Meralco Taxes and Universal Charges Explained
TL;DR
Taxes and other government-mandated charges make up about 11% of a typical Meralco bill: VAT and energy tax to the national government, real property and franchise tax to local governments, universal charges to PSALM for missionary electrification and watershed rehabilitation, and subsidy charges that fund discounts for 4Ps beneficiaries and senior citizens. In August 2026 this bucket rose a net ₱0.2113/kWh, mostly from FIT-All. Solar reduces the per-kWh items proportionally; it doesn't touch the flat subsidy programs, which exist independently of your own usage.
Beyond generation, transmission, and distribution, a Meralco bill carries a cluster of government-mandated charges: taxes, subsidies for other customers, and a universal charge that funds programs having nothing to do with your own household. Together they run about 11% of a typical residential bill on a 2025 average, source: Meralco, Breakdown of Charges.
What’s actually in this bucket
Per Meralco’s own published breakdown, this line groups several distinct charges:
- Government taxes — value-added tax and an energy tax applied to residential customers consuming over 650 kWh, both remitted to the national government. Real property tax and local franchise tax go to local government units instead.
- Lifeline Subsidy — a bill discount for 4Ps beneficiaries and certified marginalized customers consuming 100 kWh or less, remitted to PSALM.
- Senior Citizen Subsidy — a bill discount for senior citizens consuming 100 kWh or less, and for DSWD-accredited institutions for the elderly.
- Universal Charges, which fund three things: Missionary Electrification (extending service to remote, off-grid communities), the Environmental Charge (a fixed ₱0.0025/kWh for watershed rehabilitation, managed by the National Power Corporation), and NPC stranded debts, the unpaid financial obligations of the old National Power Corporation.
The lifeline and senior citizen subsidies and the universal charge are all remitted to PSALM, the Power Sector Assets and Liabilities Management Corporation.
Two other renewable-energy charges often get lumped into “taxes and other charges” in Meralco’s monthly advisories but are large and specific enough to deserve their own explanation: FIT-All, see our dedicated FIT-All page, and its sibling, GEA-All (Green Energy Auction Allowance), which funds renewable projects selected through competitive bidding and is also remitted to TransCo. GEA-All normally runs ₱0.0371/kWh, but collection remained suspended in August 2026 by ERC order, per Meralco, Lower Rates This August 2026.
What moved in August 2026
Meralco reported taxes and other charges rose a net ₱0.2113/kWh for August 2026. The two named drivers:
- The ERC-approved ₱0.1348/kWh FIT-All increase, the single largest piece of the jump. See the FIT-All explainer for why the fund needed the adjustment.
- A roughly ₱0.04/kWh rise in taxes, from First Gas/Prime CoreGen’s greater use of alternative fuel (liquefied natural gas and liquid condensate), which is subject to 12% VAT, in place of the VAT-exempt Malampaya natural gas that was unavailable during a maintenance shutdown.
Source: Meralco, Lower Rates This August 2026.
Does solar reduce these charges?
Partially, and it depends which item. The per-kWh charges, VAT, energy tax, the universal charge, FIT-All, and GEA-All when active, are all billed against the grid power you actually buy. A kWh your panels generate and you use immediately was never bought from Meralco, so none of these per-kWh charges apply to it. That offset works the same way it does for generation: proportional to however much grid consumption solar displaces.
The lifeline and senior citizen subsidies aren’t something your own solar system changes either way. They’re discounts funded collectively through the universal charge, applied to other qualifying low-usage households, not a charge tied to your own consumption pattern.
Power you export under net metering is credited at the generation rate only, so it doesn’t offset any of these tax and universal-charge line items on the power you still import. For the current all-in rate these charges are part of, see the Meralco rate per kWh page, and for the month-by-month trend, the Meralco rate history archive.
Frequently asked questions
What counts as 'taxes and other charges' on a Meralco bill?
Value-added tax, energy tax on high-usage accounts, real property tax, local franchise tax, the lifeline and senior citizen subsidies, and the universal charge, which itself covers missionary electrification, an environmental charge, and NPC's stranded debts. FIT-All and GEA-All are sometimes grouped in this bucket too, though each has its own explainer on this site.
Who receives Meralco's tax and universal charge money?
It splits by charge. VAT and energy tax go to the national government. Real property tax and local franchise tax go to local government units. The universal charge and the lifeline and senior citizen subsidies are remitted to PSALM, the Power Sector Assets and Liabilities Management Corporation.
Does solar reduce the taxes on my Meralco bill?
The per-kWh items, VAT, energy tax, and the universal charge, drop proportionally with every kWh you stop buying from the grid. The lifeline and senior citizen subsidies aren't something solar reduces or increases; they're bill discounts for other qualifying customers, funded by everyone's universal charge.