SONA 2026: Business Updates You Should Know

However, tax policy experts have warned that these proposals should be viewed only as a starting point. Chief Tax Advisor Mon Abrea emphasized that simplifying compliance and exempting MSMEs from MCIT are crucial for business operations and the creation of jobs. Moreover, tax relief should be matched by stronger revenue collection and improved enforcement against evaders, instead of just raising taxes on the part of compliant taxpayers. 

In the present, the Bureau of Internal Revenue has already shown its preparation to implement whatever Congress has passed, highlighting its modernized systems and simplified compliance tools.

The Electric Vehicle Shift: A 2040 Target 

Alongside the tax reform, a more forward-looking SONA 2026 business update was the President’s aim for electric vehicle (EV) adoption. Marcos has announced that the government will target to make electric vehicles become 50% of all vehicles that make up within the country by 2040, framing it as a movement towards a cleaner transport policy. In line with the shift, tariffs on EVs have already been suspended until 2028 to aid in bringing down prices for consumers and businesses.

Additionally, Marcos indicated that government offices and local government units have been also mandated to prioritize electric vehicles in their re-fleeting expenditure and he pointed out some real-world examples currently happening, such as the electric buses in Davao City, an electric ferry developed with the University of the Philippines and the Department of Science and Technology, and the plans for an all-electric Pasig River Ferry Service.

Consequently, the business groups have responded with cautious optimism. Some industry groups highlighted that there is a need for full implementation of the Electric Vehicle Industry Development Act (EVIDA), along with programs such as the Electric Vehicle Incentive Strategy (EVIS)—an estimated ₱60-billion incentive package aimed at growing local EVs. Also, some manufacturing groups have urged the government to extend the current tariff exemption on hybrids and battery EVs beyond 2028 to keep the transition much more affordable.

Scrapping the System Loss Charge

Indeed, the most applauded pronouncement during the SONA 2026 was the President’s call to remove the charges from electricity bills due to system loss.  To define, system loss is the difference between what the electricity distribution utility receives and what is actually billed to consumers, which is a common gap caused by both technical inefficiencies in transmission and other losses such as electricity theft and illegal connections.

Under the Republic Act No. 9136 or the Electric Power Industry Reform Act, distribution utilities are allowed to pass a portion of such loss to consumers through their monthly bills, along with VAT on top of it. 

President Marcos directly called this out during his address, emphasizing that consumers should not shoulder costs from a problem that is not their fault, and has subsequently demanded that Congress immediately amend EPIRA to prohibit the passing of system loss charges and its accompanied VAT. For context, a common system loss charge accounts for roughly 5% of a Meralco customer’s monthly bill. 

Amidst the announcement, which drew a standing ovation in the session hall, the implementation cannot be immediate. According to the Department of Energy, they cannot provide a firm timeline yet but suggest that relief could arrive within the next year. More so, consumer groups noted that EPIRA amendments have been a recurring and unfulfilled promise in previous SONAs.