Following back-to-back price cuts in previous months, the Manila Electric Company (Meralco) on Monday announced an electricity rate increase of ₱0.3191 per kilowatt-hour (kWh) for October. The adjustment pushes the overall rate for a typical household to ₱15.0615 per kWh, up from ₱14.7424 per kWh in September.
For residential households consuming an average of 200 kWh a month, the rate hike translates to an estimated ₱64 addition to their total monthly bill. Commercial and industrial operations will likewise face higher operational overhead due to the increased cost per kilowatt-hour.
Meralco attributed the rate increase primarily to a ₱0.4973 per kWh jump in generation charges, which are pass-through costs paid directly to power suppliers. Higher fuel expenses from First Gas/Prime CoreGen—driven by elevated global prices for liquefied natural gas linked to ongoing conflict in the Middle East—contributed heavily to the increase. A weaker Philippine peso against the U.S. dollar further inflated these costs, as approximately 89 percent of First Gas/Prime CoreGen expenses are dollar-denominated.
Higher prices in the Wholesale Electricity Spot Market (WESM), which climbed by ₱3.5167 per kWh due to billing adjustments and tighter supply conditions in the Luzon grid, also pushed the generation charge upward. First Gas/Prime CoreGen and WESM accounted for 24 percent and 2 percent of Meralco’s supply requirements for the period, respectively.
These increases were partially offset by a ₱0.7567 per kWh reduction in charges from Power Supply Agreements (PSAs), which make up 74 percent of Meralco’s supply mix. Lower fuel costs from South Premier Power Corp. due to its use of domestic Malampaya natural gas helped cushion the impact of currency depreciation on PSA expenses.
In addition, lower transmission and ancillary service charges from the National Grid Corporation of the Philippines, alongside a net decrease in taxes, provided further relief. Ancillary service costs dropped by ₱0.1321 per kWh following reductions in the Reserve Market, while tax costs fell by ₱0.1436 per kWh due to a higher proportion of VAT-exempt indigenous natural gas and the removal of value-added tax on system loss charges.
Looking ahead, Meralco noted two major regulatory developments approved by the Energy Regulatory Commission (ERC) that will affect future bills. The ERC approved an average distribution rate of ₱1.48 per kWh for Meralco for the July 2026 to June 2030 period, resolving outstanding regulatory matters after a 15-year period without a formal rate reset. Meralco stated this will provide clarity to pursue network modernization projects, including cybersecurity upgrades and advanced metering infrastructure.
To help mitigate costs for consumers, the ERC also approved Meralco’s application to refund ₱2.64 billion to customers starting with the November 2026 billing cycle. The refund, which addresses tariff differences during the January to June 2026 lapsed period, will run over six months and provide an average reduction of ₱0.1733 per kWh for residential accounts. This comes on top of existing ongoing refunds totaling ₱1.0139 per kWh for residential customers covering previous lapsed periods from July 2022 to December 2025.
In anticipation of the El Niño phenomenon, Meralco assured the public that it has secured sufficient power supplies to serve its 8.3 million customers during expected spikes in temperature and demand. The utility urged households to adopt energy efficiency habits to manage their consumption and called on commercial establishments to join the Interruptible Load Program, where large businesses run their own generators during peak demand to prevent grid-wide power interruptions.
