MANILA, PHILIPPINES — Philippine power giant Manila Electric Company (Meralco) is heading toward what could become another record-breaking year as its expanding electricity generation operations help lift profits despite rising fuel costs, a weakening peso and mounting pressure on household electricity bills.
Meralco chairman and chief executive officer Manuel V. Pangilinan said on October 28 that the company expects to achieve approximately ₱56.6 billion in consolidated core net income for 2026, provided no major unforeseen developments disrupt operations.
The projection would represent nearly 12% growth over the company’s previous record of approximately ₱50.6 billion in 2025.
The company has already reported ₱44.8 billion in consolidated core net income for January through September, also up 12% year over year.
Power generation is becoming an increasingly important source of earnings.
Meralco’s generation businesses contributed approximately ₱18.2 billion during the first nine months, a 24% increase, accounting for 41% of consolidated core earnings.
The traditional electricity distribution business remained the largest contributor, generating ₱20.1 billion, or 45%.
Meanwhile, Meralco is investing billions into renewable energy, battery storage and network modernization, including the massive MTerra Solar development in Central Luzon.
But as the company approaches another record profit year, a more pressing question is emerging among electricity consumers.
Will Meralco’s growing earnings and major clean-energy investments eventually translate into more reliable and affordable electricity—or will rising generation costs continue putting pressure on household budgets?
MERALCO SEES A NEW PROFIT RECORD IN 2026
Meralco’s latest earnings guidance indicates that management expects consolidated core net income to reach approximately ₱56.6 billion for the full year.
The projection follows nine months of higher earnings from power generation and other electricity-related businesses.
The company has already earned approximately ₱44.8 billion in consolidated core net income through September.
To meet its full-year target, it would need around ₱11.8 billion in additional core earnings during the fourth quarter.
The target remains conditional.
Changes in fuel costs, electricity prices, operating expenses and other developments could influence the final result.
It would therefore be inaccurate to report that Meralco has already earned ₱56.6 billion in 2026.
NINE-MONTH CORE EARNINGS INCREASE 12%
Meralco reported approximately ₱44.8 billion in consolidated core net income from January through September 2026.
That compares with roughly ₱40.02 billion during the same period in 2025.
Core net income is a performance measure that excludes specified non-recurring items.
It should be distinguished from consolidated reported net income.
For the first nine months of 2026, reported net income reached approximately ₱44.7 billion, up 21% from around ₱36.8 billion a year earlier.
Both measures indicate improved performance, but they have different definitions and growth rates.
The company’s full-year ₱56.6-billion guidance refers specifically to consolidated core net income.
POWER GENERATION EMERGES AS A MAJOR EARNINGS DRIVER
Meralco’s power generation operations recorded approximately ₱18.2 billion in core earnings contributions.
The amount increased 24% from the previous year.
Power generation accounted for 41% of group core earnings during the nine-month period.
The growth reflects a significant shift in the company’s business mix.
Meralco has historically been closely associated with distributing electricity to households and businesses.
Its generation business now provides an increasingly substantial portion of consolidated profits.
This diversification could strengthen the company’s long-term earnings potential.
However, electricity generation also introduces exposure to fuel prices, construction costs and power market conditions.
MERALCO POWERGEN DRIVES THE EXPANSION
Meralco PowerGen Corporation, also known as MGEN, is central to the group’s strategy.
The company has investments in conventional and renewable power generation.
Its portfolio includes natural gas, thermal power and large-scale renewable energy projects.
MGEN’s expanding operations helped improve the group’s financial performance during the first nine months.
Pangilinan credited investments made in earlier years for the increasing contribution from power generation.
The results illustrate how infrastructure spending may take time to translate into earnings.
But generation projects still face operational and financial risks.
Their performance depends on plant availability, fuel supply, electricity demand and commercial agreements.
ELECTRICITY DISTRIBUTION REMAINS THE BIGGEST CONTRIBUTOR
Despite the rapid rise in generation profits, Meralco’s regulated electricity distribution business remains its largest single earnings contributor.
The segment provided approximately ₱20.1 billion in core income during the first nine months.
