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Manila Bulletin devider Business devider The Stock Market devider Cooler weather, higher costs slow Meralco's growth in Q1

Cooler weather, higher costs slow Meralco's growth in Q1

Published May 4, 2026 05:10 pm
Manila Electric Co. (Meralco), the country’s largest power distributor, saw its first-quarter profit growth drift lower as unseasonably cool weather and global geopolitical tensions stifled energy demand.
In a media briefing on Monday, May 4, Betty C. Siy-Yap, Meralco senior vice president and chief financial officer (CFO), said the utility’s consolidated core net income (CCNI) rose two percent to ₱11.4 billion in the three months through March.
The modest gain came despite a 1.8 percent year-on-year decline in energy sales volume, which fell to 12,273 gigawatt-hours.
Meralco attributed the sluggish volume to extended cooler temperatures early in the year and intensified conservation efforts by consumers amid volatility in the Middle East.
Peak demand for the period retreated 5.1 percent to 7.91 gigawatts. Despite the volume contraction, Meralco’s distribution business remained the primary engine of profitability, accounting for 46 percent of total core income, or approximately ₱5.3 billion.
The power generation segment followed closely with a 45 percent share at ₱5.1 billion, while retail electricity supply and non-power ventures contributed ₱978 million.
Meralco Chairman Manuel V. Pangilinan said the company navigated a complex landscape of fluctuating fuel costs and currency depreciation. “We were fortunate to have certain of our solar facilities starting to supply indigenous and clean energy in March 2026 at very reasonable prices,” Pangilinan said during a media briefing.
He added that the company’s ability to secure contractually committed coal helped mitigate spikes in domestic power prices triggered by global oil and liquefied natural gas supply chain disruptions.
At end-March, the average retail rate for consumers climbed 12 percent to ₱12.39 per kilowatt-hour, driven largely by a 10 percent jump in generation charges.
Meralco said this increase was fueled by contract price adjustments, higher fixed charges from interim power purchase agreements, and the depreciation of the local peso.
Conversely, the average distribution charge—the portion of the bill Meralco keeps—fell three percent to ₱1.36 per kilowatt-hour due to regulatory refunds: a reset fee initiated in February 2025 and a ₱20 billion settlement regarding tariff differences from previous years that began implementation in April 2025.
Capital expenditure for the quarter reached ₱19.5 billion. A significant portion of the outlay was directed toward Meralco PowerGen Corp.’s solar projects and battery energy storage systems, while the distribution unit focused on grid modernization, load growth, and pole relocations.

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