菲律宾电力与水务公用事业 监管噪音，费率减免减弱；系统损耗常见问题解答

研报英文原文证据摘录

J P M O R G A N

Asia Pacific Equity Research

06 August 2026

Philippine Power & Water Utilities

Regulatory noise, fading rate relief; top system loss

FAQs

The President's July 27 call to scrap the power system loss recovery casts a

regulatory overhang over Meralco while also lowering the odds of a timely tariff

reset. In this note, we summarize the key investor discussion points following our

downgrade of Meralco to Neutral last week. Investors agree the overhang could

linger, especially as political posturing rises. We see an ERC resolution amending

the current 5.5% technical system loss cap as the least disruptive path, averting an

EPIRA amendment, while the harsher options do little to bring rates down. Higher

generation charges drove 10% pts. of Meralco's 15% YTD increase in average

retail rates, and scrapping full system loss recovery saves consumers just 6%. For

Aboitiz Power, we see a smaller 5-7% theoretical NIAT hit from disallowed system

loss recovery given its lighter DU exposure (14% of ‘27E NIAT); we retain OW

on its high contracted capacity, favorable growth initiatives (RE, ESS) and PSEi

inclusion catalyst (Feb. 2027). We argue that water utilities are better insulated

from regulatory risk on lower rate hikes than power, near-free raw water and a

lighter share of household budgets; water service reliability through El Niño will

be imperative to avert heightened political scrutiny. We remain Neutral on MWC

on limited DPS growth post M&As and rising debt burden.

Power & Water

Price (05 Aug 26): Php43.00

FAQ #1: How could plans to scrap system loss recovery play out? The

government has set up a special task force to tackle system loss recovery

removal (link), with the Energy Secretary signaling rate relief for customers

within a year (link). Among the potential options to operationalize this, we see

an ERC resolution amending the current 5.5% technical system loss cap as the

least disruptive, as it averts an EPIRA amendment. Other options include: (1)

spreading the system loss burden across the power value chain, (2) folding

system loss into the distribution tariff as an embedded expense, or (3) limiting

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