That represented 45% of consolidated core earnings.
Meralco’s distribution business serves millions of customers through its electricity network.
It remains essential to the group’s cash generation and operating stability.
However, distribution revenue is subject to a regulatory framework.
The business cannot simply impose any distribution charge it wishes.
Its rates are governed by applicable Energy Regulatory Commission decisions.
RETAIL ELECTRICITY SUPPLY ADDS ₱6.5 BILLION
The company’s retail electricity supply and non-electricity operations contributed approximately ₱6.5 billion in combined core earnings.
These businesses accounted for the remaining 14% of the group’s consolidated core income.
Retail electricity supply involves providing electricity to qualified contestable customers under the applicable competitive retail electricity market arrangements.
The expansion of this segment offers an additional channel for growth.
It also reflects Meralco’s effort to strengthen operations beyond traditional distribution.
However, the ₱6.5-billion figure combines retail electricity supply with other businesses.
It should not be described as earnings from retail electricity supply alone.
MTERRA SOLAR BEGINS COMMERCIAL OPERATIONS
One of the most important developments is MTerra Solar, a large-scale integrated solar power and battery storage project spanning Nueva Ecija and Bulacan.
The project’s first commercial supply under its power supply agreement with Meralco began on August 26, 2026.
The initial contracted supply totals 600 megawatts of alternating-current capacity.
MGEN publicly confirmed the start of commercial operations on September 3.
The milestone followed grid-connection approval from the National Grid Corporation of the Philippines.
It demonstrates that part of the project has progressed beyond construction into actual electricity delivery.
However, the first 600-megawatt commercial supply should not be confused with the full planned project capacity.
MTERRA TARGETS 3,500 MWp SOLAR AND 4,500 MWh BATTERY STORAGE
Upon full completion, MTerra Solar is designed to have approximately 3,500 megawatts-peak of solar generation capacity and 4,500 megawatt-hours of battery storage.
These are different measurements.
Megawatts describe power capacity.
Megawatt-hours describe the amount of energy a battery can store or deliver over time.
The overall project is planned in stages.
The first phase has achieved important commissioning and commercial-operation milestones, but the full planned development has not yet been completed.
Any headline claiming all 3,500 MWp of solar capacity is already operating commercially would be misleading.
ANOTHER 250 MW OF CONTRACTED SUPPLY IS EXPECTED IN 2027
MGEN expects MTerra Solar to provide an additional 250 megawatts of contracted electricity supply in 2027.
This would increase the project’s commercial contribution under the relevant power supply arrangements.
However, the projected additional supply remains a future milestone.
It depends on further development, commissioning and operational requirements.
The company has not established that the extra 250 MW was already being delivered as of October 29, 2026.
For investors and consumers, the distinction between capacity under construction, installed equipment and actual commercially contracted output is essential.
MGEN RENEWABLES TARGETS ITS FIRST FULL-YEAR PROFIT
MGEN Renewables Inc., formerly SP New Energy Corporation, is targeting its first full-year profit of more than ₱700 million in 2026.
The expected turnaround follows years of investment in renewable energy infrastructure.
The subsidiary’s net saleable solar capacity reportedly increased from 132.2 MW in 2025 to 1,082.2 MW as of September 2026.
The increase demonstrates the scale of its renewable energy expansion.
However, the projected ₱700-million profit is not yet a completed full-year financial result.
The company’s final performance will depend on actual operations, project costs and the recognition of earnings through December.
MERALCO’S CUSTOMER BASE REACHES 8.4 MILLION
Meralco’s electricity distribution customer base increased approximately 2% to 8.4 million customers.
The company reported 41,054 gigawatt-hours of energy sales during the first nine months.
That represented a 0.8% increase year over year.
The modest increase in energy sales contrasts with the stronger growth in consolidated earnings.
This is another indication that changes in the company’s business mix and generation operations are playing an important role.
However, a larger customer base does not guarantee faster growth in electricity consumption.
Demand depends on weather, economic activity and consumption patterns.
CONSOLIDATED REVENUE REACHES ₱443 BILLION
Meralco’s consolidated revenues rose approximately 19% to ₱443 billion during the first nine months.
