HISTORY

1903 Established as Manila Electric Railroad and Light Company to provide electric light and power and an electric
street railway system to Manila and its suburbs. The facilities that Meralco built to provide these two services
represented for many years the largest single investment of American private capital and know-how in the whole
of East Asia. For a little more than four decades, Meralco provided Manileños their first modern mass public
transportation system with electric streetcars. These were supplemented by buses in the 20s.
1948 World War II destroyed the railway system beyond rehabilitation. Meralco gave up its transportation business,
instead focusing on providing electricity. The electric service powered much of the postwar rehabilitation and early
industrialization of the young republic, which gained independence in 1946.
1961 In a move considered daring at the time, a group of Filipino investors, led by the entrepreneur Eugenio Lopez
Sr., bought Meralco from its American owners, the first major American enterprise to be 'Filipinized.' During the
decade that followed, the new Filipino management built electric-generating and distributing facilities at an
unprecedented pace to meet the burgeoning needs of its franchise area.
Meralco was the first Philippine company to issue mortgage trust indenture bonds successfully in the US financial
market on Wall Street. Meanwhile, an enlightened human resource management regime ensured industrial peace
and employee loyalty at home.
1969 Meralco became the very first billion-peso company in the Philippines. This was all the more remarkable
because much of it had been achieved without recourse to government guarantees.
1970 The Philippine Government made it a state policy for the government to own all major generating facilities.
Meralco sold its generating plants to the National Power Corporation, and electric distribution became its core
business. Indeed, in the first half of the 1980s, Meralco's franchise area tripled in area from 2,678 square
kilometers to 9,337 square kilometers, mainly because provincial consumers preferred the rates and service of
Meralco to every other alternative.
1980 Meralco, upon the request of the government, organized, started up and operated the country's first
elevated light rail transit (LRT) system in Manila between Baclaran and Caloocan. It was reminiscent of the prewar
role of Meralco in the city's streetcar system. At the end of the decade, Meralco turned over the efficiently
functioning system to the government.
1995 More than ever, much of Meralco's management has been directed towards enabling the organization to
react nimbly to the changing structures and environments in which it operates, despite its continuing status as one
of the oldest and biggest Philippine companies. Drives have gone under different names and slogans, e.g, TQM, re-
engineering, Meralco Transformation Program, etc., but they share certain common emphases: customer
satisfaction, world-class efficiency and productivity, performance-driven rewards, good corporate citizenship,
transparent good governance, and process, organizational and human resource development towards these values.
2009 Major stock transactions took place and Meralco partnered with two other giant Philippine conglomerates,
the PLDT and San Miguel groups. These synergistic partnerships not only led to increased business opportunities
and cost reductions, but also to new, expanded and more affordable services.
CUSTOMER SERVICE -Meralco believes that their customers are their reason for being. They are passionate about
knowing and understanding their customers, responding to their needs, and ensuring total customer satisfaction
and loyalty.
PERFORMANCE- Meralco strives to create and enhance value for all their stakeholders (customers, employees,
investors, and communities they serve). They proactively seek and implement opportunities that drive and sustain
higher levels of organizational performance and growth, cost-effectiveness and efficient delivery of services.
Organizational agility, a sense of urgency and creativity are key to achieving these.
MALASAKIT- Meralco’s employees identify themselves with the company; giving total dedication and commitment
to it, exemplified by performing their very best in every endeavor; with great concern for the company, its
resources and its stakeholders: customers, employees, investors and the communities they serve.
MAKABAYAN- The company is committed to making a positive impact in the lives of the Filipino people by
undertaking high-impact initiatives that support and contribute to the economic and social development of the
country.
ADVOCACIES
1. Solar and Net Metering
Meralco is constantly finding new ways to provide renewable energy for our customers and business partners.
2. Our Meralco Foundation
We believe that progress should be inclusive. The One Meralco Foundation is a re-energized approach to
Corporate Social Responsibility and sustainability.
La Electricista- Organized in 1891 and beginning operations in late 1894, La Electricista was the first electric
company to provide electricity to Manila towards the close of the Spanish era.
➢ The Manila Electric Company acquired both La Electricista and the Compañía de los Tranvías de Filipinas, a firm
that ran Manila's horse-drawn tramways which was founded in 1882
PREDECESSOR: La Electricista and Compañía de los Tranvías de Filipinas
➢ Meralco serves Metro Manila, where it is the sole electricity distributor, as well as some nearby provinces, like
Bulacan, Cavite, Laguna, Batangas, Rizal, and Quezon. Bulacan, Cavite, and Rizal are solely served by Meralco,
but on some provinces, it only serves some parts, like in Laguna, Batangas, and Quezon, where most or some
areas are served by electric cooperatives.
Company Perspectives:
Company Philosophy: Service Excellence With Integrity. Company Mission: To Provide Our Customers The Best Value In
Energy, Products And Services. Company Vision: To Be A World-Class Company And The Service Provider Of Choice.
Key Dates:
1892:
La Electricista is founded.
1903:
Charles M. Swift is awarded a franchise to build the Manila electric tramway, founding the Manila Electric Railroad
and Light Company (Meralco).
1904:
Meralco acquires La Electricista.
1919:
Meralco is renamed Manila Electric Company as electricity generation and distribution becomes the main
business area.
1925:
Associated Gas & Electric Co. (AGECO) of the United States acquires Meralco.
1930:
Meralco inaugurates Botocan Hydro Station.
1948:
The company sells off its bus operations, exiting the transportation market.
1950:
The company begins a five-year, P 45 million investment program to restore and expand capacity.
1962:
Eugenio Lopez, Sr., leads the Philippino buyout of Meralco.
1972:
Meralco and other Lopez family businesses are taken away from Lopez after Ferdinand Marco declares martial
law.
1979:
Government-owned Napocor is granted a power generation monopoly, taking over Meralco's power generation
operations.
1986:
The revolution that topples Marco puts into motion the restoration of the Lopez family businesses, including
Meralco.
1990:
Meralco goes public on the Manila stock exchange.
2000:
Meralco forms e-Meralco Ventures to create and invest in Internet and high-technology businesses.
2003:
Meralco is granted a new 25-year franchise for the Manila electrical power distribution market.
Company History:
The Manila Electric Company, or Meralco, is the Philippines' largest distributor of electrical power. The company holds the
power distribution franchise for some 22 cities and 89 municipalities, including the capital city of Manila, as well as for the
cities of San Juan, Las Piñas, Quezon, Malabon, Makati, Caloocan, Pasay, Mandaluyong, Paranaque, and Navotas.
Meralco's 25-year franchise for these markets, awarded in 2003, gives the company control of the energy distribution
services for an area of more than 9.3 thousand square kilometers and a population of more than 19.7 million--one-fourth
of the Philippines' total population. The company boasts a coverage rate of more than 97 percent, the highest in the
country. Each year, Meralco sells more than 23 million megawatt-hours (MWH), with residential and commercial sales
each contributing roughly 35 percent, and industrial sales adding 30 percent. Formerly a power producer, Meralco
purchases its power requirements primarily from government-owned National Power Corporation; since the beginning of
the 2000s, however, the company has begun to purchase electricity from a number of newly established independent
power producers, helping to lower its prices. Meralco also has started to diversify its operations in response to the
deregulation of the Philippines power industry by extending into power generation, industrial construction and engineering,
and other areas, including real estate development, e-commerce, and consultancy services. Meralco is led by Chairman
and CEO Manuel M. Lopez, whose family, through direct and indirect holdings, retains control of some 25 percent of the
company. The Lopez family, one of the country's most prominent, also controls conglomerate Benpres Holdings and other
businesses.
Turn of the Century Beginnings
Electricity came to Manila in 1892 with the founding of La Electricista, which began providing electricity to residential
customers. With the completion of a new power plant in 1895, La Electricista began providing street lighting service to the
city as well. By the beginning of the 1900s, La Electricista boasted some 3,000 customers, as well as its streetlight
business.

