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System losses remain the talk of the town months after President Ferdinand Marcos Jr. promised to remove them in his 2026 State of the Nation Address last July.
Starting this billing cycle in October, consumers will no longer have to pay value-added tax on the system loss charge.
But that is only 12% of the charge, with the Department of Energy initially saying back in July that the government would need about a year to fully remove the system loss charge.
This means the Marcos administration has a long way to go before its vow is fulfilled — and with power rates continuing to be sky-high in many parts of the country due to thin electricity supply, the continuing charge has only become more controversial.
So, what are these losses? In short, system loss refers to the cost of power that is wasted as it travels from generation sources to homes and buildings.
Currently, this cost is solely paid for by consumers, which means we are paying for electricity that we did not consume.
These losses can be categorized into three types. Some come from the physics of electrical transmission through metal wires, transformers, and gears that convert a small fraction of that power into heat. Others are the result of human interference or error.
So, how bad have system losses actually been? They differ depending on your distribution utility (DU). Explore this interactive map to see how high the distribution system loss has been in your area from 2021 to 2025, based on annual data the ERC required distribution utilities to submit in August 2026.
Rural DUs record highest system losses
Many of the DUs that consistently recorded the highest annual system losses are rural electric cooperatives on the outskirts of Mindanao, Mimaropa, and Bicol regions.
The Philippine Rural Electric Cooperatives Association (PHILRECA) said high system losses in these rural distribution networks can be traced back to extended feeder lines and challenging terrain that are “governed by the law of thermodynamics rather than inefficiency.”
Aging infrastructure also plays a role in these losses, with electric cooperatives long suffering from this problem. But modernizing these assets is not so simple, since PHILRECA had previously said these cooperatives suffer from delays in disbursing capital expenditures and fiscal challenges.
Feeder losses most common, but non-technical losses preventable
While feeder technical loss makes up the largest share of system losses overall, individual DUs with some of the highest losses also have a large percentage of non-technical losses.
Advocate groups such as the Institute for Climate Sustainable Cities (ICSC) have long pointed out that these non-technical losses are preventable — and even the unavoidable technical losses can still be managed.
For them, resolving the system loss issue lies in balancing two objectives. The first is to make sure the DUs can recover prudent and efficient costs necessary to provide safe, reliable, and continuous service. The second is to protect consumers from costs coming from inefficiency, inadequate controls, or preventable losses.
“Cost recovery should follow performance,” the ICSC said in a separate position paper. “Persistent underperformance, weak loss prevention efforts, or failure to address preventable losses should not automatically result in recoverable charges.” – Rappler.com
Coding for this layout was done with the assistance of AI.
