Manila: Power rates of the Manila Electric Company (Meralco) will increase by PHP0.3428 per kilowatt hour (kWh) this July, driven by higher fuel prices and the one-month maintenance shutdown of Malampaya that started mid-June.

According to Philippines News Agency, Meralco stated in a news release that the generation charge is the main factor for the uptick in their power rate, citing that this rose by PHP0.1800/kWh to PHP9.2504 due to higher fuel prices. The company highlighted that prices in the Wholesale Electricity Spot Market (WESM) surged to PHP8.0337/kWh following the jump in demand in Luzon, reaching a record-high of 14,534MW on May 28, 2026, amid tight supply conditions.

Meralco also noted that transmission and other charges contributed to the increase in power rates by PHP0.0668/kWh. This rise was partly due to the increased use of liquified natural gas (LNG) by Meralco's providers, First Gas/Prime CoreGen, following the unavailability of Malampaya gas, which is exempted from the 12 percent value-added tax (VAT).

Lawrence Fernandez, Meralco's vice president and head of utility economics, expressed optimism during a briefing that generating costs might decrease by August. He cited the expected decline in demand due to lower temperatures and cheaper LNG prices as key factors. Fernandez explained that the LNG supply used by generating companies in recent months was purchased last May or earlier, when rates were high due to the impact of the Middle East crisis.

Fernandez added, "Hopefully for this month, we'll see newer LNG purchases for the power plants, which we hope are lower than the LNG prices that they experienced in prior months. So, we think there's a good chance for generation costs to go down. And this is aside from the expectation that lower demand with the onset of the rainy season will lead to softer spot market prices."