Meralco undergoes a changing of the guards

Manila Electric Co. (Meralco) CEO Manuel Lopez is stepping down as head of the largest power distributor passing on the post to businessman Manuel V. Pangilinan. “This is the last time that I'm to address you as your chief executive officer. Immediately after this stockholders meeting, the newly elected board will have its organizational meeting, where I will be stepping down as the chief executive and remain as your chairman effective July 1, 2010," Lopez said during the company's annual stockholders’ meeting Tuesday. For Pangilinan, this signals his continuing dominance of Philippine business. He presently chairs other firms like First Pacific Co. Ltd., First Pacific Tollways Corp. – which handles the North Luzon Expressway – and MediaQuest Holdings Inc., which controls ABC TV-5. In a press conference immediately after the stockholders' meeting, Lopez said it was time for him to move on after serving Meralco for 24 years since the Lopez family – as the rightful owner of the country’s largest power utility – regained the company from the National Power Corp. in 1986. The ownership was recognized by the newly installed administration of then President Corazon C. Aquino. Meralco was first acquired in 1962 by Don Eugenio López Sr. – Manuel’s father – an acquisition that turned the power distribution firm into a Filipino-owned company. But in 1972 strongman Ferdinand Marcos proclaimed martial law and issued Presidential Decree No. 40 which nationalized the electric generation and transmission businesses in the country. Marcos also decreed that the ownership of Meralco be placed under the Meralco Foundation, a shell company controlled by the government-owned National Power Corp. (Napocor). In Tuesday’s press briefing, Lopez explains that starting July 1 he will remain as the chairman while Pangilinan will take over as the Meralco’s president and chief executive. Ramon Ang will be the vice chairman. Lopez said Jose de Jesus will continue as the chief operating officer, Betty Siy-Yap as the chief finance officer, Rafael Andrada as the treasurer, and Simeon Ken Ferrer as their corporate secretary. Pangilinan said he sees no essential change in the policy directions of Meralco. “I want to see [the] preserving [of] what's best of Meralco.... [I will only] change those things that are with respect to Meralco, investing in existing distribution utilities and subsidiaries, but we’re comfortable with our strategies and policies," he said. “I don’t see myself as a permanent chief executive, but I certainly would like to work with Manolo [Manuel Lopez] in a continuing basis and the rest of the senior management team," the incoming CEO said. Lopez said anything concerning power generation is all in the exploratory stage, noting the many proposals on top of their desks. "They're still being evaluated and reviewed by a committee." Meralco expects to make P11 billion in core net income this year from P7 billion last year. In the first quarter, its core net income jumped by 135 percent to P2 billion. Meralco attributed the increase to a higher volume of energy sold and the adjustment in distribution rates, which took effect in May last year. In 2009, Meralco posted a P7-billion net income from P2.6 billion a year earlier owing to the adjustment in distribution rates and a slightly higher volume of energy sold to 4.7 million customers in 2009. Its customers were 4.6 million in 2008. At the end of 2009, Meralco was 43 percent owned by San Miguel Corp., 21 percent by Pangilinan’s Metro Pacific Investment Corp., and 26.7 percent by Philippine Long Distance Telephone Co., the country’s largest telecommunications firm also led by Pangilinan. —Jesse Edep/VS, GMANews.TV