This paper provides background information on the country’s power sector and examines the impact of the COVID-19 pandemic on the energy tax collection of the government.
The Energy Tax is levied on every residential consumer's monthly electric power consumption exceeding 650 kilowatt-hours (kWh) pursuant to Batas Pambansa Bilang 36 issued in 1979. The tax is a market-based instrument that serves as a tool to discourage excessive power usage.
During the pandemic, there was a spike in the electricity usage in the residential sector as Filipinos were confined in their homes. The long hours of using gadgets such as computers and laptops were necessary to ensure that work and online classes were undisrupted. In addition, the increase in electricity consumption can also be attributed to the substantial utilization of cooling equipment, especially in the summer months.
As the country is recovering from the pandemic, more businesses and schools are expected to return to physical reporting. This may increase the demand for electricity in the industrial and commercial sectors and eventually lower the demand for electricity in the residential sector. The possibility of restructuring the schedule of the Energy Tax to generate additional revenues for the government is also worth exploring because of the country’s increasing revenue requirements and as an important measure to improve energy efficiency to prevent the mounting energy crisis that the country may experience in the coming years.