Meralco backs stimulus package for power sector

MANILA, Philippines – Power utility giant Manila Electric Co. (Meralco) has expressed support to the twin “stimulus package” bills filed by Senate president Juan Ponce Enrile for the power sector.

“Yes, we support them as these will bring down the rates charged to consumers,” Meralco treasurer Rafael Andrada said.

Senate Bill 3147 or the Uniform Franchise Tax on Distribution Utilities was filed last April 1 and was subjected to a hearing by Senate Ways and Means Committee last April 21.

Meralco said there is a provision in the proposed law that public services should not be taxed, because it is the government’s responsibility to provide these services.

SB 3147 proposed a three-percent national franchise tax on gross distribution income of DUs in lieu of all other taxes such as income tax, value-added tax or business taxes.

A counterpart House Bill 6208 was filed last April 15 at the House of Representatives.

The power firm said SB 3148, on the other hand, proposes a government share reduction to three percent of the net proceeds from the sale of indigenous energy resources used for power generation.

This bill, Meralco noted, will impact on such resources as the Malampaya natural gas and geothermal energy resources, which account for almost half of power generation nationwide.

Under this bill, energy efficient users like the industries and marginalized end-users will be given priority for the electric rate reduction.

A counterpart bill in Congress, HB 6207, was also filed last April 15.

In a separate statement, Enrile likened the measures to a “stimulus package” during a time of economic crisis.

“Taxes lost to implement SBs 3147 and 3148 should be seen as part of a much needed ‘stimulus’ package that will redound to more benefits to the economy. Instead of the more arduous cycle of charging power and utility firms with high taxes or royalties to distribute these tax earnings later on in random to people, why not lower these taxes to lower electricity rates which shall directly benefit all electricity consumers,” Enrile said.