DOE supports VAT reduction on electricity

MANILA, Philippines — The Department of Energy supports proposals to suspend, reduce or remove the value-added tax on electricity, noting that such recommendations – if adopted – could help lower electricity costs for consumers.

In a statement, the DOE said lowering power rates would benefit households and businesses, but stressed that any adjustments in tax measures must be carefully evaluated by economic managers and lawmakers to ensure that government services are not affected.

It emphasized that while tax policy falls under the mandate of the Department of Finance and Congress, the DOE stands ready to provide technical inputs on the potential impact of proposed measures on the energy sector.

The agency emphasized the need for a balanced approach that protects consumer welfare while maintaining fiscal sustainability.

The DOE also underscored that long-term electricity affordability should be pursued through reforms in the energy sector, including more efficient power generation, improved grid reliability, increased competition and responsible energy use.

Also part of initiatives to ease the burden on the public of the effects of the Middle East war, the Department of Budget and Management (DBM) has directed all government agencies to identify potential savings from unspent allotments from last year’s budget, to contribute to funding relief measures.

The DBM, through National Budget Circular 603, said all agencies must identify “unobligated allotments” for programs, activities and projects under the 2025 continuing appropriations to be declared as savings amid a national energy emergency.

Under this directive, agencies – including government departments, state universities and colleges and state run firms – must review unobligated allotments reported in the Financial Accountability Reports and identify portions of funds that can no longer be utilized.

“The total amount identified shall be declared and offered as savings,” the DBM said. The agencies have until May 15 to identify the savings and submit a report to President Marcos.

P12 billion to P25 billion savings

Budget Secretary Rolando Toledo earlier said cost-saving measures are expected to generate between P12.8 billion and P25.6 billion from March to December 2026, depending on the level of compliance. The DBM earmarked around P238 billion for the oil crisis response.

At the same time, the DBM said it released P43.180 billion, through the Department of Social Welfare and Development (DSWD), to support financial assistance, food support, pensions and livelihood programs for vulnerable Filipinos.

The agency said this is “intended to sustain critical social protection interventions and fast-track the release of aid to families most affected by ongoing economic pressures.”

Of the amount, the bulk will go to the Protective Services for Individuals and Families in Difficult Circumstances, with an allocation of P36.87 billion.

The Sustainable Livelihood Program, in addition, will receive P810 million to support poor, vulnerable and marginalized households in building sustainable sources of income. — Aubrey Rose Inosante, Emmanuel Tupas