Advocate urges early passage of Enrile bills

MANILA, Philippines - Following recent fluctuations in power rates, an advocacy group voiced its renewed support for Sen. Juan Ponce Enrile’s pending twin power rate reduction bills.

The Center for Organizational Studies and Advocacy (COSA) stressed that, if these senate-sponsored bills (Senate Bill 3147 and Senate Bill 3148) were passed earlier, these would have reduced the generation costs, which would have reflected in lower power rates.

COSA chief advocate Rafael de la Torre said these Enrile-sponsored twin power bills, which propose to forgo of royalty and taxes on indigenous sources of power, will further stimulate the economy through revitalized consumer spending and revived business activity. 

SB 3147 proposes that the government charge a uniform three percent national franchise tax on distribution revenues of distribution utilities in lieu of all taxes. To date, distribution utilities are duly charged by the government with VAT, franchise tax, real property tax, income tax, regulatory fees, import duties and other taxes and fees. 

On the other hand, SB 3148 proposes to lower government royalty tax on indigenous energy sources from 60 percent to three percent of all net proceeds from the sale of the fuel to power generation companies. This bill, when passed into law, will have a significant difference in the cost of generation charges.

“Currently, the generation charge is the single biggest component of the consumer’s electricity bill, comprising almost 60 percent of the electricity bill. It was also reported that the Philippines is the sole country in the world which collects 60 percent royalty tax on indigenous fuel resources. Other neighboring countries have no such kind of taxes,” said de la Torre.

The COSA chief advocate also pointed out that these bills will provide the public with a better understanding of the power industry by showing clear distinction and differentiating each bill component – generation charges, transmission charges, distribution charges, universal charges, system loss, taxes and other charges – by completely attributing each particular component to its distinct source.

“Understandably, distribution utilities (DUs) bear the brunt of the ire of consumers every time there is an adjustment. But this should not be so in the interest of justice and fairness,” said de la Torre.

“We gathered that the cost of generation once again incurred an upward adjustment and this would surely affect electric power customers,” he added.

The Enrile bills have also placed in sharp focus the fact that generation charges are the single biggest component in the consumers’ electric,” the lawyer-advocate pointed.