Marcos pushes lower power costs, bigger tax breaks

By Rjay Zuriaga Castor

QUEZON CITY — President Ferdinand Marcos Jr. has urged Congress to pass a series of energy and tax reforms aimed at lowering electricity costs and easing the financial burden on Filipino workers and small businesses, including scrapping system loss charges and expanding income tax exemptions.

On Monday, July 27, Marcos received his first standing ovation in his fifth State of the Nation Address as he called for the amendment of Republic Act No. 9136, or the Electric Power Industry Reform Act (EPIRA) of 2001.

“Kung pagbawas ng presyo ang usapan, sa aking palagay, panahon na para tanggalin na natin ang system loss na ipinapasa sa consumer,” he said.

“Pinapasa ito sa consumer at kinakarga sa bill na pinapatungan pa ng value-added tax (VAT). Hindi naman kasalanan ng consumer kung bakit nagkaroon ng system loss. Kaya hindi naman tama na sila pa ang pagbabayarin dito,” he added.

EPIRA gave the Energy Regulatory Commission (ERC) authority to set and approve rates, including rules on system loss recovery from consumers.

System loss is the portion of electricity that distribution utilities lose in their network — through technical losses, theft, or other inefficiencies — and EPIRA allowed that cost to be passed to consumers under ERC regulation.

Both EPIRA and Republic Act No. 7832, the Anti-Pilferage of Electricity Act, permit utilities to recover part of that loss from end users, and the charge appears as a separate line item on monthly bills.

For instance, if a distribution utility buys or generates 100 units of electricity but only 95 reach customers because of line losses or non-technical losses, the cost of the missing 5 units may be recovered through the system loss charge.

“We demand for the immediate amendment of EPIRA, and to prohibit charging system [losses] against consumers, including the VAT thereon,” Marcos stressed.

Nuclear energy back on the table

Marcos also said the government is prepared to revisit the country’s nuclear energy program as part of efforts to strengthen energy security and reduce electricity costs.

“Perhaps, it is time for us to revisit nuclear energy production,” he said.

The president noted that nuclear technology is already being used in the Philippines in medicine, agriculture, water filtration, and plastic upcycling, expressing confidence that nuclear power could help reinforce the country’s energy supply.

“We are confident in its capacity to reinforce our energy security and bring down the cost of electricity in our country,” he said.

Marcos assured the public that safety would remain the government’s top priority.

The country’s only nuclear plant, the 621-megawatt Bataan Nuclear Power Plant, was completed in 1984 but never operated, and was mothballed in 1986 over safety, cost, and corruption concerns; its possible revival now rests with the Philippine Atomic Energy Regulatory Authority, the independent regulator created under a 2025 nuclear safety law.

The president also announced that the government is closely monitoring around 200 energy projects scheduled for completion before the end of his term, with a combined capacity of nearly 10,000 megawatts (MW).

Forty-five projects have already been completed, 31 are expected to be finished this year, while 124 more are targeted for completion by 2028, according to Marcos.

He added that energy storage projects with a combined capacity of more than 1,700 MW are also underway, providing additional energy security for nearly 30 million households and industries by 2028.

Marcos said the government continues to prioritize renewable and indigenous energy sources, noting that more than 60 new geothermal, solar, hydro, wind, and biomass power plants have been added under the administration.

The president also highlighted the extension of the Malampaya Service Contract until 2039, saying renewed drilling operations uncovered an estimated 222 billion cubic feet of natural gas, enough to supply electricity to about 1.6 million households until 2034.

He said the administration has awarded 14 petroleum service contracts across Luzon, Visayas, and Mindanao — the highest number issued during a single presidential term — with four dedicated to hydrogen production.

Marcos also announced that the country has begun developing hydrogen power plants, with projects now in their pre-development stages in Marinduque, Masbate, Zamboanga Sibugay, Basilan, and other potential sites.

To further reduce electricity costs, Marcos asked Congress to pass the proposed “Sariling Kuryente” Act, which seeks to simplify and make more affordable the installation of solar panels and battery storage systems in households.

He said the measure would allow more Filipinos to generate their own electricity while complementing the government’s broader strategy to strengthen energy security and lower power costs nationwide.

“Ang mga nagdaang buwan ay nagpaalala sa atin na kailangan nating paramihin ang pinagkukunan natin ng kuryente. Ito ay isang tanda ng pagiging matatag na bansa,” he said.

Tax relief for workers, small businesses

Marcos also urged Congress to pass a sweeping tax relief package aimed at easing the financial burden on middle-class workers and small businesses.

Among his requests are expanding income tax exemptions, lowering income tax rates, and granting tax amnesty for unpaid obligations.

Marcos said the measures are intended to help workers and entrepreneurs recover from the lingering effects of recent economic crises while promoting long-term economic growth and fairness.

“To ensure the continued progress of the middle class amidst the lingering effects of the crisis, we will pursue tax relief measures that promote growth, that generate revenue, and advance equity toward socioeconomic sustainability,” he said.

Marcos asked Congress to expand the income tax exemption by increasing the annual tax-free income threshold to PHP 350,000, allowing more Filipino workers to be exempt from paying income tax.

He also proposed reducing income tax rates for employees who earn above the exemption threshold.

Marcos called for the removal of the minimum corporate income tax for small businesses, saying the measure would provide relief to entrepreneurs and encourage business growth.

The president likewise sought congressional approval for a tax amnesty covering unpaid income tax, estate tax, donor’s tax, and VAT, including the corresponding penalties.

“Bilang natatanging proteksyon sa kanila at para mas mapakinabangan nila ang pinaghirapan nilang kita, nananawagan ako sa kongreso upang maipasa ang batas na magbibigay ng bahagyang ginhawa sa ating bayaring buwis,” Marcos stressed.