Meralco reported a modest increase in first-quarter earnings for 2026 as gains from its generation business, particularly LNG and early solar output, helped offset softer distribution volumes and volatility in global fuel markets following geopolitical tensions.

The company disclosed that consolidated core net income rose 2% to PHP 11.4 billion from PHP 11.2 billion a year earlier, while consolidated reported net income increased 4% to PHP 10.8 billion. Core earnings per share stood at PHP 10.137, up 2% year-on-year.

“The 2% growth in our CCNI was backed by our strategic initiatives and responsible financial management. But what occupied Meralco the most was the Iran war which broke on February 28, with the serious consequences on our fuel supply chain and on power prices,” Chairman Manuel V. Pangilinan said.l.

“We were fortunate to have certain of our solar facilities starting to supply indigenous and clean energy, in March 2026, at very reasonable prices, and our ability to source contractually committed and reasonably priced coal helped dampen the spike in power prices,” he added.

Revenues rose 5% to PHP 120.8 billion, driven by higher generation revenues and increased pass-through charges in the distribution utility segment. Core EBITDA grew 2% to PHP 19.6 billion.

However, distribution energy sales declined 2% to 12,273 GWh, reflecting cooler temperatures versus last year, increasing rooftop solar adoption, and softer demand in commercial and residential segments. Industrial demand also eased slightly, though semiconductor and cement remained resilient.

Average retail electricity rates climbed 12% to PHP12.39 per kWh, driven largely by higher generation and transmission charges, including fuel cost adjustments and peso depreciation.

Purchased power costs rose 7% to PHP92.7 billion, reflecting higher generation and grid-related charges, while capital expenditures reached PHP19.5 billion for the quarter.

On the supply side, Meralco PowerGen Corporation (MGEN), was a key growth driver, with its core net income contribution up 51%, supported by full-quarter operations of its domestic LNG investments.

“The first quarter of 2026 marks MGEN’s shift from building capacity to delivering tangible impact to the grid,” MGEN President and CEO Emmanuel V. Rubio said. “With MTerra Solar now energized, we are not only strengthening today’s energy supply but also demonstrating the Filipino’s ability not only to build big, but also to build fast.”

MGEN’s renewable push gained traction as MTerra Solar began delivering an initial 250 MW of clean power to the Luzon grid, alongside 450 MWh of battery energy storage output during nighttime operations. The project’s first phase is now 83% complete.

The company also secured a USD 2.8 million grant from the U.S. Trade and Development Agency to support Meralco’s Nuclear Energy Strategic Transition (NEST) program, including a study on small modular reactor deployment.

Despite softer distribution volumes, Meralco highlighted continued investments in grid reliability, customer expansion, and energy efficiency programs, with net customer count reaching 8.3 million and net metering users growing 36% year-on-year.

“We will continue to take proactive steps to mitigate emerging pressures on both rates and operations, while ensuring supply adequacy especially as we go through the seasonally critical dry months and face the heightened likelihood of El Niño conditions developing in the coming months,” Executive Vice President and COO Ronnie L. Aperocho said.

Pangilinan said the group is positioning for deeper diversification into renewables, nuclear, and distributed energy resources, alongside continued grid modernization and fuel risk management.

With power prices, fuel security, and the accelerating shift to LNG, solar, and battery storage all converging in the Philippines’ energy landscape, how should utilities balance affordability, reliability, and the energy transition under sustained geopolitical volatility?

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