Marcos signs law extending Meralco franchise

MANILA, Philippines — President Marcos has extended Manila Electric Co. (Meralco)’s franchise for another 25 years, allowing it to continue operating power distribution systems in Metro Manila and nearby provinces until 2053.

In a statement yesterday, Meralco chairman and CEO Manuel V. Pangilinan expressed his gratitude to the President and lawmakers for enacting the measure renewing Meralco’s franchise, originally set to expire in 2028.

“We welcome the renewal of Meralco’s franchise – a recognition of our role in helping power the nation’s growth. This development fortifies our commitment to deliver stable, reliable and affordable electricity to millions of Filipinos across our franchise area,” Pangilinan said.

The law’s passage, he said, underscores a shared commitment to ensuring the power utility meets the evolving needs of its customers through “innovation, operational excellence and dependable service.”

“The fresh franchise enables us to implement long-term energy infrastructure projects that will further improve the delivery of electricity to homes, businesses and industries that fuel the country’s development,” Pangilinan said.

“It also allows us to continue investing in the modernization and expansion of our distribution network – making it more resilient to climate-related disruptions – while introducing innovations that enhance efficiency and raise customer experience,” he said.

As the country’s largest private distribution company, Meralco serves at least eight million customers in Metro Manila, Bulacan, Cavite, Rizal and select areas in Batangas, Laguna, Quezon and Pampanga.

House Bill 10926, a consolidation of HBs 9793, 9813 and 10317, was approved by the House of Representatives on third reading last Nov. 26 and the Senate last Feb. 3.

The measure was then transmitted to the Office of the President for signing last March 14.

“With the continued trust of our leaders and stakeholders, we remain committed to transparency, regulatory compliance and corporate social responsibility,” Pangilinan said.

“Meralco stands firm in its mission to support the government’s nation-building agenda, drive economic progress and improve the lives and economic well-being of our people,” he added.

An analyst interviewed by The STAR said the renewal of Meralco’s franchise could be a crucial step toward lowering power costs.

The development has assured Meralco customers of continued electric service for the next 25 years, according to investment banker Juan Paolo Colet.

“The renewal will also allow Meralco to push ahead with its large capex (capital expenditure) plans to sustain profitable growth. We are optimistic that the company will use the franchise extension as an opportunity to improve its services and lower the cost of electricity,” Colet said. Executive Secretary Lucas Bersamin said Malacañang will release a copy of the law after assigning the appropriate number for the Republic Act.

Rep. Joey Salceda thanked President Marcos for his “swift and favorable action” on Meralco’s franchise extension bid.

“During the deliberations for the franchise extension, Meralco committed to P206 billion in capital expenditures over the next five years to reduce systems losses and make distribution costs efficient. It also committed to help power more electric vehicles and provide facilities for industries of the future, such as data centers,” he said.

“Meralco also committed to continuing to improve system reliability. Back in 2011, the average user experienced some 550 minutes in power interruptions,” he said. “Now, it’s down to as low as 123 minutes in the entire year. Such reliability was unthinkable back in the 1990. And Meralco commits to doing better every year.”

“In fact, I calculated that if the whole country were serviced with a provider as reliable as Meralco, an additional P204 billion in gross value added would be made in the economy, bringing our growth levels closer to what China experienced during its boom years,” Salceda pointed out. — Alexis Romero