Business and labor groups are calling for the removal of value-added tax (VAT) on electricity sales, warning that the Philippines’ persistently high power rates remain one of the biggest complaints of both local and foreign investors and a major drag on the country’s competitiveness.
In a rare show of unity, the Philippine Chamber of Commerce and Industry (PCCI), Employers Confederation of the Philippines (ECOP), Philippine Exporters Confederation (Philexport), and the Trade Union Congress of the Philippines (TUCP) jointly endorsed House Bill 6740 on December 10.
The measure, authored by TUCP Party-list Representative and House Deputy Speaker Raymond Mendoza, seeks to exempt electricity sales from VAT.
Rather than viewing the proposed VAT exemption as a revenue loss, the groups argued it should be treated as a strategic investment that would generate returns through higher economic activity, increased business confidence, and a broader tax base over time.
In a news release, they said electricity is a basic and indispensable input for households and businesses alike, noting that removing VAT would provide immediate relief to consumers while lowering operating costs for enterprises.
“A VAT exemption on electricity will provide direct and immediate relief to the Filipino people. Removing this burden shows our faith that Filipinos can achieve their highest potential if we stop weighing them down with excessive taxation on our already expensive power,” Mendoza said.
“This is not only an economic measure; it is a social protection that safeguards workers and families. The benefits of cheaper power for both small entrepreneurs and major industries to grow, attract more investments, and generate decent employment for our people do not merely offset but far outweigh the cost to the Government,” he added.
Business groups stressed that high electricity prices continue to undermine the Philippines’ attractiveness as an investment destination, particularly for manufacturing and other energy-intensive industries.
“If we want to attract investors and grow our industrial base, we must address power costs head-on,” said PCCI President Enunina Mangio. “Removing VAT on electricity is a concrete step toward making the Philippines more competitive.”
Lower power costs, the groups said, would also help protect existing jobs while enabling companies to expand and hire more workers.
“With more affordable power, industries can scale up operations, while micro, small, and medium enterprises can better manage rising expenses and sustain employment,” said George Barcelon, PCCI Chairman and Director of the Energy Committee.
The groups pointed out that the Philippines is competing regionally for a new wave of investments, particularly in energy-intensive sectors such as data centers, advanced manufacturing, and digital infrastructure.
PCCI Chairman for Energy and Power David Chua said: “We are in a global race for high-value, energy-intensive investments. Lowering electricity costs through a VAT exemption signals that our country is serious about attracting industries that create quality jobs.”
TUCP Vice President Luis Corral welcomed the unified position of employers and labor, saying it marked a shift away from short-term relief measures toward more structural solutions.
“The endorsement by business groups and the TUCP to exempt electricity sales from VAT is heartening. Finally, employers and labor have unanimously agreed that this is the measure that will free up workers and consumers from the burden of VAT and at the same time, trigger the creation of more and quality jobs for Filipino workers with prospects for better livelihoods. This is the better approach than the age-old palliatives and ayuda,” Corral said.