Jun. 18--Rafael Andrada, Meralco treasurer, said that the company has around P2.50-billion worth of loans from banks due this year and another P5 billion to P6 billion by 2013.

Because of this, he said that the company may need to borrow to refinance the said obligations.

"We need to refinance the loans and the timing could be better this year," he said.

Meralco is the country's largest power distribution utility with over 4.6 million customers in the National Capital Region and its outlying provinces.

As of end-March, the utility's debt-to-equity ratio, or its degree of indebtedness using its long term debts, stood at 31 percent from 30 percent in the same period in 2008.

The company's long-term loans stood at P13.75 billion as of the first quarter. Of the amount, about P13.62 billion and P13 million were secured from local and foreign sources, respectively.

The Meralco official said that it would be up to the company's new owners if it would pursue additional borrowings to refinance its maturing obligations.

"Maybe we will borrow but we have to defer [the decision] to the new owners," he said.

The utility is now jointly controlled by the Philippine Long Distance Telephone Co. with the Lopez Group while San Miguel Corp. is the largest minority owner.

For its capital expenditures this year, which is estimated at P8.50 billion, the company is confident it could draw from its own pockets, especially with the increase in its distribution charge of P0.25 per kilowatt-hour under the performance-based regulation (PBR).

"We could meet our capex requirement for the year [without the need to borrow]," Andrada said.

The PBR is a rate setting scheme whereby a utility's rates are determined by the quality of its service to its customers. It also grants a utility a yearly adjustment on its tariffs in consideration of inflation and foreign currency exchange fluctuations as well as its obligations to its franchise area.

The company, whose entry into PBR was approved by the Energy Regulatory Commission in April, said it would earn additional revenues of about P500 million a month from this scheme.

Meralco's shares closed lower Wednesday at P127 per share from P140 per share the previous day.

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