Press Release
September 1, 2009


Senate President Juan Ponce Enrile yesterday filed a bill repealing the energy tax on electric power consumption, thus lowering the cost of electricity.

In Senate Bill No. 3419, Enrile sought to repeal Batas Pambansa Building 36, entitled "An Act Imposing An Energy Tax On Electric Power Consumption", which was enacted in September 7, 1979.

In his explanatory note, Enrile said that while the law was enacted as an energy conservation measure, it is now considered "unnecessary and redundant as other rate mechanisms are already in place which may also serve as incentives to achieve energy conservation."

Enrile said that BP 36 imposed an energy tax on residential consumers which utilizes more than 650 kilowatt hours (kwh) monthly, the cost of which increases from P 0.10 per kwh to as much as P 0.35 per kwh as power consumption increases.

"In 2008 alone, the government collected about P150 million from household consumers all over the country under the Energy Tax. Yet very few probably even know that this law exists and is still applied to our consumption costs," Enrile declared.

However, Enrile observed, "The existing residential electricity tariffs are already structured to encourage energy conservation. In the Meralco franchise area, the average residential usage of electricity today is about 180 kWh. The figure is likely lower for households outside Meralco's coverage.

"As a principle, public utilities ought not be used as sources of public revenue as these public utilities render public services to the taxpayers. It is high time to review and harmonize existing laws and, if necessary, repeal those which are already redundant or which have failed to achieve its stated objective," he stressed.

He explained that his bill sought to repeal Batas Pambansa Blg. 36 "to discontinue the imposition of the energy tax, which will directly translate to lower power rates and will provide immediate relief to affected consumers. "

The bill establishes "the policy of the State to ensure the quality, reliability, security, and affordability of the supply of electric power. The State likewise recognizes the need to protect the consumers from excessive and unreasonable impositions that will unduly provide an additional financial burden to the public."

Under Section 2, the bill says that any "provision of law to the contrary notwithstanding, Batas Pambansa Bilang 36, entitled "An Act Imposing An Energy Tax on Electric Power Consumption" is hereby repealed."

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