Meralco Rate Hike Approved: What It Means for Your Electricity Bill
Filipino households are bracing for higher electricity bills after regulators approved Meralco's first distribution rate increase in 15 years. The decision adds another layer of pressure on family budgets already stretched thin by soaring inflation, which hit 7.2% in September.
The Energy Regulatory Commission (ERC) has approved a new average distribution rate of P1.48 per kilowatt-hour (kWh), up from the current P1.35 per kWh. That's an increase of about 13 centavos per kWh, though the exact impact on residential bills remains unclear as Meralco has yet to explain how the new rate will be applied.
This comes at a difficult time for consumers. In September, Meralco's overall residential rate already stood at P14.7424 per kWh. A household using 200 kWh was already paying nearly P2,950 monthly, and that was before this latest adjustment.
Why is Meralco raising its distribution rate now?
The distribution charge is just one part of your electricity bill, but it's the portion that goes directly to Meralco to cover its operations and profit. The company's distribution rates were last reviewed in 2011 and have been frozen since 2015 because successive ERC administrations failed to complete regular rate reviews.
Meralco originally asked for P532 billion in revenue over four years. The ERC cut that to P342 billion, a 36% reduction. Even with that cut, the approved rate is still higher than what customers currently pay.
ERC Chairperson Francis Juan defended the decision, saying the regulator trimmed unjustified capital projects, disallowed excessive operating costs and bad debt provisions, and removed contingencies and duplicated assets from the asset base. He also noted the ERC used a lower return on capital than Meralco proposed.
“The approved revenue gives Meralco a clear path to operate more efficiently and to roll out the capital projects needed for a more reliable network, including new substations and lines, modernized metering, and measures to bring down system loss. Meralco will be held to delivering these results,” Juan said.
What does Meralco say about the increase?
In a statement on Saturday, October 10, Meralco said it had yet to receive the full decision and needed to review it before determining its implications. Jose Ronald Valles, Meralco's head of regulatory management, pointed to planned investments in advanced metering infrastructure, cybersecurity, and other network modernization projects.
“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,” Valles said.
Record profits and a big share deal
The rate increase comes even as Meralco continues to post record profits. The company reported P50.6 billion in core profit in 2025. In the first half of 2026, its consolidated core net income reached P26.5 billion, up 3.8% from a year earlier.
The approval also arrived just days after Manuel Pangilinan-led Metro Pacific Investments Corporation (MPIC) completed its P12.4-billion acquisition of additional Meralco shares from San Miguel Global Power on Thursday, October 8. That deal raised MPIC's stake in the utility to 49.4%.
The shares were purchased at P580.99 each, about 40% above Meralco's market price that day. Meralco shares climbed 5.3% to P437 on Friday, October 9, the same day regulators approved the rate reset, though the decision was only announced publicly the following day.
So much for Marcos' push to lower electricity bills
There's a bitter irony here. President Ferdinand Marcos Jr. has been pushing to bring down electricity costs, particularly by removing system loss charges that consumers have long shouldered.
During his July State of the Nation Address, Marcos was explicit about the need to lower energy costs.
“Malinaw din sa pamahalaan ang hinaing ng taumbayan na pababain ang presyo ng kuryente sa bansa,” Marcos said. (The plea of the public to lower the price of electricity in the country is clear to the government.)
Among the reforms he championed was the removal of system loss from consumer bills. Shortly after that proposal, Pangilinan, who also serves as Meralco's longtime chairman, warned that the power industry “may not survive” if companies were forced to absorb system loss costs themselves.
The government has made only limited progress. Starting with the October billing, Meralco customers will no longer pay the 12% value-added tax on allowable system loss charges, but the underlying charge itself remains firmly in place.
Energy agencies are still drawing up plans to reduce these losses. For consumers, that means system loss charges will likely continue for years, even as Meralco prepares to collect higher distribution rates.
Frequently asked questions about the Meralco rate hike
When will the new Meralco rate take effect?
The ERC and Meralco have not yet announced when the new distribution rate will appear on consumer bills. Meralco says it needs to review the full decision first.
How much more will I pay on my electricity bill?
The exact increase depends on your consumption and the final residential rate. The approved average increase is about 13 centavos per kWh, but Meralco has yet to clarify how this translates to actual bills.
Why did the ERC approve the increase if Meralco is earning record profits?
The ERC says the approved revenue gives Meralco a clear path to operate more efficiently and invest in network modernization. The regulator also cut Meralco's original request by 36%.
What is the system loss charge on my bill?
System loss refers to electricity lost during transmission and distribution. President Marcos has pushed to remove this charge from consumer bills, but so far only the VAT on it has been removed, not the charge itself.