Meralco Expects Sales Growth to Rebound as El Niño Drives Philippine Power Demand

Upgraded Forecast After Mid-Year Turnaround

Manila Electric Co., the Philippines' largest power distributor, has raised its full-year sales growth forecast to 2-2.5 percent after July electricity demand climbed 6.9 percent, signaling a rebound from a weak first half. The revised outlook, announced by executive vice president and chief operating officer Ronnie Aperocho, lifts the earlier projection of 1-2 percent growth.

The utility expects warmer conditions associated with the El Niño weather phenomenon to sustain higher consumption through year-end. Commercial customers, which represent 38 percent of total energy sales, and residential users at 36 percent remain the dominant segments, with industrial accounts making up the balance.

First-Half Contraction Driven by Weak Q1

From January through June, Meralco distributed 26,967 gigawatt-hours across its franchise area, down from 27,091 GWh in the same period of 2025. The decline stemmed largely from subdued first-quarter demand; while second-quarter consumption picked up on hotter weather, the improvement fell short of offsetting the earlier shortfall.

The company's customer base reached 8.3 million connections by mid-year, with residential accounts comprising at least half of new additions. That growth, however, comes with a structural challenge: a rising share of new households are installing rooftop solar arrays, displacing grid purchases.

Rooftop Solar Erodes Grid Sales

Self-generation by customers totaled approximately 372 GWh in the first six months, according to Meralco data. Aperocho acknowledged the trend as a persistent headwind. "Some of these new residential customers that we're energizing also have their own rooftop solar, so that's really the challenge," he said.

The Department of Energy last week issued a circular removing administrative barriers to small-scale solar installations. Households and medical facilities no longer need pre-installation clearances, technical permits, or inspection fees. The move responds to public sentiment: a recent Pulse Asia survey found that nine in ten Filipinos want government action to make rooftop solar more affordable amid rising electricity costs.

Commercial and Industrial Demand in Focus

While residential solar adoption chips away at the edges, Meralco's revenue mix remains anchored in commercial and industrial segments. Office towers, malls, and factories in Metro Manila and surrounding provinces account for nearly two-thirds of energy sales, a concentration that insulates the utility from household-level disruption in the near term.

The company has not disclosed whether it plans to adjust capital spending or tariff structures in response to distributed generation trends. Regional peers in Southeast Asia, from Thailand's Provincial Electricity Authority to Indonesia's PLN, face similar pressures as solar panel costs fall and feed-in tariff schemes mature.

Policy Tailwinds and Demand Drivers

The Department of Energy's streamlined permitting aligns with broader government efforts to expand renewable capacity and lower consumer bills. For Meralco, the policy shift accelerates a transition already underway: distributed energy resources are moving from niche to mainstream across the archipelago's urban centers.

El Niño conditions, meanwhile, offer a cyclical boost. Higher ambient temperatures lift air-conditioning loads in commercial and residential buildings, a pattern that has historically driven peak-season sales. If the weather phenomenon persists into the fourth quarter as meteorological agencies expect, Meralco's revised guidance may prove conservative.

The utility's ability to meet its upgraded forecast will hinge on sustaining July's momentum and managing the structural erosion from behind-the-meter generation. With half the year still ahead, the interplay between climate-driven demand and customer-owned solar will shape the final tally.