Meralco under the microscope for market clout

Raphael Lotilla—JORDEENE B. LAGARE

MANILA, Philippines — Power giant Manila Electric Co. (Meralco) is facing scrutiny after Energy Secretary Raphael Lotilla said the business empire posed “certain risks” to market competition given its wide-ranging influence in the sector.

“We and the [Department of Energy] are prepared to work with the ERC (Energy Regulatory Commission) and the PCC (Philippine Competition Commission) to examine these issues closely, not with suspicion, but with the diligence that our public deserves,” Lotilla said on Thursday.

In a speech at the Giga Summit 2025: The Fusion of Power and Intelligence in Makati City, the energy chief highlighted Meralco’s impact as its operations go beyond distribution, stretching to power generation and electrical contractor services.

“This complex organization, therefore, carries certain risks insofar as competition is concerned,” Lotilla said.

Not the cheapest rates

Tagged as the biggest power distributor in the Philippines, tycoon Manuel V. Pangilinan-led Meralco —which just received a fresh franchise extension until 2053—serves more than 8 million customers in 39 cities and 72 municipalities. Its energy demand, Lotilla noted, accounted for half of the country’s power demand.

However, the government executive said Meralco “does not have the cheapest power rates” when compared to other distribution utilities and electric cooperatives.

This, despite the company sourcing “nearly half of its power … from its affiliates,” Lotilla said.

Meralco, which used to focus on distribution, owns one of the key players in power generation: Meralco PowerGen Corp. (MGen). The latter has a diverse mix of traditional and renewable energy assets with a net sellable capacity of 4,953 megawatts.

In terms of distribution, Meralco sources power from MGen affiliates San Buenaventura Power Ltd. Co. and PowerSource First Bulacan Solar Inc., among others.

Lotilla said they were hopeful that, since Meralco gets almost half of its power needs from affiliated firms, “economies of scale” would be realized, potentially leading to a reduction in rates for consumers.

He likewise pointed out that a delay in the implementation of Meralco’s power supply agreement (PSA) could affect not just its franchise area, but also the rest of Luzon.

Clash

Meralco and DOE Assistant Secretary Mario Marasigan clashed earlier this month after the latter alleged that the delayed PSA of Meralco with Excellent Energy Resources Inc. had led to higher rates at the spot market.

Asked for his reaction, Pangilinan told reporters that Meralco already gave its “best statement,” where the group dismissed Marasigan’s claim as “false and misleading.”

In a lengthy response to Marasigan, Meralco said that instead of pinning the blame on the firm, the government should focus on enticing more investments in new power plants.

Delays in regulatory approvals of needed power deals also “significantly contribute to supply deficiency and an increase in generation cost,” it added.

The billionaire said Meralco was committed to exploring ways to cut down electricity rates.

“I hope we are able to bring down power prices at least on the distribution side, we don’t make money on the generation side, but we get the brunt of the criticisms,” he said in a speech at the same forum.