Meralco confident of getting another waiver from WB, ADB

The Manila Electric Co. (Meralco) is optimistic that it could get another reprieve from its long-term multi-lateral creditors, which include the Asian Development Bank (ADB) and the World Bank (WB).

"We have been asking them (ADB and WB) to waive our covenant. With these developments, maybe they could still give us a waiver for another year," Meralco chief finance officer Daniel Tagaza said.

Of the P32-billion total debts of Meralco as of end-2002, about 80 percent or P24 billion is owed to ADB and WB.

This coming September to October, Meralco is scheduled to pay some $43 million in maturing long-term debts.

Meralco utility economics head Yvanna dela Peña said they met with ADB officials early this week to negotiate for another waiver.

"We just told them that we will be communicating the results of our first quarter operations within next week," she said.

Dela Peña said they will also inform the long-term creditors that they may not meet the required return-on-rate-base (RORB) level of eight percent this year. Last year, the power utility firm’s RORB was 3.9 percent.

Meralco submitted another waiver for WB and ADB last December. This waiver, Tagaza said, will be for 2002.

"We did not meet the required RORB for last year. The same happened in 2001," he said. A waiver will enable Meralco to avoid being declared in default for its $150 million loan from ADB and WB.

RORB is a measure of the company’s profitability. In 2001, Meralco’s RORB stood at five percent.

Meralco’s RORB started to deteriorate in 2000 due to failure to get approval from the ERC for its 30-centavo basic rate. It submitted its application for a rate hike in April 2000.