Meralco expects slower sales growth in 2018

MANILA Electric Company ( Meralco), the largest power distribution utility in the Philippines, said it expects sales growth this year to ease to around 3.5 percent from an estimated 4.9 percent in 2017 as demand could be impacted by higher prices brought about by new taxes.

Meralco President Oscar Reyes told reporters there was a risk that by higher tax charges, higher electricity prices arising from the coal tax and the value added tax (VAT) on transmission charge, plus the higher cost of Small Power Utilities Group (SPUG) that will translate to universal charges, may impact demand for electricity.

“Our hope is that if there is some negative impact, that the ‘Build Build Build’ program could in turn offset that,” he said.

Turning to last year’s sales, Reyes said all the sectors showed hefty growth. “Surprisingly, commercial has shown significant growth,” Reyes said.

In October last year, Meralco said its unaudited consolidated core net income for the nine months to September 2017 rose to P15.4 billion from P15 billion previously. It also said it sold 31,401 gigawatt-hours of electricity during the period, higher by 4 percent compared to the level in the same period of 2016.

Across customer classes, residential sales were up 4 percent, commercial sales up 5 percent and industrial sales up 4 percent during the nine months to September.

Shares of Meralco dropped P9 or 2.69 percent to end at P325 on Thursday.