Despite a slight dip in share price last week, Meralco – the Philippines’ largest power distributor – remains a focal point for investors, consistently ranking among the most actively traded stocks. This resilience signals continued confidence in the company, even amidst broader market fluctuations.
The recent pullback, a 3.3% decrease closing at P617 per share, mirrored cautious sentiment across the industrial sector, which fell 4.8%, and the overall PSE index, down 4.4%. However, year-to-date, Meralco has still demonstrated a robust 7.5% increase, outpacing both sector and index gains.
Analysts attribute the temporary decline to a combination of profit-taking and growing anxieties surrounding the escalating Middle East crisis. This geopolitical instability casts a shadow over global fuel prices, a critical factor influencing electricity costs, even for a company that doesn’t directly source oil.
Meralco is proactively reviewing its fuel mix – currently comprised of liquefied natural gas, coal, and diesel – anticipating potential upward pressure on generation charges. Experts warn that rising global fuel costs could translate to slightly higher electricity rates for consumers in the coming months.
Adding to the complexity, Meralco awaits a crucial decision from the Energy Regulatory Commission (ERC) regarding a P7.98 billion claim for under-recoveries accumulated over nearly three years. Approval could lead to a marginal increase in rates, but is widely considered likely given the legitimacy of the expenses.
Offsetting this potential increase, Meralco also reported over-recoveries totaling P30.62 million from various subsidies and discounts, paving the way for a small refund to consumers – approximately 0.09 centavos per kilowatt-hour.
Looking ahead, Meralco is embarking on an ambitious P247.14 billion capital expenditure program, funded through a strategic blend of cash reserves, loans, and potential partnerships. This investment underscores the company’s commitment to future growth and infrastructure development.
Analysts predict a sustainable 3% growth in energy sales for the year, driven by consistent economic activity and population expansion. A projected recovery in the latter half of the year hinges on favorable weather conditions and increased electricity demand during the summer months.
Meralco’s financial performance in 2025 was strong, with net income rising 9.4% to P50.84 billion and consolidated revenues increasing 5.7% to P497.33 billion. Forecasts for 2026 anticipate continued stability, with projected earnings around P13.52 billion.
The company’s strength lies in its service area – the Philippines’ largest and most economically vibrant regions – where electricity demand remains consistently high. This positions Meralco as a reliable, defensive investment, offering stable earnings and dividends.
Technical analysts identify key support levels around P600-610 per share and resistance levels around P640-650, providing potential entry and exit points for investors. Meralco’s proactive approach to fuel mix review and its robust financial health signal a company prepared to navigate evolving market challenges.
