By Abigail Mary P. Yarola, Deputy Research Head
Shares of Manila Electric Company (Meralco) declined last week despite favorable developments regarding the electricity distributor and its position as one of the most traded stocks by value turnover.
Despite the week's volatility, this activity signals continued investor confidence supported by the company's earnings report.
From February 27 to March 6, Meralco recorded turnover worth P860.55 million from 1.40 million shares, making it the 11th.th The most actively traded stocks for the week, according to data from the Philippine Stock Exchange (PSE).
Shares closed at P617 on Friday, 3.3% lower than a week ago. The industrial index fell 4.8%, while the benchmark PSE index fell 4.4%.
Year-to-date, the Pangilinan-led company gained 7.5%, while the industrial sector gained 4.3% and the PSE index rose 4.4%.
Juan Alfonso G., equity trader at Timson Securities. Teodoro said the slight downward trend reflected cautious market sentiment and some profit-taking after earlier gains.
He said trading activity was supported by key developments related to the company.
“Despite the pullback, the stock remained one of the most actively traded by value as investors continued to focus on large-cap defensive companies with stable earnings and dividend income,” he said in a Viber message.
Diversified Securities, Inc. Equity trader Aniceto K. Pangan said Meralco's decline also reflects concerns over the ongoing Middle East crisis, which could bring long-term economic and inflationary effects to the Philippines.
Recent developments at the company include a review of its fuel mix, which includes liquefied natural gas, coal and diesel. Changes in global fuel prices due to Middle East conflicts may affect the cost of electricity.
Meralco said that even though it does not source oil for its power supply, the Middle East conflict could indirectly affect power rates through inflationary pressures.
“If global prices of fuels such as liquefied natural gas, coal and diesel rise due to geopolitical tensions, this could lead to higher generation charges and slightly higher electricity rates in the coming months,” Mr Teodoro said.
He said investors will likely keep an eye on fluctuations in global fuel prices, as these could impact short-term electricity costs for consumers.
Meralco is also awaiting the decision of the Energy Regulatory Commission (ERC) on its application to recover P7.98 billion in under-recovery filed almost three years ago.
In 2023, the company filed an application to recover P8.01 billion for generation, transmission, system losses and pass-through taxes from January to December 2022. This would translate to an increase of approximately 21.91 centavos per kilowatt-hour (kWh) over the 12-month period.
Meralco also reported a total overrecovery of P30.62 million from lifeline subsidies, senior citizen rebates and local franchise taxes, equivalent to a refund of about 0.09 centavos per kWh to consumers.
“Investors felt approval was possible because these were legitimate expenses,” Mr. Teodoro said. He said that if approved, there may be a slight increase in electricity tariffs, but significant change in consumption is unlikely.
The company plans to finance its P247.14 billion capital expenditure program using a combination of cash, debt and potential partnerships.
“Meralco expects about 3% growth in energy sales this year, which is generally considered sustainable as power demand grows steadily with economic activity and population growth,” Mr. Teodoro said.
He said the projected recovery over the next few quarters is mainly based on favorable weather, higher power usage during summer and sustained business and economic activities.
Meralco expects energy sales volumes to grow 3% for 2026, with flat growth in the first quarter and recovery from the second quarter.
In 2025, Meralco's net income increased by 9.4% to P50.84 billion, while consolidated revenues increased by 5.7% to P497.33 billion.
Mr Teodoro said the company's financial position remains strong, supported by stable cash flows from its regulated distribution business and consistent power demand. “Our Q1 2026 forecast for Meralco is approximately P13.52 billion,” he said.
Mr. Pangan described Meralco's move to review its power supply amid rising fuel prices as a positive step to ease the burden on consumers.
“The under-recovery is still being reviewed by the ERC. The ERC will decide how to implement it without putting a huge burden on consumers,” he said.
He said the generation business contributed to Meralco's growth in 2025, with a projected growth of 3% in energy sales for 2026. They placed support at P600 and resistance at P640 per share.
Mr Teodoro described the development as “very significant”.
“It also highlights Meralco's advantage over other distribution utilities as it serves the country's largest and most economically active areas, where power demand is generally stronger and more consistent,” he said.
He said traders and investors can consider Meralco as a stable utility company with consistent earnings and dividends. “Our next resistance for Meralco will be around P640-650 per share. Current support will be short-term, around P610-600 per share.”
Meralco's controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. is owned by. Hastings Holdings, Inc., a subsidiary of PLDT Beneficial Trust Fund MediaQuest Holdings, Inc. An entity of, is interested in. businessworld Through the Philippine Star Group, which he controls.