Meron nang teknolohiya para sa wave energy na ginagamit na sa ibang bansa. Pero hanggang ngayon, umaasa pa rin tayo sa fossil fuel at langis,” Abalos said.
For Abalos, the shift to renewables is not just an environmental necessity but a long-term economic solution. “Investing in renewable energy means reducing our exposure to global fuel price shocks, making electricity more affordable, and creating green jobs in our rural and coastal areas,” he said
