Dinner is over and the waiter brings your bill. Your meal is there. Underneath it: a steak from another table, partly charged to you; a charge from a branch across town you’ve never visited; a debt you know nothing about; and other things you never ordered.
Then there are the taxes.
Some of those charges may be justified. A community sometimes decides that one diner should help another. But you would still ask: What am I paying for? Who benefits? Who pays? When does it end?
That is one way to read a Philippine electricity bill: not only as the price of power used, but as a financing instrument for old debts, social subsidies and public policy.
We have already met one: system loss. Some electricity is lost through wires and transformers as a matter of physics, but physics sets a floor, not a standard. Overloaded equipment, poor network design and deferred maintenance raise the loss. The benchmark is efficient loss, not zero loss. Non-technical loss-theft, metering error and unbilled accounts-is different. Yet allowable loss is recovered from paying consumers because regulation decides who bears it.
When the Electric Power Industry Reform Act of 2001 (EPIRA), Republic Act 9136, restructured the industry, the National Power Corporation (NPC) carried enormous obligations and long-term power-purchase contracts. EPIRA created the Power Sector Assets and Liabilities Management Corporation (PSALM) to take over NPC’s assets, liabilities and independent power producer contracts, privatize the assets, and apply the proceeds against those obligations. The Universal Charge was created, among other things, to pay NPC’s stranded contract costs and debts.
The wind-down has progressed slowly. PSALM records show inherited obligations of P1.241 trillion in 2003 down to P260.6 billion at end-2025. Yet last year Congress enacted Republic Act 12179, extending PSALM’s corporate life 10 years to June 2036-a decade past the sunset EPIRA wrote for it.
Even Malampaya was enlisted. The Murang Kuryente Act, Republic Act 11371, earmarked P208 billion of the net government Malampaya share for those stranded costs and closed the Universal Charge to new stranded-cost recovery; in 2021 the Energy Regulatory Commission (ERC) denied PSALM’s P10.8-billion application on that ground. The cost moved to the country’s gas revenue.
Not every old obligation was a mistake. Some bought needed infrastructure or answered an earlier crisis; others were simply costly, or misallocated risk.
The Bataan Nuclear Power Plant is the extreme case. It never entered commercial operation, yet its debt was serviced until April 2007; one historical accounting puts principal and interest at P65 billion. The line on today’s bill doesn’t say so, but a poor or corrupt energy decision can outlive the politicians and policymakers who made it.
The Philippines is not alone in using the electricity bill to finance policy. Germany funded its renewables build-out through a surcharge on power bills for two decades; Britain still does. In 2022 Germany moved the surcharge to the budget, where progressive taxation makes higher earners shoulder more. Your electric bill is blind. It cannot tell how rich you are.
Put the cost in the budget and taxpayers pay. Put it on the electricity bill and ratepayers pay. Borrow, and future taxpayers pay. Or make one class of electricity customers subsidize another.
An electricity charge does not ask what the payer can afford. It distinguishes only between those who benefit and those asked to finance it-and either may be a poor household, a middle-income family or a small business.
Three social subsidies show why that matters.
Missionary electrification supports areas off the main grid, where small systems, thin demand and diesel make electricity expensive. An archipelago cannot promise electricity only where a commercial spreadsheet turns green.
The subsidy is large and growing. For 2026 NPC asked P34.8 billion and was allowed P30.8 billion. In March it asked P44.2 billion for 2027, raising the basic rate by two-thirds to P0.4405 per kilowatt-hour. On-grid consumers pay it. Every subsidy owes one answer: bridge toward viability, or permanent address?
The lifeline rate presents a different difficulty: identifying poverty. Consumption proved an imperfect proxy. A 2024 study by Kris Francisco for the Philippine Institute for Development Studies found that 44 percent of households below the 100-kilowatt-hour threshold were neither poor nor 4Ps recipients and had no senior citizen member. That group had the highest per capita income of the four.
Republic Act 11552 tightened eligibility to 4Ps beneficiaries and other marginalized households meeting prescribed criteria. In January 2026, by Resolution No. 02, the ERC set a uniform national subsidy of one centavo per kilowatt-hour, pooled in a PSALM-administered fund, with a full discount up to 50 kilowatt-hours. It does not make the subsidy free; it makes the payer national.
The senior citizen discount is smaller: five percent under Republic Act 9994, on up to 100 kilowatt-hours, on a meter in the senior’s own name, financed by other consumers. The point is not that seniors need no help. It is that age is not income: households with a senior member had the second-highest per capita income in the same study.
Other charges finance energy policy rather than social policy.
The Feed-in Tariff Allowance (FIT-All) supports renewable generators under the feed-in tariff program created by Republic Act 9513. By September 2025, the National Transmission Corp. (TransCo) reported P215.27 billion, or 97.6 percent, of FIT obligations paid. In August it asked for a 2027 rate of P0.2154 per kilowatt-hour, requiring P25.1 billion.
The Green Energy Auction Allowance (GEA-All) supports renewable developers awarded capacity through the Green Energy Auction Program. Its approved P0.0371-per-kilowatt-hour rate is suspended through December 2026. Neither FIT-All nor GEA-All redistributes income; both buy a different future generation mix. Renewable energy may reduce imported-fuel exposure and yield environmental benefits, but benefits still need financing. Government makes the policy; consumers finance it.
How much is being asked for? Add the 2027 numbers: P0.4405 for missionary electrification, P0.2154 for FIT-All, P0.0371 for GEA-All, one centavo for the lifeline fund, and a quarter-centavo for the environmental charge. The first two are petitions; GEA-All is approved but suspended through December 2026. If all five apply in 2027, they total about 70 centavos per kilowatt-hour, before generation, transmission, distribution or tax. At the ERC’s 2026 sales forecast of 111,366 gigawatt-hours, that is roughly P80 billion in one year. If rates and sales remain near those levels, the cumulative amount would exceed P400 billion through 2031.
Then there are taxes.
Here the arithmetic is cleaner. Remove value-added tax (VAT) and government collects less tax. Remove a system-loss charge and the lost electricity does not disappear. The first changes tax incidence; the second reallocates risk.
Several bills before Congress would exempt system loss from VAT; others would abolish or restrict recovery of the loss itself. Deleting a cost and reallocating one are different operations. If Congress does the second without deciding where the cost lands, the Ice Seller returns: the line disappears, the missing ice remains, and somebody receives the bill.
The Universal Charge shows how several policies come to share one mechanism: missionary electrification, stranded contract costs, stranded debts, an environmental charge. Two of the four are now closed to new recovery. The mechanism remains.
A charge is not illegitimate merely because the customer did not choose it. But compulsion raises the standard of justification.
Put the diner’s four questions to every item on the bill. What are we paying for? Who benefits? Who pays? When does it end?
Subsidize openly and target carefully. Recover efficient costs, not avoidable failures. Measure results. Always name the payer.
Nearly every charge here rests on a statute, a regulation or a government decision. The monthly bill is, in part, a statute book printed in pesos.
The next installment opens that statute book while Congress is still writing it.
Atty. Laurence R. Rogero is an infrastructure lawyer with three decades of experience in the Philippine and international power and water sectors. He is Lead Independent Director of an infrastructure holding company with interests in energy and water. He lectures at the Ateneo de Manila University, and is pursuing postgraduate studies in economics. He graduated magna cum laude from the UP School of Economics, earned his law degree from UP, and obtained an LL.M. with Distinction from Georgetown University as a Fulbright Fellow. The views expressed are the author’s own and should not be attributed to any institution with which he is affiliated.