Meralco hopes to end 2015 with 5% sales growth

MANILA, Philippines - Manila Electric Co. (Meralco) expects to end 2015 with over five percent growth in sales volume compared to a year ago, the highest growth seen by the company, its top official said.

However, the country’s largest power distributor sees softer sales in 2016 due to higher base.

“On a year to date basis, we’ll see 5.3 to 5.4 growth (in sales volume in 2015),” Meralco president Oscar S. Reyes said.

He noted this projection is ahead of the historic growth rate of three to four percent of power sold by the company.

In November in particular, sales volume reached eight percent growth from the same month in 2014.

Reyes said there are a number of factors which have helped drived the electricity sales and demand higher.

“Number one, inflation has been at an all time low, resulting in consumers having a disposable income affecting the purchasing power of customers,” he said. Even businesses, because of the low inflation, the cost of doing business is lower.”

November inflation was at 1.1 percent, up from a record low of 0.4 percent in October.

But while the November rate increased from a record low, year-to-date inflation averaged 1.4 percent, still lower than the 4.3 percent rate from the same period last year.

Reyes also highlighted the higher temperature starting June, which drove stronger demand for electricity.

“It’s very peculiar but from June to November, temperature has been warmer. This is the first time that peak demand happened not within the summer months but in August,” he said.

The company official also stressed the construction of vertical and horizontal housing developments, which add to the number of Meralco customers.

“The fact that banking system in the market has been very liquid, there is so much money available for construction of vertical and horizontal housing units,” Reyes said.

For this year, Meralco has set P18.5 billion core net income target, up from the P18.1 billion core profit earned in 2014.

While sales volume is expected to be at record levels this year, Reyes said sales in 2016 would be softer.

“I think for 2016, we’re still looking at maybe 3 to 3.5 percent especially that you’re working from a high base already,” he said.