CitizenWatch Philippines has called on the Department of Energy (DOE) to ensure the timely enforcement of value-added tax (VAT) exemptions on electricity generated from indigenous natural gas, saying consumers should already be benefiting from the mechanism.

The group said the exemption, covered under Bureau of Internal Revenue Revenue Regulation No. 002-2026, removes the 12% VAT on the purchase and sale of indigenous gas, aggregated gas, and electricity generated from local gas sources.

CitizenWatch said the tax break stems from the Philippine Natural Gas Industry Development Act, which was enacted early last year to strengthen energy security, promote the use of indigenous energy resources, and shield consumers from volatile global fuel prices.

“This reform was intended to help make electricity rates more manageable for consumers by lowering the cost of locally sourced energy,” explained Kit Belmonte, co-convenor of CitizenWatch Philippines.

The group emphasized that while the policy framework is already in place, implementation needs to bridge the gap from concept to execution so that the intended benefits actually reach households and businesses.

“We believe the DOE can play an important leadership role in making sure the intent of the law translates into actual savings for consumers,” Belmonte said.

CitizenWatch urged the DOE to issue clear implementing guidelines, provide policy direction, and coordinate with stakeholders to ensure the proper application of the VAT exemption across the sector.

It also called on generation companies and other industry participants to reflect the exemption in their pricing and billing, consistent with applicable rules and certifications.

“If the tax no longer applies, then the corresponding savings should be passed on as soon as practicable,” Belmonte said.

The group stressed that the need for lower electricity costs has become more and more urgent amidst renewed volatility in global fuel markets, particularly for import-dependent countries such as the Philippines.

“Consumers have waited for this relief, and they deserve to see its benefits reflected in their power bills,” Belmonte concluded.

CitizenWatch said maximizing the use of domestic energy sources is a practical step toward improving price stability and reducing exposure to external shocks.

How soon should policy reforms like tax exemptions translate into actual savings on electricity bills?

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