After two consecutive months of declining electricity rates, the Manila Electric Company (Meralco) has announced a power rate hike of P0.4883 per kilowatt-hour (kWh) for July. This brings the overall electricity rate for a typical household from P12.1552 to P12.6435 per kWh, equivalent to a roughly P98 increase for customers consuming 200 kWh.
Main driver: rising generation charges
The biggest factor behind the rate increase is the generation charge, which rose by P0.3407 per kWh. Two major sources of electricity—Power Supply Agreements (PSAs) and Independent Power Producers (IPPs)—saw significant cost increases of P0.4476 and P0.4992 per kWh, respectively.
Meralco attributed the spike to higher global fuel prices, triggered by the Israel-Iran conflict, and the continued weakening of the Philippine Peso. The depreciation of the Peso to its lowest level since March 2025 intensified the impact, especially since 58 percent of PSA charges and 99 percent of IPP costs are dollar-denominated.
Offsetting some of the generation cost increase was a P0.1703 per kWh reduction in charges from the Wholesale Electricity Spot Market (WESM). Improved supply conditions in the Luzon grid during June, driven by a 770 megawatt drop in average demand, outweighed the effects of a 490 megawatt increase in plant outages.
For the June supply period, PSAs contributed 56 percent of Meralco’s energy requirement, while IPPs provided 28 percent and WESM accounted for 16 percent.
Transmission charges also rise
Also contributing to the overall increase was the transmission charge, which climbed by P0.0734 per kWh due to higher costs from the Reserve Market.
Other charges, such as taxes and universal fees, added a net increase of P0.0742 per kWh.
Meralco emphasized that generation and transmission costs are pass-through charges paid directly to power suppliers and the grid operator, while taxes and other regulatory charges are remitted to the government.
Distribution charges remain unchanged
Meralco’s distribution charge remains unchanged and has not moved since the P0.0360 per kWh reduction that took effect in August 2022. In addition, customers continue to benefit from a distribution-related true-up adjustment that reduces bills by P0.2024 per kWh.
Electrical safety reminder
With the rainy season underway, Meralco reminded customers to take necessary precautions to avoid electrical accidents, especially in areas prone to flooding. Customers are advised to switch off the main circuit breaker if water enters their home, ensure their hands are dry when handling electrical equipment, and have soaked outlets or appliances inspected by a licensed electrician before use.
Meralco also encouraged customers to keep their communication devices fully charged and to report any power-related concerns through the My Meralco app, official social media accounts, text lines (0920-9716211 or 0917-5516211), or the Meralco Hotline at 16211.
