S&P views Manila Electric positively

S&P said it revised its outlook for Manila Electric Co. (Meralco) to positive from stable and affirmed its BBB- issuer rating.

“Meralco will have headroom to our current rating trigger over the next 12-24 months, despite sizable capital expenditure (capex) and investments. We forecast the company to maintain a healthy ratio of funds from operations (FFO) to debt of 33%-40% over the next two years, above our 30% upside trigger. We expect Meralco to generate steady cash flow from its distribution business, as well as a material earnings recovery in its unregulated power generation business,” the agency said in a statement.

S&P said it estimates Meralco's adjusted EBITDA could grow to Philippine peso (PHP) 78 billion-PHP 81 billion in 2023-2024, from PHP 66 billion in 2022.

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