MANILA, Philippines - Telecommunications magnate Manuel V. Pangilinan is taking the reins of the country’s largest power retailer, Manila Electric Co. (Meralco), beginning July 1, replacing Manolo Lopez who will stay on as company chairman.
Pangilinan, chairman of Philippine Long Distance Telephone Co. (PLDT), will assume the position of president and chief executive of the power utility giant when Lopez steps down after taking on the role for 24 years or since 1986.
Lopez, who is well-loved by the power firm’s employees, said it was time to move on and fulfill his duty to his family. “It’s time for me to do my share and serve the Lopez family business. I had been asked several times in the past to spend more time at Benpres and Lopez Inc. but my devotion and loyalty to Meralco as well as the demands of running this company prevented me from doing so. But now, I cannot anymore renege on my duty to my family,” he said during Meralco’s annual stockholders’ meeting yesterday.
As he prepares to relinquish his post, Lopez, who was partly responsible for turning around an ailing company, asked Meralco shareholders to give the same support he received from company employees to the incoming president and assured investors that no matter what happens, Meralco’s service goes on.
“We are committed to keep those lights on and even more committed to explore and create more values in synergistic and related businesses as well, to ensure continuous energy supply and to reduce the price of electricity to our customers,” Lopez said.
Pangilinan also chairs Metro Pacific Investments Corp. the Philippine flagship of Hong Kong-based conglomerate First Pacific Co., and PLDT unit Pilipino Telephone Corp. The three companies together effectively own more than 40 percent of Meralco through Beacon Electric Asset Holdings.
Beacon was set up earlier this year to hold the Meralco shares owned by the PLDT/MPIC/Piltel group.
Pangilinan said Meralco would continue to “move forward and preserve the best of the power distributor”. “It’s too early to tell but we would like to continue what Meralco is doing and change only what’s needed for the future. We want to continue working with San Miguel and Meralco people. We don’t see any major change moving forward,” Pangilinan said.
For his part, San Miguel president and chief operating officer Ramon S. Ang, said the diversifying conglomerate is holding on to its 27 percent stake in Meralco and would buy more should there be a good opportunity. “ If there’s a good deal, why not? It’s a good investment. We’re not selling,” Ang said.
Pangilinan said Meralco is unlikely to match last year’s growth rate with core earnings seen to grow 57 percent this year to P11 billion. Last year, the power retailer reported a 169 percent surge in consolidated core net income to P7 billion from P2.6 billion in 2008.
Lopez said Meralco is looking at power generation as its new frontier for growth but noted that it is still in the exploratory stage and is under review.
He said Meralco is actively exploring and if justified, take advantage of opportunities beyond its congressional franchise to bring the Meralco brand of service to areas outside its current borders.
“We are looking forward to serving the Cavite Economic Zone and other end-users that are currently directly connected to the grid, thus bypassing Meralco, by offering them attractive solutions for their electric service needs,” he said.
Meralco stocks closed at P168 each yesterday, down P1 from Monday’s close.
Lopez said Meralco launched a major transformation program in the mid-1990s which saw the reduction of system loss and power interruptions through lower costs, rationalized capital investments, resulting to improved overall productivity and increased customer satisfaction levels.
He cited Meralco’s system loss was successfully reduced to 8.15 percent from a high of 21 percent since 1986. He also pointed out that there were only an average of six occurrences of no power in a year compared with the high of 37 times in the early 1990s. “And even amidst increasing cost of power due to generation fuel costs and the power supply and demand imbalance, our customer surveys showed an increasing understanding among our customers of their utility company,” Lopez said.