The increase reflects the group’s scale and developments in its electricity businesses.
Revenue growth should not be interpreted as a corresponding increase in profit.
Electricity businesses incur substantial costs for generating and purchasing power.
Higher electricity prices can increase reported revenues while also raising expenses.
Therefore, the company’s profitability must be evaluated separately from its sales.
The distinction is particularly relevant because energy costs have increased during the year.
PURCHASED POWER COSTS RISE 20%
Meralco reported that purchased power costs increased approximately 20% to ₱338.7 billion.
These expenses reflect the costs of acquiring electricity for its operations.
Higher fuel prices and currency movements can influence power procurement costs.
The Philippine peso’s depreciation is especially relevant when imported fuels or other inputs are priced in foreign currencies.
The increase illustrates why stronger corporate earnings do not automatically translate into lower consumer electricity costs.
Even as power generation contributes more profit to the group, the distribution utility must still account for the expenses involved in purchasing and delivering electricity.
AVERAGE RETAIL ELECTRICITY RATE INCREASES 15%
Meralco reported an average retail electricity rate of approximately ₱13.43 per kilowatt-hour during the nine-month period.
That compares with ₱11.63 per kilowatt-hour in the corresponding period of 2025.
The increase was approximately 15%.
The figures provide context for the pressure faced by consumers.
However, these are period-average rates.
They should not be confused with a specific household’s electricity rate for October.
Individual bills depend on consumption and the applicable components of the monthly electricity rate.
The stronger Meralco profit outlook therefore exists alongside higher average electricity prices for the period.
₱76 BILLION SPENT ON CAPITAL PROJECTS
Meralco reported approximately ₱76 billion in consolidated capital expenditure during the first nine months of 2026.
The spending reflects a continued investment program despite uncertain economic conditions.
The company has allocated substantial capital to renewable power development, battery storage and electricity network improvements.
These projects can support future electricity capacity and operational reliability.
However, capital expenditure is not the same as earnings.
Infrastructure spending often requires years before delivering its full economic benefits.
The quality of project execution will determine whether the investments ultimately produce the expected returns.
MORE THAN ₱54 BILLION ALLOCATED TO RENEWABLES AND STORAGE
Of the reported capital expenditure, approximately ₱54.6 billion was allocated to renewable energy and battery storage projects under MGEN.
The spending supports Meralco’s expansion into cleaner and more diversified power generation.
Battery storage is particularly relevant to renewable energy because solar production changes throughout the day.
Storage systems can help manage when electricity is supplied.
However, renewable energy projects still require commercial agreements, maintenance and grid integration.
They also involve substantial upfront costs.
It would be premature to claim that the investment has already eliminated dependence on conventional generation.
DISTRIBUTION INFRASTRUCTURE RECEIVES ₱21.2 BILLION
Meralco also invested approximately ₱21.2 billion in its electricity distribution business.
The spending covered network modernization, new customer connections and related infrastructure.
These improvements are intended to support system reliability and capacity.
The investment also reflects the continuing need to maintain equipment serving a growing customer base.
However, network spending does not guarantee an immediate reduction in outage frequency across every community.
Actual service reliability depends on the condition of equipment, maintenance, weather events and project completion.
Consumers should assess improvements using published reliability indicators and service outcomes.
ERC APPROVES LONG-DELAYED DISTRIBUTION RATE RESET
Another significant development occurred on October 9.
The Energy Regulatory Commission approved a final determination for Meralco’s distribution rate reset covering the first regulatory period from July 2026 through June 2030.
The regulator approved an overall revenue requirement of approximately ₱342 billion across the four-year period.
That was about 36% below Meralco’s proposed ₱532 billion.
The ERC also approved an average distribution rate of ₱1.48 per kilowatt-hour for regulatory year 2027.
Meralco had proposed ₱2.34 per kilowatt-hour.
These regulatory decisions provide a more predictable framework for the utility’s distribution operations.
However, the approved distribution component should not be confused with the total electricity rate paid by consumers.
