Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
House Bill No. __________ 
Introduced by 
PHILRECA Party-List Representative Presley C. De Jesus, 
APEC Party-List Representative Sergio C. Dagooc 
EXPLANATORY NOTE 
In the case of Philippine Rural Electric Cooperatives Association, Inc. 
(PHILRECA) v. Secretary of the Department of Interior and Local Government 
(DILG), the Supreme Court ruled against the petitioner’s tax exemption claim 
pursuant to Presidential Decree No. 269. In its decision, the Court focused on 
the distinctions between electric cooperatives and cooperatives which fall 
under R.A. 6938. The main points made by the Court are:  
1. The amount of contribution made per capital required;
2. Government supervision over electric cooperatives; and
3. Withdrawal of tax exemption for cooperatives not registered under R.A.
6938.
However, electric cooperatives registered under R.A. 6938 are still afforded 
tax exemption despite the divergence in the above-mentioned factors. There 
is undoubtedly minimal to no actual variance between the two cooperatives, 
aside from the fact of its registration under R.A. 6938. It is noteworthy to 
mention that electric cooperatives are naturally and inherently non-stock, 
non-profit entities, whose main purpose is to provide electricity to its 
members. There is clearly no reasonable distinction between cooperatives 
registered under the R.A. 6938 and electric cooperatives, hence violative of 
Sec. 1, Article III of the 1987 Constitution1.  
Sec. 13 of R.A. 10531 recognizes the right of electric cooperatives to 
preferential rights granted under R.A. 7160, otherwise known as the Local 
Government Code (LGC). This specifically pertains to Sec. 193, the provision 
that provides for the withdrawal of tax exemption on all entities except 
1 Sec. 1, Art.III, 1987 Constitution. No person shall be deprived of life, liberty, or property without due process of 
law, nor shall any person be denied the equal protection of the laws. 
July 19, 2022
4:00 pm
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cooperatives registered under the Cooperative Development Authority. R.A. 
10531 was enacted in 2012, whereas the R.A. 7160 was enacted in 1991. The 
provision has clearly repealed the withdrawal of tax exemption under the LGC 
and is reinforced by Section 18 of R.A. 10531, which states, to wit:  
 
 SEC. 18. Repealing Clause. – Article 132(3) of Republic Act No. 9520 
and Section 30 of Republic Act No. 9136 (EPIRA) on NEA’s authorized 
capital stock are hereby repealed. Any other provision of law, 
presidential decree, executive order, or rules and regulations 
inconsistent with the provisions of this Act or with the rules and 
regulations issued pursuant thereto are hereby repealed or 
modified accordingly. 
 
Real Property Tax (“RPT”) imposes a financial burden to electric consumer as 
part of the electric bill’s passed on charges. The business of an electric 
cooperative is imbued with public interest which gives life to national 
economic 
activity 
and 
promotes 
modernization 
and 
technological 
advancement in rural areas. Hence, if the assets used by the electric 
cooperatives are burdened with these RPTs, the end result would be an 
increase in electricity bills paid by the electric end-users.  
 
This House Bill aims to protect the interests of member consumer owners 
(MCOs) and all electric consumers. This bill will also clarify the issue on tax 
exemption granted to the electric cooperatives under prevailing laws. With the 
current COVID-19 pandemic, there has been an increase in unemployment 
and cessation of business operations throughout the country. This fact has 
proven to be a burden to pay for utility costs and basic sustenance. The least 
we could do is to relieve our kababayans from further financial distress. The 
Filipino people deserve better; they deserve affordable electricity. 
 
In view of the foregoing, the approval of this bill is earnestly sought. 
 
 
 
 
PRESLEY C. DE JESUS 
PHILRECA Party-List Representative 
 
 
 
 
 
SERGIO C. DAGOOC 
 
 
 
 
 
APEC Party-List Representative 
 
 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
House Bill No. __________ 
Introduced by 
PHILRECA Party-List Representative Presley C. De Jesus, 
APEC Party-List Representative Sergio C. Dagooc 
AN ACT  
PROVIDING FOR THE GRANT OF TAX EXEMPTION ON REAL 
PROPERTY TAXES IMPOSED ON LAND OWNED AND USED BY 
ELECTRIC COOPERATIVES 
Be it enacted by the Senate and the House of Representatives on the Philippines 
in Congress assembled: 
SECTION 1. Short Title. – This Act shall be known as the “Electric 
1 
Cooperative Real Property Tax Exemption Act” or “EC-RPT Exemption Act”. 
2 
SECTION 2. Declaration of Policy. – It is hereby declared the policy of 
3 
the State to: 
4 
(a) ensure the quality, reliability, security and affordability of the supply of
5 
electric power to achieve the lowest cost for end users of electricity;
6 
(b) to provide the general public reasonable prices for use of electricity;
7 
(c) to ensure the continuity of rural electrification and
8 
(d) to promote the total electrification of the country.
9 
SECTION 3. Scope. – This Act shall apply to all non-stock and non-profit 
10 
electric cooperatives organized and registered under Presidential Decree No. 
11 
269, as amended.  
12 
SECTION 4. Tax exemption from Real Property Tax. – All properties 
13 
owned and controlled by electric cooperatives which are used for the 
14 
distribution of electricity and its operations shall be exempt from real property 
15 
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tax; Provided that, such properties are not encumbered by any lien or 
1 
mortgage agreement; Provided further, that the electric cooperative shall be 
2 
organized and registered under the National Electrification Administration 
3 
(NEA).  
4 
SECTION 5. Role of the National Electrification Administration. – The 
5 
NEA shall require all duly registered non-stock and non-profit electric 
6 
cooperatives to submit proof of ownership or control over the properties 
7 
referred to in the preceding provision. After the compliance of the electric 
8 
cooperative, the NEA shall communicate with the corresponding local 
9 
government unit the eligibility of the electric cooperative for the tax 
10 
exemption.  
11 
SECTION 6. Repealing Clause. - All laws, decrees, orders, rules and 
12 
regulations, or parts thereof, inconsistent with the provisions of this Act are 
13 
hereby amended or repealed accordingly.  
14 
SECTION 7. Separability Clause. - The provisions of this Act are hereby 
15 
declared separable. In the event that any provision hereof is rendered 
16 
unconstitutional, those that are not affected shall remain valid and effective.  
17 
SECTION 8. Effectivity. - This Act shall take effect fifteen (15) days 
18 
following its publication in the Official Gazette or a newspaper of general 
19 
circulation 
20 
Approved, 
21