In 1903, the young government of the Philippines began accepting bids to operate Manila's electric tramway, as well as
providing electricity to the city and its suburbs. The only bidder proved to be Charles M. Swift, a Detroit-based
businessman, who founded a new company, The Manila Electric Railroad and Light Company, or Meralco, in 1903.
Construction on the tramway began that same year. The following year, Meralco added its first electrical power operations
by acquiring La Electricista. By 1906, the company boasted a yearly power output capacity of some eight million kWh.

Meralco built up a strong public transportation business in the decades leading up to World War II, building a 170-strong
fleet of streetcars into the 1920s, before switching over to buses later in that decade. Yet the company's electric service
grew even more strongly, overtaking its public transportation operations in terms of revenues by 1915. By 1920, the
company's power capacity had grown to 45 million kWh. The company changed its official name to Manila Electric
Company in 1919, although keeping the Meralco corporate name.

In 1925, Meralco, which had been registered in New Jersey, in the United States, was acquired by fast-growing power
conglomerate Associated Gas & Electric Co. (AGECO), which had begun a massive expansion throughout the United
States and Canada. Backed by AGECO, Meralco began acquiring a number of existing utilities in the Philippines, enabling
the company to expand beyond its Manila city center base.
The company originally serviced its enlarged franchise area through small, diesel-powered generators added through
its acquisitions. In the late 1920s, however, Meralco began construction on a new, large-scale power plant, the Botocan
Hydro Station. Completed in 1930, the power plant was one of the region's largest construction projects of the time. The
additional capacity allowed the company to begin hooking up customers throughout the metro Manila area. Meanwhile,
Meralco opened its own retail store in order to sell home appliances--helping to drive demand for more power.
The Philippines government itself responded to the growing demand for electricity by establishing the National Power
Corporation (Napocor), with Meralco signing a contract to purchase the entire output of Napocor's first facility. Meanwhile,
Meralco's own power capacity continued to grow, reaching 184 million kWh by the outbreak of World War II.

