MANILA, Philippines -- Manila Electric Co. (Meralco) shares climbed more than 10 percent on Friday after the energy regulator allowed the country’s largest power distributor to raise its basic charges by as much as 27 percent.

Meralco was among the market's top performers, accounting for about a tenth of total turnover. Its shares rose as far as P104.00, their highest in almost seven weeks, outperforming a 1.5 percent gain in the main index.

Meralco's rate increase, the first since 2003, was initially announced in October, but the energy regulator delayed its implementation to allow for a review of the rate hike after consumer groups questioned the basis of the increase.

The energy regulator, which announced its decision on Thursday, said it had lowered Meralco's rate increase for residential consumers after considering the issues raised by consumer groups.

Under the revised decision, Meralco will be allowed to increase its basic rate to as much as P1.2227 (2.5 US cents) per kilowatt-hour, or a 27 percent increase from the average rate of 96.57 centavos in 2008.

"This is long overdue," Meralco vice president Ivanna dela Pena, told Reuters on Friday. "Definitely it will improve our returns."

"Financing will no longer be an issue for us in the future," she said, adding the company would have more leeway now in its capital expenditure commitments.

Dela Pena said the impact of the rate increase on consumers would be muted by other measures approved by the energy regulator, such as a foreign currency adjustment refund for Meralco customers related to overpayments from between June 2003 to December 2006.

($1 = P48.57)