Sen. Gatchalian pushes lower power costs as growth slows

Senate President Sherwin Gatchalian is pushing measures to cut electricity costs as the Philippine economy slows, including a proposal to stop distribution utilities from passing system loss charges on to consumers.

The call follows a 2.3 percent expansion in gross domestic product in the second quarter, the weakest quarterly growth since the pandemic. Growth slowed from 2.8 percent in the first quarter and 5.4 percent a year earlier, according to the Philippine Statistics Authority.

“If we want to revitalize our economy and give real financial relief to Filipino families and small businesses, we need to bring down the cost of electricity,” Gatchalian said Saturday.

Gatchalian earlier filed Senate Bill 2350 seeking to prohibit distribution utilities from charging consumers for system losses and remove the value-added tax on electricity sales.

System loss charges cover electricity lost during transmission and distribution. Gatchalian's office said they accounted for about 5% to 6% of a typical Manila Electric Co. bill, with a household using 200 kilowatt-hours paying nearly 149 pesos a month in such charges from August 2025 to July 2026, excluding VAT.

The Energy Regulatory Commission has also moved to remove the 12% VAT on system loss charges, saying the change could save consumers about 6 billion pesos annually. The regulator has stressed that pass-through charges are not profits for distribution utilities but payments collected for generators, the transmission provider and government.

Gatchalian also filed Senate Resolution 581 seeking an inquiry into the lack of regular fuel cost audits amid rising generation charges.

He cited Meralco figures showing that a household using 200 kWh a month paid about 2,350 pesos, or 11.74 pesos per kWh, in January 2025, compared with about 2,970 pesos, or 14.83 pesos per kWh, in July 2026.

Fuel costs accounted for 86.16% of Meralco's generation charges in July, according to figures cited by Gatchalian.

He said the country's reliance on imported fuel leaves consumers exposed to global energy price swings.