Department of Finance to assess revenue impact of Enrile bills

MANILA, Philippines - The Department of Finance (DOF) will assess the revenue impact of the twin power reduction bills of Sen. Juan Ponce Enrile against the supposed economic boost the bills offer.

Finance Secretary Margarito Teves told reporters the government stands to lose about P21 billion in revenues should the two measures are implemented.

The proposed reduction of royalties from power projects will mean foregone revenues of P14 billion for the government while another P7 billion will be lost from the proposed franchise tax scheme. 

“We need to validate and work closely with the assumptions provided by Senate president Enrile,” Teves said.

He said they would determine whether the economic activities stimulated by the bills will more than compensate for the losses in government’s coffer.

“We will work closely with the staff of the senator as to whether our suggested estimates are valid and whether there will be a revenue impact,” Teves said. “I believe there will be a revenue impact, to what extent is something that we need to validate and cross check with the assumptions that were used by the staff of Sen. Enrile.”

Teves said the bills are good for the Filipino consumers.

“Actually in terms of the direction, I have no problem. In terms of the timing because of the revenue impact, that is our concern. But the final decision as to whether this will be passed is an act of Congress,” he added. 

For his part, Enrile said government should rethink and review its fiscal policies and directions.

“The people can no longer bear more impositions at this time in the name of revenue generation,” he said.

Enrile said Senate Bill 3282 or the proposed Electricity Rate Reduction Act that will bring down power rates by up to P2 per kilowatthour for 12,000 industrial users and 60 centavos per kwh to P1 per kwh for lifeline consumers.

SB 3147, meanwhile, seeks to revert to the old system of imposing a franchise tax on the distribution income of power distribution utilities including electric cooperatives around the country.

The lawmaker said the two bills will likely be passed on third reading at the Senate early next month and passed into law before the end of the year.

“The impact of a significant reduction in electricity prices in a country reputed to have one of the highest power rates in the region will be greatly felt. The ultimate effect will far outweigh the reduction of the royalty of government,” Enrile said.

Enrile’s power reform bills have earned multi-sectoral support. The removal of excise taxes on electricity consumption has been consistently advocated by the Gabriela Women’s Party and the National Association of Electricity Consumers for Reform.

Other business groups have been pushing for immediate government action on Enrile’s power reform bills.

Philippine Chamber of Commerce and Industry (PCCI) president Edgardo Lacson has expressed particular support for SB 3282 which, he said, will enhance the competitiveness of business enterprises.