How to Calculate Your Electricity Bill in the Philippines

To estimate a Philippine electricity bill, multiply the kilowatt-hours (kWh) you used by your utility’s overall rate per kWh. For example, at Meralco’s October 2026 overall rate of about ₱15.06 per kWh for a typical household, 200 kWh comes to roughly ₱3,012. The kWh figure comes from your meter or from an appliance list, and the rate comes from your bill or your utility’s monthly rate announcement.

That gets you close, but rarely to the centavo, because the bill is made up of separate charges and some of them depend on how much you use, whether you get a subsidy, and the month. Below are the formula, a line-by-line look at a Meralco bill, and the reasons estimates miss.

If you’d rather skip the arithmetic, use the electricity cost calculator for a monthly total or the appliance consumption calculator for one appliance at a time.

kWh basics: what you are actually paying for

Your bill doesn’t charge you for watts. It charges you for energy, measured in kilowatt-hours (kWh).

• A watt (W) measures how fast a device uses power. You’ll find it on the nameplate sticker or in the manual.
• A kilowatt (kW) is 1,000 watts.
• A kilowatt-hour (kWh) is the energy used when 1 kW runs for one hour. Your meter counts kWh.

So a 1,000 W flat iron that runs for one hour uses 1 kWh, and so does a 100 W device left on for ten hours.

The appliance formula

kWh per day   = watts ÷ 1,000 × hours used per day
kWh per month = kWh per day × days used per month
Cost per month = kWh per month × rate per kWh (₱)

Two cautions apply. First, the nameplate wattage is a rating, and real power draw depends on the setting you use. A fan on low uses less than a fan on high. Second, appliances with a compressor or thermostat, like refrigerators and inverter aircons, cycle on and off or speed up and slow down. Multiplying the nameplate wattage by 24 hours overstates what a refrigerator uses. For these, use the estimated monthly kWh on the DOE energy label if there is one, or measure the appliance with a plug-in energy meter.

Step 1: Find your kWh from the meter or the bill

On a Meralco bill, the meter details are in the upper-left area under “Your Electric Bill”. That section shows your meter number, the meter reading schedule, the current and previous readings, and your actual consumption in kWh.

kWh used this period = current reading − previous reading

Meralco’s own example for an electronic meter is 3,456 − 3,144 = 312 kWh. On an electronic (digital) meter you just read the number on the display. On an older electromechanical meter with dials, write down the smaller number that each pointer has just passed. Before you start, check that the meter number on the meter matches the one on your bill.

Step 2: Multiply by the overall rate

Step 3: Understand the charges on a Meralco bill

The Electric Power Industry Reform Act of 2001 (EPIRA, Republic Act 9136) requires every distribution utility to “identify and segregate” the parts of its retail rate on customer bills. That’s why the bill lists many separate charges and not one price. Meralco’s Breakdown of Charges page groups them like this:

These shares are approximate. They change from month to month, mostly with the generation charge, and other reports have given different splits, so take them as a rough guide.

Generation and transmission charges

Generation is the cost of the electricity itself, and it is usually the largest part of the bill. Meralco says it passes this cost through without a markup. It changes every month with fuel prices, supply and demand, plant availability and the exchange rate, so it drives most of the swings in your rate. Transmission pays NGCP for carrying power over the grid, at rates approved by the ERC. It can also go up or down. In October 2026, for example, it fell because ancillary service costs were lower.

System loss charge

Some electricity is lost as heat in wires and transformers, and some is stolen. The system loss charge recovers that cost. The Energy Regulatory Commission (ERC) caps how much can be passed on to customers, and Meralco absorbs any losses above the cap.

Since September 2026 the allowable system loss charge is no longer subject to VAT. ERC Resolution No. 26, Series of 2026, classified it as a government-mandated pass-through cost, and the Bureau of Internal Revenue followed with Revenue Memorandum Circular No. 97-2026. The BIR circular covers distribution utilities and electric cooperatives as well as Meralco, on condition that the charge is shown as a separate item on the bill.

Distribution, supply and metering charges

This is the part Meralco keeps: running the wires, poles and transformers, reading meters, billing, and customer service. ERC regulates it, and Meralco says it can’t raise it on its own. Look on your bill to see whether each of these lines is charged per kWh or as a fixed amount per month. A fixed amount doesn’t change with your usage.

Subsidies

• Lifeline subsidy. This is a discount for qualified low-income households (see the lifeline section below). Customers who don’t receive the discount pay a small per-kWh lifeline subsidy charge to fund it.
• Senior citizen subsidy. This is a 5% discount for senior citizens whose account is in their own name and who use 100 kWh or less in the month, and a 50% discount for DSWD-accredited senior citizen centres. Other customers pay a very small per-kWh charge to fund it.

Universal charges

EPIRA Section 34 created a universal charge that all end-users pay. On a Meralco bill it is remitted to PSALM (Power Sector Assets and Liabilities Management Corporation) and includes:

• Missionary electrification, which helps pay for power in remote and off-grid areas that are costly to connect.
• Environmental charge, fixed by law at ₱0.0025/kWh (a quarter of a centavo) for watershed rehabilitation.
• NPC stranded debts, which cover unpaid obligations of the National Power Corporation.

