The Department of Energy (DOE) and the Department of Finance (DOF) have issued a joint memorandum circular granting electric cooperatives (ECs) across the Philippines exemption from local taxes, fees, and charges imposed by local government units (LGUs). Signed on Wednesday by Energy Secretary Raphael Lotilla and Finance Secretary Ralph Recto, the new policy aims to ease the financial burden on ECs, enabling them to reinvest savings into service improvements and the expansion of electrification efforts in underserved areas.
Under the circular, all ECs registered with the National Electrification Administration (NEA) or the Cooperative Development Authority (CDA) will qualify for tax exemptions, provided they meet NEA’s financial and operational standards. To ensure eligibility, ECs must secure an annual certificate of compliance from NEA, achieving at least a 75 percent rating based on parameters such as collection efficiency, net worth, and system reliability.
While the tax exemptions will apply to local levies like real property taxes and franchise taxes, ECs will still be liable for administrative costs such as business permit fees, mayor’s permits, and community tax certificates.
NEA administrator Antonio Mariano Almeda, who witnessed the signing, called the move a vital step in addressing the financial challenges faced by ECs. He emphasized that this initiative reflects the government’s commitment to providing equitable financial support to these cooperatives, ultimately benefiting both the organizations and their member-consumers.
Secretary Lotilla said the reduction in financial burden allows the ECs to focus more on their mission of achieving 100 percent electrification, bringing power to the most remote and underserved communities in the country.
The NEA is set to issue detailed guidelines for the certificate of compliance process within the next 15 days.