WHY THE ERC DECISION MATTERS TO CONSUMERS
The distribution charge covers the regulated cost of transporting electricity through Meralco’s network.
It is only one component of the final electricity bill.
Generation charges, transmission costs, taxes and other applicable items are separate.
Therefore, a lower approved distribution rate does not automatically mean the entire household electricity bill will fall by the same amount.
Other components may increase or decrease independently.
The rate reset is nonetheless important because it establishes limits and requirements for regulated distribution revenue.
It also influences the environment in which Meralco plans future network investments.
PANGILINAN SEES LONG-TERM BENEFITS FROM EARLIER INVESTMENTS
Pangilinan emphasized that the group is realizing gains from investments made in previous years.
This observation highlights the long development timelines associated with energy infrastructure.
Power plants and transmission-related infrastructure can require substantial planning, financing and construction before generating revenue.
The MTerra Solar project demonstrates this process.
The company invested in development before the first commercial supply began in August.
Additional capacity is expected to be delivered in later phases.
For investors, the question is whether these projects can consistently produce returns that justify their costs.
LNG AND THERMAL POWER REMAIN PART OF THE MIX
Although Meralco is expanding its renewable energy portfolio, conventional generation remains important.
The company’s generation earnings benefited from liquefied natural gas and thermal power operations.
These assets help supply electricity under conditions that differ from solar generation.
However, fuel-based power facilities can be exposed to price volatility and supply disruptions.
Imported energy costs may also be affected by currency fluctuations.
This means Meralco’s diversification strategy includes both opportunities and risks.
The company must balance reliability, affordability, environmental requirements and the financial performance of its assets.
ECONOMIC UNCERTAINTY COULD STILL AFFECT RESULTS
Meralco’s record-profit outlook comes amid broader economic challenges.
Pangilinan has warned about rising prices, elevated borrowing costs, a weakening peso and potential El Niño-related pressures.
Higher interest rates can raise the cost of financing infrastructure projects.
Currency depreciation can make imported equipment and fuels more expensive.
Extreme weather can affect electricity demand and operations.
These factors are relevant even to a large and profitable company.
They also explain why management attached a caution about unforeseen developments to its full-year earnings guidance.
WHAT OTHER NEWS OUTLETS CONFIRM
InsiderPH reported on October 28 that Meralco had upgraded its 2026 core profit outlook to ₱56.6 billion.
The Philippine Star independently reported the forecast, the ₱44.8-billion nine-month core income and the earnings contributions from distribution, generation and other businesses.
BusinessMirror confirmed the core and reported income figures and management’s outlook.
Daily Tribune documented the 24% increase in generation earnings, the company’s capital expenditure and the higher average electricity rate.
Context.ph also reported on Meralco’s financial performance and electricity sales.
For MTerra Solar, MGEN’s September 3 announcement and the Philippine Stock Exchange disclosure directly verify the start of Phase 1 commercial operations on August 26.
The Energy Regulatory Commission’s October 10 press release independently confirms the distribution rate reset.
Together, these sources support the main earnings, infrastructure and regulatory developments.
THE BIGGER QUESTION: WILL HIGHER PROFITS MEAN BETTER POWER SERVICE?
Meralco’s nine-month results demonstrate how significantly the company has evolved beyond its traditional distribution operations.
Power generation now accounts for 41% of its consolidated core income, approaching the 45% contribution from electricity distribution.
Renewable energy and battery storage projects are becoming central to its investment strategy.
MTerra Solar has already begun providing contracted electricity, with more capacity planned.
The company’s outlook points to another possible record profit year.
But customers face a different measure of success.
Electricity bills remain sensitive to fuel costs, power procurement expenses and currency movements.
Reliable service also requires continued investment in the distribution network.
For Filipino households, the true test of Meralco’s expansion is not simply how much profit it earns, but whether its investments support electricity that is reliable, accessible and affordable over time.
And as Meralco targets ₱56.6 billion in core earnings, one question remains:
Will the power giant’s growing generation business and massive solar investments eventually ease the burden on electricity consumers—or will record corporate profits continue rising alongside household power bills?