FIT-All and GEA-All

• FIT-All (Feed-in Tariff Allowance) helps pay for renewable energy projects under the feed-in tariff programme. ERC sets the rate every year, and it is remitted to TransCo.
• GEA-All (Green Energy Auction Allowance) funds solar, wind, hydro and other renewable projects chosen through the DOE’s Green Energy Auction. Meralco started collecting it in January 2026 and lists it at ₱0.0371/kWh.

Taxes

• Value-added tax (VAT). VAT applies to most, but not all, of the charges. Some generation is VAT-exempt, such as power from indigenous natural gas, and the allowable system loss charge is now excluded too. So you can’t estimate VAT as a flat 12% of the whole bill. In October 2026, the tax part of Meralco’s rate went down partly because more of its power came from VAT-exempt indigenous gas and because VAT on system loss had been removed.
• Local franchise tax and real property tax go to local government units.
• Energy tax applies only to residential customers who use more than 650 kWh in a month, and it goes to the national government.

Why the “overall rate per kWh” is only an average

Each month Meralco announces an overall rate quoted for a typical household using 200 kWh. Your own rate per kWh (current charges ÷ kWh) can come out different:

• Any fixed monthly amounts on your bill weigh more per kWh when you use very little.
• If you use more than 650 kWh, the energy tax applies.
• If you’re a registered lifeline or senior citizen beneficiary and stay within the limit, your discount lowers your rate. Everyone else pays the small charges that fund these discounts.
• Refunds and adjustments may appear on a particular bill. For example, Meralco is returning ₱0.1733/kWh to residential customers over six months starting November 2026, under a refund the ERC approved.
• Rate changes take effect monthly, so the rate on your bill may not match the rate you used for last month’s estimate.

For budgeting, the overall rate is fine. To check one specific bill, divide the total current charges by the kWh shown on that bill. That gives your actual average rate for the month.

Lifeline discounts and other consumption thresholds

The lifeline rate is a discount for poor households, required by EPIRA and extended for 50 years by Republic Act 11552 (2021). Under that law the discount goes to:

• households in the Pantawid Pamilyang Pilipino Program (4Ps), based on the DSWD’s list, and
• other marginalised households that the distribution utility certifies under ERC criteria, which take the PSA poverty threshold into account.

Meralco says registered lifeline customers who use 100 kWh or less get a discount based on how much they use:

How electric cooperatives and other utilities differ

Many Philippine households aren’t Meralco customers. They are served by an electric cooperative or by another private utility such as VECO or Davao Light. EPIRA defines all of these as distribution utilities. ERC regulates their retail rates, and every one of them must show the components of its rate separately on the bill.

So the method is the same everywhere: kWh × rate. What changes:

• The rate. Utilities buy power from different suppliers and have different network costs, so overall rates differ from one area to another. Use the rate on your own bill.
• The line items. Expect the same main groups, but names, layout and any fixed charges vary.
• Lifeline thresholds may not match Meralco’s.
• Announcements. National news mostly covers Meralco’s monthly rate. For any other utility, check that utility’s own rate advisories.

How to estimate your bill from an appliance list

If you don’t have a bill yet (you’ve just moved, for example) or want to see which appliances cost the most, add up your appliances one by one. The appliance consumption calculator does this for you. By hand it looks like this:

In this example the aircon makes up more than half the total. In homes with aircon it is often the biggest single item, so check it first with the aircon electricity cost calculator. Our guides on aircon electricity consumption and refrigerator electricity consumption go into more detail.

Why your estimate won’t match the bill exactly

Even a careful estimate usually comes out a bit off. These are the usual reasons:

1. The billing period length. Your bill covers the days between two meter readings. Look at the reading dates. A longer period means more kWh even if your habits didn’t change.
2. Real hours of use. If your hours are guesses, so is your estimate. A week of notes or a plug-in energy meter gives better numbers.
3. Heat and compressor load. Aircons and refrigerators work harder in hot weather. Meralco warns that its own appliance calculator may underestimate cooling appliances from March to June.
4. The rate changed. Each month’s bill uses that month’s rates, and the generation charge alone can move your rate by tens of centavos per kWh from one month to the next.
5. Consumption-based items. Lifeline and senior citizen discounts stop above 100 kWh, and the energy tax starts above 650 kWh.
6. Adjustments, refunds and earlier balances. The total amount due can include refunds, adjustments or an unpaid balance from a previous bill, as well as this month’s charges. To compare with your estimate, use the current charges only.
7. Standby and forgotten loads. Chargers, set-top boxes, a second refrigerator or a water pump all add kWh that an appliance list can easily miss.

The bottom line

Your electricity bill is kWh × rate, and every part of that is something you can check. Your meter or bill gives the kWh. Your utility’s monthly announcement gives the rate. Appliance wattage and hours of use show where the kWh come from. The overall rate Meralco announces is an average for a 200 kWh household, so use it for estimates and use your own bill to check what you actually paid. For a quick figure, try the electricity cost calculator. To find the appliances that cost you the most, list them in the appliance consumption calculator, then read our guide to reducing household electricity consumption.