MANILA, Philippines—The entry of San Miguel Corp. in Manila Electric Co. does not sit well with the Lopez family patriarch.

As far as Oscar Lopez is concerned, the 43-percent stake in Meralco controlled by San Miguel and its allies may only “create trouble” for the power distribution utility.

“The problem with San Miguel (is that) they’re all over the place. They don’t know what they want to focus their attention on, whether it’s Meralco or Petron (Corp.),” Lopez said at the sidelines of the First Gen Corp. stockholders’ meeting.

The Lopez clan’s stake in Meralco has been diluted to 13.4 percent after it agreed to sell 20 percent of its holdings in the prized utility to businessman Manuel V. Pangilinan’s group.

PLDT’s Beneficial Trust Fund has also bought another 10.2 percent of Meralco from the open market, bringing the Pangilinan camp’s interest to nearly a third of the utility.

Still, the Lopezes will retain management control of the country’s biggest power retailer following an alliance with Pangilinan—and San Miguel’s decision not to wrest control of Meralco.

San Miguel president Ramon Ang reiterated this yesterday, saying the Lopez family will retain management control of Meralco “for a long, long time.” Meralco stockholders are holding their annual meeting on May 26.

Ang said Meralco chair Manolo Lopez was a “very nice guy” and that San Miguel would vote to keep him at the helm of the utility. “He will take care of the management,” he said.

Ang added that Meralco president Jose de Jesus would also retain his current post.

Inquirer sources said Manolo was the one who invited San Miguel to invest in Meralco and that he was in good terms with Ang, as opposed to a lukewarm reception from Oscar.

But Oscar Lopez said his brother Manolo would “continue maybe for a year or two” as Meralco chair although he is expected to step down as chief executive after the elections during the company’s stockholders’ meeting.

Asked about the First Pacific group’s interest to acquire a majority stake in Meralco, Ang reiterated that San Miguel’s 27-percent stake was not for sale.

“The investment of San Miguel in Meralco is a good investment. When we bought that, there was no PBR yet,” he said.

Ang was referring to the approval by the Energy Regulatory Commission of a performance-based rate (PBR) last month that allowed Meralco to increase its distribution rate to an average P1.227 a kilowatt hour. As it is incentive-based, the PBR methodology is expected to result in better electricity rates, more efficient delivery of service to customers and optimal use of a firm’s assets.

Under the PBR scheme, Meralco was mandated to complete its proposed capital expenditure projects amounting to P28.68 billion from 2007 to 2011. This scheme would have supposedly allowed Meralco to implement new PBR-based tariffs beginning July 2007.