Manila Electric Company (Meralco) reported a 14% increase in consolidated core net income to PHP 40 billion for the first nine months of 2025, lifted by stronger contributions from its power generation business, steady distribution demand, and higher pass-through costs.

In a disclosure filed with the Philippine Stock Exchange, Meralco said consolidated reported net income rose 9% to PHP 36.8 billion, while consolidated revenues reached PHP 371.8 billion, up 5% from a year earlier. Meralco said the growth came mainly from higher generation and transmission charges, which offset the impact of lower spot market prices earlier in the year.

Distribution sales volume remained steady at 40,719 GWh, with demand from commercial accounts growing 3%, driven by the continued expansion of the retail, hotel, and services sectors. Industrial sales declined 1%, mainly due to lower demand from semiconductor and electronics customers affected by global market softness. Residential sales were largely flat. Total energy sales, including subsidiaries, stood at 50,880 GWh, up 1% year-on-year.

Meralco PowerGen Corp. (MGEN) accounted for PHP 14.7 billion or 37% of consolidated core earnings, supported by contributions from the Ilijan LNG-to-power facility, PacificLight Power in Singapore, and higher participation in the Reserve Market.

The average retail rate rose 11% to PHP 11.63 per kWh, driven by a 14% increase in generation charges and a 31% increase in transmission charges following higher ancillary service costs and adjustments in the National Grid Corporation of the Philippines’ (NGCP) allowed revenues. Purchased power costs grew 7% to PHP 281.6 billion.

As of end-September, Meralco’s customer base expanded to 7.8 million, up 3% year-on-year, with new connections mainly from the residential and commercial segments. The company also reported a 99.94% system reliability rating, maintaining service continuity metrics within regulatory standards despite severe weather events in the third quarter.

Capital expenditures totaled PHP 78.8 billion, with PHP 19.8 billion spent by the distribution utility for system upgrades, new substations, and grid hardening initiatives, and PHP 59 billion by MGEN, largely for renewable projects. 

The 3,500-MW MTerra Solar project was 65% complete as of October 15, 2025, while a 49-MW battery energy storage system (BESS) in Toledo, Cebu, is under construction, with the first 25 MW set for commissioning in the second quarter of 2026.

MGEN also signed a memorandum of understanding with ACWA Power to explore up to 1,700 MW of renewables nationwide.

Consolidated interest-bearing debt rose to PHP 213.4 billion, with net debt at PHP 123.7 billion and a net debt-to-EBITDA ratio of 1.5x, which the company described as “manageable.”

The company noted the Energy Regulatory Commission’s (ERC) issuance of the Rationalized Rules for Setting Distribution Wheeling Rates (RRDWR), which will allow Meralco to undergo its first rate reset in a decade. The filing deadline for Group A utilities is January 19, 2026, with the ERC expected to issue a decision by June 25, 2026.

Meralco Chairman Manuel V. Pangilinan said the company remains confident it will meet its PHP 50-billion core profit guidance for 2025, supported by growth in both its distribution and generation segments.

“Based on the growth of our power generation business and the steady performance of our core distribution business in the past nine months, we stay positive that we will achieve our full-year core profit guidance of Pesos 50 billion,” he said.

Pangilinan also welcomed the ERC’s rate-setting reforms, noting these will “enable distribution utilities like Meralco to undergo a rate reset, which we have not obtained in the past 10 years.” 

“The timely implementation of the 1RP is essential for us to move forward with major investments on smart grid, network resiliency and system improvement, and cybersecurity, among others – which will update and future-proof our operations,” Pangilinan said.

The chairman also cited the passage of the Philippine National Nuclear Energy Safety Act, saying it “reflects the country’s strong commitment to advance nuclear energy development for long-term energy security and sustainability.”

How will Meralco’s stronger generation earnings, new renewable projects, and the upcoming rate reset shape the country’s power landscape? Share your insights on what this means for power prices, competition, and future grid investment.

Follow Power Philippines on Facebook and LinkedIn or join our Viber community for more updates.