By Ashley Erika O. Jose, Reporter
MANILA ELECTRIC Co. (Meralco) expects the weakening peso to push electricity rates higher as foreign exchange movements affect the cost of power purchased from generation companies.
“Definitely, it will have an impact especially on the pass-through generation costs. More than 50% of our power sources are dependent on forex (foreign exchange) and that will probably increase the generation rates,” Meralco Senior Vice-President and Head of Regulatory Management Jose Ronald V. Valles said during the company’s financial briefing on Wednesday.
The peso breached the P64-per-dollar level for the first time on Tuesday, closing at a record low of P64.17 against the US dollar.
The local currency recovered by 14.5 centavos on Wednesday, closing at P64.025 against the dollar.
“We are finding ways to manage and offset the increases brought about by the forex depreciation,” Mr. Valles said.
Meralco’s warning comes after the company raised its residential electricity rate in October due to higher generation charges.
The overall rate increased by P0.3191 per kilowatt-hour (kWh) to P15.0615 from P14.7424 per kWh in September.
The generation charge, which accounts for the largest portion of a typical customer’s electricity bill, rose by approximately 50 centavos per kWh.
In its nine-month financial report, Meralco said the average retail electricity rate increased by 15% to P13.43 per kWh from P11.63 per kWh a year earlier, largely due to higher pass-through charges.
Generation charges accounted for 65% of the average retail rate, with increases attributed to higher fuel prices, power supply costs, wholesale electricity market charges, and peso depreciation.
Meralco’s purchased power costs rose by 20% to P338.7 billion from P281.6 billion in the same period last year.
Meanwhile, Meralco PowerGen Corp. (MGEN), the company’s power generation arm, said further peso depreciation could affect its pipeline projects.
“[For] projects that have broken ground, it will have no impact but for projects that have yet to start, [we] need to look out for,” MGEN President and Chief Executive Officer Emmanuel V. Rubio said during the briefing.
Despite uncertainties involving foreign exchange rates and fuel costs, Meralco maintained its consolidated core net income guidance of P56.6 billion for 2026.
“While global uncertainties continue to put pressure on fuel supply and prices, Meralco’s diversified portfolio continues to give us greater strength and flexibility to navigate the challenges,” Meralco Chairman and Chief Executive Officer Manuel V. Pangilinan said.
For the third quarter, Meralco’s consolidated core net income rose by 26% to P18.32 billion from P14.49 billion in the same period last year, driven by growth across its business segments.
For the nine months ended September, consolidated core net income increased by 12% to P44.83 billion from P40.02 billion a year earlier.
Consolidated reported net income rose by 21% to P44.68 billion from P36.88 billion, while consolidated net income increased by 24% to P47.20 billion from P38.09 billion.
Revenue grew by 19% to P443.04 billion from P371.77 billion in the comparable period in 2025.
Electricity sales accounted for P434.97 billion of total revenue, while non-electricity businesses contributed P8.07 billion.
Total costs and expenses increased by 20% to P397.70 billion from P332.26 billion a year earlier.
Meralco attributed its core earnings growth to its distribution utility (DU), power generation, and retail electricity supply (RES) businesses.
The distribution utility business contributed 45%, or P20.1 billion, to consolidated core net income, while power generation accounted for 41%, or P18.2 billion.
Retail electricity supply and non-electricity businesses contributed the remaining 14%, or P6.5 billion.
Systemwide electricity sales volume across the distribution utility, power generation, and retail electricity supply businesses reached 52,017 gigawatt-hours (GWh) during the nine-month period.
“We are realizing gains from investments made in previous years, particularly through MGEN that has been steadily increasing its earnings contribution, and the strategic integration and continued expansion of the RES business. Together, these build on the solid foundation of our core DU business, enabling us to sustain growth through the nine-month period, while weathering market volatilities,” Mr. Pangilinan said.
Meralco served 8.4 million customers as of the end of September, up 2% from 8.2 million a year earlier.
At the local bourse, Meralco shares fell P11.80, or 2.67%, to close at P429.80 apiece on Wednesday.
Meralco’s controlling shareholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.