Meralco faces 'triple whammy' if tussle with GSIS remains unresolved

MANILA, Philippines- The Manila Electric Co. faces an impending 'triple whammy' if it is unable to find a middle ground with the Government Services Insurance System on the issue of control over its operations, an analyst said Tuesday. In an interview with GMANews.TV, Astro del Castillo, managing director of First Grade Holdings, said the country's largest power distributor may take a hit on three fronts if the corporate tussle with GSIS continues. First, del Castillo said Meralco will be facing a "management challenge" with the GSIS and other government-appointed directors blocking its operational moves every step of the way. Second, it may face a heightened regulatory challenge, or pressure to bring down its rates from both the public and the government. And lastly, del Castillo said that because of all the uncertainty playing out, Meralco will have to deal with decreasing market sentiment. He said Meralco shares may continue to weaken, even after it has fallen more than 20 percent since the whole issue started in late April. "The key really here is to find a middle ground as soon as possible. The longer this issue takes, the worse it is for Meralco," del Castillo said. The "middle ground" del Castillo explained, would have to be something both Meralco and GSIS thresh out between themselves. "They need to talk about it. They both want good things for the company, so they just need to talk about it," he said. - Patricia de Leon, GMANews.TV