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Scorched Earth, electrifying profits: Not necessarily so in the Philippine power sector
As temperatures soar, so do the fortunes of some energy players. Profits, however, are being held back.
By German de la Paz III, CFA, Ariz Marcelino, and Ginny Pecaña
In the sweltering heat of the Philippine’s hottest months, amplified by El Niño’s searing influence, the country’s energy sector is experiencing a welcome surge of its own. As air conditioners work overtime and fans spin relentlessly, electricity demand has skyrocketed. While some companies celebrate increased revenues, there are factors reining in the optimism.
From Meralco’s soaring sales to the National Grid Corporation’s transmission troubles, the current climate has exposed the strengths and vulnerabilities of various players in the Philippine power sector. As Yellow and Red Alerts flash across the country, the question remains: Is it really a bonanza for power companies?
Dive into our analysis to uncover the real situation in this high-stakes power play.
Sector Update: Fired up or parched down? A look on earnings indications as El Niño fizzled out
Earnings of power sector companies have not been as rosy as expected.
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GERMAN DE LA PAZ III, CFA serves as an Equity Research Lead in the Investment Services Division of Metrobank Trust Banking Group. His coverage includes gaming, telcos, conglomerates, and utilities, as well as select offshore markets. Prior to joining the bank, he spent 9 years at Abacus Securities, starting as a Junior Investment Analyst and working his way up to Senior Investment Analyst. German holds a Bachelor’s degree in Humanities and a master’s degree in Industrial Economics from the University of Asia and the Pacific. Recently, he obtained his CFA charter and is currently pursuing additional industry certifications. In his free time, German enjoys playing sports, particularly basketball, and has a penchant for reading fiction books, watching suspenseful movies, and listening to music.
ARIZ MARCELINO is an Equity Research Analyst in the Investment Services Division of Metrobank Trust Banking Group. His local market coverage includes banks, consumer, and properties. Additionally, he monitors various sectors and investment themes in the offshore space. Previously, he was with the Markets Research Department, focusing on macroeconomic research and sector analysis. Ariz graduated from New Era University with a degree in Banking and Finance and has cleared the CFA Level 1 exam. He is a certified Financial Modelling and Valuation Analyst and a UITF Sales Person. Outside of work, he unwinds by watching popular sitcoms and anime series while enjoying a cup of hot matcha latte.
GINNY PECAÑA is the Head of Investment Services Division at Metrobank’s Trust Banking Group, overseeing markets and equities research, investment analysis, fund selection, portfolio analytics, and trade execution. Ginny has garnered multiple awards for fund management with her decades of banking experience. She holds a Bachelor’s degree in Business Management from the Ateneo de Manila University as well as various finance certifications. On weekends, Ginny plays Mom to two teenage boys and a 10-month-old corgi named Hobie.