ByAlexandria Grace C. Magno,Reporter
MARKET ANALYSTS said investors will be looking for clarity on the administration’s proposed reforms and implementation plans following President Ferdinand R. Marcos, Jr.’s State of the Nation Address (SONA), particularly across the energy, infrastructure, and capital market sectors.
Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said the SONA reaffirmed that infrastructure, energy security, and digitalization remain at the center of the administration’s economic agenda, with the power sector expected to closely monitor the next steps.
He said the proposed amendments to Republic Act No. 9136, or the Electric Power Industry Reform Act (EPIRA) of 2001, particularly the removal of system loss charges, were among the address’ most significant policy proposals because of their potential implications for regulated utilities and electricity pricing.
“The legislative details will matter far more than the announcement itself,” Mr. Arce said in a Viber message.
He said distribution utilities, power generation companies, and investors would be seeking clarity on how system loss charges would be treated, whether the reforms would distinguish between technical and non-technical losses, and how utilities would continue recovering legitimate operating costs.
Last week, energy stakeholders backed the president’s call to amend the 25-year-old EPIRA but cautioned against removing system loss charges from consumers’ electricity bills without first determining how the costs would be recovered.
Listed Manila Electric Co. (Meralco), the country’s largest private electric distribution utility, said it is willing to participate in discussions on the proposed amendments to the law. However, it urged lawmakers to consider the impact of removing system loss charges, saying such losses are “inherent” in operating an electric distribution system.
The Philippine Rural Electric Cooperatives Association, Inc. (PHILRECA), which represents 121 electric cooperatives nationwide, said it could support the removal of system loss charges only if the National Government directly shoulders the costs through a dedicated subsidy mechanism.
System loss charges form part of the generation and transmission costs paid to power producers and the grid operator. They cover electricity losses arising from technical and non-technical factors, including illegal connections.
Under EPIRA and implementing guidelines issued in 2017, private distribution utilities may recover system loss charges of up to 5.5%, while electric cooperatives may recover up to 8.25%. Any losses beyond those limits are absorbed by the utilities.
Beyond the power sector, Mr. Arce said the administration’s continued focus on transport and connectivity projects signals policy continuity rather than a shift in direction.
He said listed property developers, construction companies, and conglomerates stand to benefit if infrastructure investment remains a national priority, with continued spending on logistics, transport, and energy supporting long-term industrial expansion.
Mr. Arce also said he had expected a more comprehensive discussion on capital market development and investment competitiveness.
Although the Philippines has made progress in improving market regulations and attracting investments, as highlighted in the SONA, he said the local stock market continues to face relatively low liquidity and limited foreign participation.
“A clearer roadmap on deepening capital markets, encouraging more listings, strengthening institutional investing, or broadening investor participation would have been well received by listed companies and market participants,” he said.
He added that investors would also welcome greater policy direction on manufacturing and export competitiveness, particularly for semiconductors, electronics, artificial intelligence, and other advanced industries.
“The renewable energy sector is likewise looking for continued policy execution rather than new policy direction. Investors will be watching for faster permitting, transmission expansion, improved grid integration, and measures that facilitate battery storage and other technologies needed to support higher renewable penetration,” Mr. Arce said.
He added that industrial estate developers, utilities, telecommunications companies, and infrastructure operators are seeking greater visibility on implementation timelines, power infrastructure, investment incentives, and regulatory coordination as the government seeks to attract technology-intensive industries.
“At this stage, the market is less concerned about new announcements than about the government’s ability to execute existing priorities efficiently and consistently.”
Meanwhile, Investment & Capital Corp. of the Philippines President and Chief Operating Officer Jesus Mariano P. Ocampo said he had hoped for a stronger anti-corruption message during the SONA.
“Was really hoping for something more “forceful” on his addressing corruption,” he said in a Viber message.
Mr. Ocampo also cited energy self-sufficiency as one of the address’ notable themes, saying the administration’s emphasis on the issue appeared to point to nuclear energy as one option to reduce the country’s dependence on imported oil.
He also said developments related to the government’s efforts to attract electric vehicle manufacturers to the Philippines would be worth watching.
“Groups seem to have the common impression that it is really the same old, same old… Until we see a conviction and actual jailing,” Mr. Ocampo said.
Meralco’s controlling shareholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest inBusinessWorldthrough the Philippine Star Group, which it controls.
