The Energy Regulatory Commission (ERC) has ordered Manila Electric Co. (Meralco), the country's largest power distributor, to refund ₱9.5 billion to its customers after finding the utility over-collected from consumers through outdated rates during 2025. The order, dated July 31, 2026, directs Meralco to spread the refund across bills over a six-month implementation period as a separate line item, regulators and multiple news outlets reported on August 2 and 3.
According to the ERC's decision, the exact refund amount is ₱9,506,566,556 — equivalent to an average rate of ₱0.3448 per kilowatt-hour — covering the "true-up" calculation of Meralco's Actual Weighted Average Tariff (AWAT) for January to June 2025 and July to December 2025. ERC chair and CEO Francis Saturnino Juan said implementation would begin in the next billing cycle after Meralco receives the ruling.
How the refund works
Under the ERC's rate-reset framework, a regulated distributor like Meralco must submit projected spending and capital projects for a multi-year period — typically five years — which becomes the basis for the rates passed on to consumers. A "true-up" review then compares what was actually collected against what should have been charged. In this case, the commission found Meralco had over-recovered from customers during the covered period. "Considering that Meralco collected the over-recovery during the regulatory years covered by the lapsed period, the Commission finds it prudent to include the interest cost in the computation of the total refund of Meralco relative to the instant case," the ERC said in its decision, as reported by the Inquirer.
The refund is expected to affect more than 8 million Meralco customers. For a typical residential household consuming around 200 kilowatt-hours a month, the refund translates to a bill reduction of roughly ₱117 over the six-month period, based on a residential refund rate of ₱0.5861 per kWh cited in industry reporting.
Meralco's response
Meralco has publicly backed the ERC-ordered refund program, according to Context.ph and other outlets covering the utility's statement following the order. The company has not disputed the ERC's finding of over-collection or signaled any appeal, though Pulpulitiko was unable to independently verify a detailed public statement from Meralco management beyond confirmation that it will comply with the refund schedule.
Context
The refund arrives as Philippine electricity rates have drawn sustained political scrutiny. In late July, the Senate Energy Committee — chaired by Sen. Erwin Tulfo, with Senate President Sherwin Gatchalian joining the criticism — opened an inquiry into what senators called an "inutile" ERC response to power rates that have pushed the Philippines above Singapore in electricity costs within Southeast Asia. Gatchalian has separately argued that system loss charges should be borne by distribution utilities rather than passed on to consumers. The ERC's own rate-reset and true-up mechanism, which produced this refund, is the same regulatory process senators have said needs closer oversight given the scale of amounts involved. The refund does not resolve the broader rate-level concerns raised in the Senate probe; it only corrects a specific over-collection identified during the 2025 review period.
It remains to be seen whether the ERC or Congress will pursue further true-up findings for other distribution utilities, and whether the six-month refund schedule will proceed without disruption. The ERC has not indicated whether any penalty, beyond the interest already folded into the refund computation, will be imposed on Meralco.
Sources
- Philippine Daily Inquirer, "ERC orders Meralco to refund consumers; amount of refund is P9.5B" — https://newsinfo.inquirer.net/2275602/erc-orders-meralco-to-refund-p9-5b
- GMA News Online, "ERC orders Meralco to refund P9.5B to customers" — https://www.gmanetwork.com/news/money/companies/997067/meralco-refund-9-5-billion-erc/story/
- Philstar.com, "ERC orders P9.5 billion refund for Meralco customers" — https://www.philstar.com/headlines/2026/08/03/2546618/erc-orders-p95-billion-refund-meralco-customers
- BusinessMirror, "ERC to Meralco: Customers entitled to refund of ₱9.5B" — https://businessmirror.com.ph/2026/08/03/erc-to-meralco-customers-entitled-to-refund-of-%E2%82%B19-5b/
- Rappler, "ERC orders Meralco to refund customers P9.5 billion over 6 months" — https://www.rappler.com/business/erc-orders-meralco-refund-customers-six-months/