Price Increase on Digital Subscription Services Affect Filipino Consumers

Additional taxes on digital services, such as Steam and Netflix, are beginning to take their toll on Filipino consumers.

President Ferdinand R. Marcos Jr. signed the Republic Act (RA) No. 12023, also known as the Value-Added Tax (VAT) on Digital Services Law, on October 2, 2024.

The legislation extends taxation to digital service providers (DSPs), covering those operating in the country even without a physical location. This includes digital subscription services such as Spotify and Netflix, digital stores such as Steam, and online shopping marketplaces such as Lazada, Shopee, and Temu.

This law was pushed by the Marcos administration to allow the government to collect taxes from companies who profit from Filipino consumers.

Prices of Digital Subscriptions Increase to Include the New VAT

In response to this, DSPs are starting to raise their prices to include the 12% VAT on digital services. The situation caused significant anxiety among consumers, especially those already burdened by subscription expenses.

Spotify has not yet implemented a price adjustment across all of its subscription plans so far. Meanwhile, Netflix has implemented a price increase on their subscription services last June 1, 2025. The price of the cheapest plan, the mobile-only option, is going up from P149 to P169 monthly. Additionally, the cost of the premium plan increased from P549 to P619 per month.

Unlike Netflix, some companies chose to absorb the VAT rather than charging their customers. For instance, Steam has begun charging the 12% VAT on games and other digital products in the Philippines this month. While Steam shows VAT-inclusive pricing, games published on the site have minimal price increases. Reddit user SeptoneSirius pointed out that “Stellar Blade” maintained its pre-order price even though its release coincided with the start of the VAT. In contrast, the price of Clair Obscur: Expedition 33 (released April 23) rose from ₱1,620 to ₱1,800 in May—a 10% increase—and has not changed since.

Effects of Price Adjustments to Consumers

These price changes have affected consumers, especially those who use subscription services. Jaana, a student and content creator, has ongoing subscriptions for Spotify and Netflix. Although the Netflix price hike was minimal, it still impacted her personal budget. In response, Jaana tracks her finances to pay for her subscriptions. On the other hand, Elle, an accountant, opted to unsubscribe from Netflix and Spotify as she can’t afford to pay for her monthly subscriptions.

While most of these subscriptions haven’t changed yet, further price adjustments might be expected in the following months to compensate for the VAT costs.