MANILA, (PIA) — All electric cooperatives (ECs) in the country, whether registered with the National Electrification Administration (NEA) or the Cooperative Development Authority (CDA), will not have to pay local taxes, fees, and charges if they meet NEA’s financial and operational standards.
Energy Secretary Raphael P.M. Lotilla and Finance Secretary Ralph G. Recto, with Undersecretary Bayani Agabin representing him, signed a Joint Memorandum Circular on December 4, 2024. This Circular gives guidelines for electric cooperatives to access preferential rights under Republic Act (RA) No. 7160, in connection with RA No. 10531. Electric cooperatives must obtain an annual Certificate of Compliance from the NEA to show they meet the required financial and operational standards.
To qualify for this certification, ECs must achieve a minimum score of 75% according to NEA’s compliance rules. These rules include ensuring high collection efficiency, maintaining a positive net worth, meeting reliability and loss standards, conducting annual meetings and elections on time, completing electrification projects for full customer connection, and submitting reports to the NEA promptly.
All ECs must still follow the reasonable administrative costs set by LGUs, as stated in the Joint Memorandum Circular No. 2019-01 from the Department of the Interior and Local Government (DILG) and the Department of Finance (DOF). This Circular outlines the rules for fair rates of regulatory fees and service charges that LGUs can impose. These costs cover fees for business permits, mayor’s permits, barangay clearances, community tax certificates, and other charges like water, electricity, and toll fees.
The NEA plans to release the rules for issuing the Certificate of Compliance within fifteen days after the Joint Circular takes effect.
“This local tax exemption is a significant milestone for our qualified ECs, as it directly translates to reduced financial burdens that can be reinvested into improving services and achieving 100 percent total electrification,” Secretary Lotilla said.
“By reducing these costs, we empower them to focus on expanding access to electricity, especially in unserved and underserved areas, ensuring no Filipino household is left behind,” the Secretary added. (JLN/PIA-NCR)
