The increase marks the end of two consecutive months of rate declines for Meralco’s more than 8.3 million customers. Meralco attributed the surge to a 49.73-centavo rise in generation charges, which were pushed higher by elevated fuel costs, a weaker Philippine peso, and tighter electricity supply conditions in the Luzon grid. Specifically, charges from First Gas increased by P3.2206 per kWh due to higher fuel costs, while rates from the Wholesale Electricity Spot Market (WESM) rose by P3.5167 per kWh following bill adjustments and supply constraints. These increases were only partially offset by a P0.7567 decline in charges from power supply agreements (PSAs), lower transmission charges from the National Grid Corporation of the Philippines, and a net reduction in taxes and other charges of 3.398 centavos per kWh. The removal of the 12% value-added tax on allowable system loss charges also contributed to limiting the overall increase.
The October rate does not yet include a newly approved increase in Meralco’s distribution charges. The Energy Regulatory Commission (ERC) recently approved an average distribution rate of P1.48 per kWh, up from the current P1.35, following the utility’s first regulatory rate review in 15 years. Meralco expects to implement this higher distribution rate starting with November billing. Unlike generation and transmission fees, which are pass-through costs, distribution charges cover the utility’s own operations and allow for a regulated profit. Company officials stated that the higher distribution rate is intended to fund investments in network modernization, including advanced metering infrastructure and cybersecurity improvements.
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Consumers are expected to see some financial relief in November as Meralco begins processing a P2.64-billion refund approved by the ERC. This refund covers excess collections from the first half of 2026 and will be distributed over six months. Residential customers will receive a credit of P0.1733 per kWh, equivalent to approximately P34.66 for a household using 200 kWh monthly. This additional relief will partially offset the impact of the new distribution charges taking effect next month.
“We welcome the regulator’s prompt action on our latest refund application, which we hope will give immediate relief to consumers,” said Jose Ronald V. Valles, Meralco Senior Vice President and Head of Regulatory Management. “We believe that this will allow Meralco to move forward with greater clarity as we pursue investments and initiatives to modernize our distribution network and enhance service delivery.”
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Meralco noted that it is still reviewing the detailed decisions from the ERC regarding the regulatory rate reset and the refund mechanism to determine the precise impact on end users. The company continues to implement two simultaneous refunds totaling P1.0139 per kWh for residential customers, covering previous regulatory periods from July 2022 to December 2025. The next significant billing change will occur with the November cycle, when the higher distribution rate takes effect alongside the new refund credits.
John Harris covers the economy with a focus on trade, financial policy, inflation, markets, and major business developments. He follows economic data, government decisions, central-bank developments, and changes in international commerce. John aims to explain what the numbers show while avoiding unnecessary speculation, giving readers a practical view of wider economic conditions.
