Dig up the truth in Meralco ownership
ACCORDING to their published online corporate profile, “Meralco is the largest private sector electric distribution utility company in the Philippines covering 39 cities and 72 municipalities. Its franchise area of over 9,685 square kilometers is just 3 percent of the total land area of the Philippines, but accounts for 55 percent of the country’s electricity output.” It celebrated 120 years of service in 2023, committed to providing reliable and affordable energy to its 7.75 million consumer base.
Meralco is owned by the following principal/substantial stockholders: Beacon Electric Asset Holdings Inc. (34.96 percent), JG Summit Holdings Inc. (29.56 percent) and Metro Pacific Investments Corp. (10.50 percent). As of the end of 2021, the remaining 24.91 percent shareholdings are held by directors, officers and employees of Meralco, the government, other corporations and other individuals.
Based on its public filings, Meralco was incorporated on May 6, 2019 as the Manila Electric Co. As of May 28, 2024, it had 1,127,098,705 shares of common stock outstanding and debt securities amounting to P2.868 billion.
The most recent legislative franchise granted to Meralco was through Republic Act 9209, which was approved on June 9, 2003. This act provided Meralco with a 25-year franchise, set to expire in 2028.
Letter to Romualdez
Recognizing the importance of stable energy distribution, senior lawmakers from the administration are already endorsing the renewal of Meralco’s franchise, despite it being still three years before its expiration. Prominent House Representatives Joey Salceda and Rufus Rodriguez have publicly affirmed their support for extending Meralco’s franchise by another 25 years, highlighting the crucial role the power distributor plays in the country’s infrastructure and energy sector.
In response to recent endorsements for Meralco’s franchise renewal, an adviser to President Ferdinand R. Marcos Jr. has sent a letter to House Speaker Ferdinand Martin G. Romualdez. The adviser acknowledges that renewing Meralco’s franchise would signify the stability of government policies on investments, thereby boosting investor confidence in the country. However, the adviser also highlights persistent issues related to Meralco’s equity ownership that require further clarification, investigation and rectification, even though these issues are not directly related to the franchise renewal itself.
He alleged in his letter that “historically, during the administration of the late President Ferdinand E. Marcos Sr., it was widely reported that the government, utilizing the funds of the Government Service Insurance System (GSIS), acquired the Meralco shares of the Lopez family. President Marcos Sr. then allocated ownership of Meralco to the Filipino people, particularly its subscribers, who were beneficiaries of annual dividend checks.”
“The scenario shifted dramatically when President Corazon Aquino assumed office in 1986. She restored Meralco to the Lopez family at no cost. Subsequently, during President Gloria Macapagal Arroyo’s term, the GSIS attempted to gain control of Meralco’s management, leading to a legal battle at the Securities and Exchange Commission (SEC). During the pendency of this case, the Lopez family sold their equity to Metro Pacific Investments Corp. (MPIC), led by Manny Pangilinan. This transaction, executed through a stock swap, effectively maintained the Lopezes’ stake in Meralco through their shares in MPIC.”
The presidential adviser stated that while his “concern lies with the shares originally purchased by the government and subsequently reallocated to the public under the administration of then-President Marcos Sr. This matter needs thorough investigation to clarify the transfer of ownership facilitated by President Aquino and the subsequent legal implications.”
“The renewal of Meralco’s franchise presents an opportune moment for the House of Representatives to delve into this issue. I recommend a comprehensive review of the case records from the SEC, the Court of Appeals and the GSIS. Testimonies from knowledgeable individuals and relevant officials from GSIS and Meralco would be invaluable. My understanding of these events is primarily derived from news reports and personal observations, including witnessing an actual dividend payout check prior to President Aquino’s administration. I believe that a detailed investigation will shed light on the true ownership history and ensure transparency and accountability,” he added.
Ultimately, one pressing question remains: Who truly owns Meralco? Is it the Filipino people as contended by the letter-writer? Amid the endorsements and debates, this query cuts to the core of the issue, urging us to uncover the alleged hidden realities behind the power giant’s ownership.