Senate Difice of the Secretary 26 MAY -5 A11:14 TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session RECEIVED BY: SENATE S.B. No. 2093 INTRODUCED BY SENATOR RISA HONTIVEROS AN ACT AUTHORIZING EXEMPTION FROM IMPOSITION OF VALUE-ADDED TAX (VAT) ON THE ELECTRICAL BILLINGS OF RESIDENTIAL HOUSEHOLDS WITH 150KWH OR LESS TOTAL MONTHLY CONSUMPTION EXPLANATORY NOTE Electricity remains one of the most significant and unavoidable expenses for Filipino households. In recent months, rising generation costs caused by global fuel supply constraints have led to sharp increases in electricity rates. This is exacerbated by the increased demand for electricity during the summer months. These increases have resulted in widespread "bill shock," with many consumers reporting monthly bills that are 1.5 to 2 times higher than their usual consumption costs. On average, a family of five living in the National Capital Region earning minimum wage consumes around 100 to 150 kilowatt hours (kWh) per month. These are households who typically have a few appliances, with limited airconditioning use. Their electricity bill represents roughly up to 10-15% of their monthly income. While their economic status is slightly above the absolute poverty line, they still remain vulnerable to rising electricity costs. At present, government support mechanisms such as the lifeline rate provide limited relief, covering only the most marginalized consumers and often subject to strict eligibility requirements. However, a large segment of low- to lower-middle- income households remain unprotected from rising electricity prices despite their limited capacity to absorb such increases. This measure seeks to give extended relief to these consumers. This bill seeks to address this gap by extending targeted relief to residential households consuming 150 kWh or less per month. Specifically, the measure proposes to exempt these households from the imposition of the Value-Added Tax (VAT) on the final sale of electricity. By doing so, the bill reduces the effective cost of electricity for a broader group of "energy-poor" consumers who fall outside existing subsidy mechanisms but are nonetheless highly vulnerable to price shocks.
The proposed VAT exemption is expected to translate into monthly savings of approximately P250 to P300 per household, providing immediate and meaningful financial relief. More importantly, it ensures a more equitable distribution of government support by aligning assistance with actual consumption patterns and economic vulnerability. In view of the foregoing, the immediate passage of this bill is earnestly sought. SASANDEROS Keraguel RISA HONTIVEROS Senator
Senate Office of the Secretary 26 MAY -5 A11 :14 TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session RECEIVED BY: ENAT 2093 S.B. No. _ INTRODUCED BY SENATOR RISA HONTIVEROS AN ACT AUTHORIZING EXEMPTION FROM IMPOSITION OF VALUE-ADDED TAX (VAT) ON THE ELECTRICAL BILLINGS OF RESIDENTIAL HOUSEHOLDS WITH 150KWH OR LESS TOTAL MONTHLY CONSUMPTION Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled.
Section 1. This Act shall be known as the "Kuryente Relief Act of 2026".
Section 2. Declaration of Policies and Objectives - It is the policy of the State
to provide reliable and affordable electricity within its territory. In this regard, the State shall support qualified marginalized end-users from rising electricity costs, and ensure affordable supply across the country.
Section 3. Value-Added Tax (VAT) Exemption for Qualified End-Users -
Residential household consumers with 150kWh or less electricity consumption per month, shall be exempt from the imposition of VAT on the sale of electricity, including system loss, by generation companies, transmission entities, including the National Grid Corporation of the Philippines, and distribution companies and electric cooperatives. Distribution utilities (DUs) and electric cooperatives (ECs) shall automatically reflect the exemption on the statement of accounts of their consumers without prior need for application. The Energy Regulatory Commission (ERC) shall ensure that the reduction arising out of this exemption shall not be passed on to the residential household consumers through distribution wheeling charges or other pass-through components.
Section 4. Implementing Rules and Regulations (IRR) - Within ninety (90) days
from the effectivity of this Act, the Department of Energy (DOE), as the lead agency, together with the Energy Regulatory Commission (ERC), and in consultation with other public and private stakeholders representing consumers and sectors affected by this Act, shall promulgate the necessary implementing rules and regulations of this Act.
The Department of Finance (DOF), through the BIR, shall come up with the appropriate Revenue Regulations for the VAT exemption within thirty (30) days from the effectivity of the IRR.
Section 5. Penalties - Non-compliance with any of the provisions of this Act
and its IRR shall be met with an administrative penalty ranging from One Million pesos (P1,000,000) to Fifty Million pesos (P50,000,000), after due notice and hearing by the ERC, and without prejudice to any administrative sanction that the BIR may take for violation of its pertinent revenue issuances.
Section 6. Separability Clause. - If any provision, section or part of this Act shall
be declared unconstitutional or invalid, such judgement shall not affect, invalidate or impair any other provisions, sections or parts hereof.
Section 7. Repealing Clause. - All laws, acts, decrees, executive orders,
issuances, and rules and regulations or parts thereof which are contrary to and inconsistent with this Act are hereby repealed, amended or modified accordingly.
Section 8. Effectivity. - This Act shall take effect fifteen (15) days following its
publication in at least two (2) newspapers of general circulation or in the Official Gazette. Approved,