Meralco, the Philippines’ largest power distributor, reported a 2% increase in its consolidated core net income (CCNI) to ₱11.4 billion for the first quarter of 2026, according to a press release from the company. This covers the three months ending March 31, 2026.

What is Core Net Income?

Think of core net income as the company’s “regular” profits from running its business – like delivering electricity to homes and businesses. It’s like getting your regular allowance, not counting birthday money or other special one-time gifts.

Main Highlights: What Happened This Quarter

Here are the most important things that happened at Meralco during the first three months of 2026:

• Core net income increased to ₱11.4 billion (up 2% from ₱11.2 billion last year)
• Reported net income reached ₱10.8 billion (up 4% from ₱10.4 billion)
• Total revenues climbed to ₱120.8 billion (up 5%)
• Core earnings per share stood at ₱10.137

The Iran War Challenge

According to Chairman Manuel V. Pangilinan, the company faced a significant challenge when war broke out in Iran on February 28, 2026. This conflict created serious problems for their fuel supply chain and caused power prices to spike.

“We were fortunate to have certain of our solar facilities starting to supply indigenous and clean energy, in March 2026, at very reasonable prices,” Pangilinan explained. The company also relied on coal contracts that had already been agreed upon at reasonable prices, which helped prevent electricity rates from jumping too high.

Breaking Down Meralco’s Business

Meralco makes money from three main business areas:

1. Distribution Business (46% of profits)

This is Meralco’s main business – delivering electricity to homes and businesses. It contributed ₱5.3 billion to the company’s core earnings. However, actual electricity sales volume decreased by 2% to 12,273 GWh (gigawatt-hours) compared to last year’s 12,493 GWh.

Why did sales go down? Several reasons:

• Cooler weather compared to last year (remember, when it’s cooler, people use less air conditioning)
• More customers installing their own rooftop solar panels, which reduced their need to buy electricity by about 42 GWh
• Some businesses used less power due to empty office spaces and energy-saving initiatives

By the end of March 2026, Meralco served 8.3 million customers. More than 20,000 customers now have solar panels connected to Meralco’s grid through a program called Net Metering – that’s 36% more than last year!

2. Power Generation Business (45% of profits)

This is where Meralco actually produces electricity, not just delivers it. This division, called Meralco Powergen Corporation (MGEN), contributed ₱5.1 billion – up 51% from last year.

The big reason for this jump? MGEN now owns 40.2% of LNGPH, a company that runs a large liquefied natural gas (LNG) terminal and power plant in Batangas. This investment contributed for a full three months in 2026 versus being newly acquired in 2025.

MTerra Solar Achievement: One of the most exciting developments was MTerra Solar starting to deliver clean solar energy to the Luzon grid. By the end of March, it was supplying 250 MW (megawatts) of power. It also switched on the Philippines’ largest battery energy storage system, which can store 450 MWh and deliver power at night when the sun isn’t shining.

MGEN now has a total generating capacity of 5,069.7 MW across all its power plants in the Philippines and Singapore.

3. Retail Electricity Supply and Other Businesses (9% of profits)

This includes selling electricity to large commercial customers who can choose their supplier. This segment contributed ₱978.4 million to core earnings.

Why Did Your Electricity Bill Go Up?

Meralco’s average retail rate increased by 12% to ₱12.39 per kilowatt-hour (kWh) in early 2026 from ₱11.06 per kWh in the same period of 2025. Let’s break down why:

• Generation charge (the cost of producing electricity) went up 10%. This makes up 62% of your total bill. The increase included ₱0.30 per kWh for fuel cost recoveries that regulators approved for four power companies.
• Peso depreciation: The Philippine peso weakened to an average of ₱59.102 per US dollar from ₱57.96 the year before. Since fuel is bought in dollars, this made it more expensive.
• Transmission charge (the cost of moving electricity through high-voltage lines) increased 38%, mainly due to higher charges from the National Grid Corporation of the Philippines (NGCP).

There’s some good news though: Meralco’s distribution charge (what Meralco charges for delivering electricity to your home) actually went down by 3% to ₱1.36 per kWh. The company started giving refunds to customers in February 2025, totaling about ₱20 billion.

Company Spending and Investments

Meralco spent ₱19.5 billion on capital expenditures (building and improving facilities) during the quarter. About 71% (₱13.8 billion) went toward building solar power plants and battery storage systems, while ₱5.7 billion was spent improving the distribution network – things like new connections, replacing old equipment, and moving electric poles for government infrastructure projects.

Nuclear Energy Plans

In March 2026, MGEN received a $2.8 million grant (about ₱162 million) from the U.S. Trade and Development Agency to study whether small modular reactors (a type of nuclear power plant) could work in the Philippines. This is part of Meralco’s Nuclear Energy Strategic Transition (NEST) program.

Regulatory Updates

Public hearings began in March 2026 for Meralco’s request to set new rates for the next four years (July 2026 to June 2030). The company wants to invest ₱272 billion in improvements including customer programs, network upgrades, renewable energy, and bringing electricity to more areas.

What the Company Says About the Future

Chairman Pangilinan stated that Meralco remains committed to managing the effects of higher power prices caused by the Iran war. The company is reviewing its fuel sources and working on strategies to protect customers from price swings.

“We will support the development of indigenous energy sources and the large-scale build-out of renewable energy projects,” Pangilinan said. The company is also exploring electric vehicles, rooftop solar, and nuclear energy technologies.

About Meralco

Manila Electric Company (Meralco) is the Philippines’ largest electricity distribution company, serving 8.3 million customers across Metro Manila and nearby provinces. The company operates under the stock symbol MER on the Philippine Stock Exchange.