PHILIPPINES: House Majority Leader Ferdinand Alexander Marcos is pushing a proposal that would grant free electricity to low-consumption households, shifting the burden of subsidies from other consumers to the national government, the PNA reported.
House Bill No. 2700, or the proposed Free Electricity for Low-Consumption Households Act, aims to replace the current cross-subsidy system with a direct government subsidy. Under the plan, qualified households would have their electricity bills fully covered up to a set monthly threshold. The subsidized portion would also be exempt from the 12 percent value-added tax.
Who qualifies?
An eligible household is defined as a residential consumer whose average monthly consumption over the past three months does not exceed 135 kilowatt-hours, or whose monthly electricity bill does not go beyond PHP2,000, whichever is lower. Certification will be handled by the Energy Regulatory Commission and the Department of Energy.
Marcos said the current lifeline rate system and senior citizen discounts are funded through cross-subsidies. This means other electricity users shoulder part of the cost. A December 2024 study by the Philippine Institute for Development Studies found that lifeline discounts vary depending on the financial capacity and customer base of each distribution utility.
HB 2700 seeks to correct these distortions by using public funds directly, instead of passing costs on to other consumers. The measure also aims to standardize implementation nationwide and ensure that subsidies go only to qualified households.
If a household exceeds the set threshold in a given month, it will pay the full bill for that billing period. However, this will not automatically remove the household from future eligibility, as long as it continues to meet the criteria.
Distribution utilities will be required to issue zero-charge bills to validated beneficiaries and submit reimbursement claims to the DOE. These claims will be subject to strict audit by the Commission on Audit.
To avoid disruption, the bill proposes a two-year transition period where the new direct subsidy will run alongside existing lifeline rates and other electricity discounts. During this time, authorities will review whether to fully replace the old system or allow both to continue.
If passed, the measure would mark a major shift in how electricity subsidies are funded, with the government directly covering costs for low-income, low-consumption households.