Lopez Family Taking Over in the 1960s

The Japanese occupation of the Philippines placed Meralco under the control of the Taiwan Electric Company. By the end
of the war, however, most of the former Meralco operations had been destroyed, along with the rest of Manila. Meanwhile,
Meralco's parent company, AGECO, which had gone bankrupt and had been broken up, for the most part, in the 1930s,
was reorganized under the name General Public Utilities.
Meralco was to remain under American control through the 1950s. In the meantime, as the newly independent Philippines
began reconstructing after the war, Meralco quickly worked to restore electric service, and by 1947 had already topped its
prewar capacity. By the beginning of the 1950s the company had fully restored service to its former metro Manila network,
which included some 39 towns and cities. In the meantime, the company had abandoned its public transportation arm,
selling its bus line to Fortunato Halili in 1948.

Demand for electricity grew strongly in the postwar era. By the early 1950s the company boasted more than 200,000
customers. It also continued to add capacity, adding new power plants in a five-year, P 45 million investment program
started in 1950. The company also benefited from the rapid industrialization of Manila in the postwar era, and by 1958, the
industrial market had become its largest source of revenues.

In 1962, a group of Filipinos, led by Eugenio Lopez, Sr., founded Meralco Securities Corporation (MSC) in order
to acquire Meralco. The Lopez family was by then one of the Philippines' most prominent families, stemming from its
control of the country's sugar sector since the middle of the 19th century. The family, through various holdings, also went
on to become major forces in the Philippines' media sector, owning the ABS-CBN network and the Chronicle newspaper.
Meralco grew strongly under Eugenio Lopez's leadership, adding new power plants to increase capacity as its customer
levels topped 500,000 by 1968. The company also abandoned the former management's reliance on U.S. suppliers for its
infrastructure requirements, and instead began accepting bids from a variety of sources, helping to produce savings while
achieving faster construction times. Meralco also began diversifying, launching Meralco Securities Industrial Corporation
in order to build a petroleum pipeline between Batangas and Manila in 1967, and founding, in 1969, Philippine Electric
Corporation in order to produce line transformers and other electrical equipment. Other expansion moves brought the
company into banking and oil refinery operations.
Fall and Rise in the 1970s-80s
Lopez had supported Ferdinand Marcos in his presidential bids during the 1960s. Yet Lopez, through his media holdings,
had grown increasingly critical of Marcos in the early 1970s. When Marcos declared martial law, the Lopez family was
stripped of its assets, including its control of Meralco. Throughout the rest of the decade, Meralco struggled against a
weakened economy and a series of natural disasters that destroyed a number of its facilities. Then, in 1979, the Marcos
government named Napocor as the country's monopoly electrical power producer. Meralco's power generating assets
were transferred to the state-owned body.

In the meantime, Meralco continued to expand its distribution business, linking up a growing number of towns and cities in
the metro Manila region that had been unable to keep up with the surging demand for electrical power. By the mid-1980s,
Meralco had signed on more than 60 new communities to its grid.

The revolution of 1986 that deposed the Marcos regime and brought Corazon Aquino to the presidency also restored the
Lopez family's former holdings, including Meralco. One of Eugenio Lopez's sons, Manuel, took over as Meralco's
president (and later became chairman and CEO) at this time.

Meralco then took steps to upgrade its network, which had been hit hard during the Marcos era and continued to
experience difficulties in the economic upheavals of the latter half of the 1980s. In 1989, the company launched a large-
scale investment program to upgrade its distribution system. At the same time, Meralco enhanced its customer service
component by restructuring its organization into regional components.

Meralco went public in 1990. By then, however, the company faced a new difficulty. The surge in demand for electrical
power--including a growing number of "pirates"--had overwhelmed the Napocor power generation monopoly. By the early
1990s, the Manila market became subjected to planned blackouts lasting up to eight hours per day and longer.

In response, the Philippines government called for the creation of a new generation of Independent Power Producers
(IPPs), which were then given guaranteed contracts. Meralco joined this new market, backing the creation of First Private
Power Corporation, building a 225 MW plant in Bauang. That plant came on line in 1994, with commercial operations
starting the following year.

Facing Competition in the New Century

By then, plans had been laid for the deregulation of the Philippines' energy market. Although the actual legislation for
deregulation was not enacted until 2001, Meralco began preparing for the coming competition in the early 1990s. In 1994,
Meralco began working with Spain's Union Fenosa, which acquired a 9 percent stake in Meralco, to lead a new
reorganization effort in the mid-1990s. The company also began diversifying its activities in order to reduce its reliance on
electrical power distribution.

One of the company's first diversification efforts came with the creation, in 1994, of the Rockwell Center development
project, on the site of the company's then-dormant Rockwell power station. That operation was created in partnership with
the Lopez family's Benpres Holdings, formed a year earlier. The following year, Meralco joined with Union Fenosa to
launch the IberPacific consulting firm.

The company continued to develop its diversified interests into the turn of the century. In 1997, the company formed a
new unit, Corporate Information Systems, built around its IT services component. In 1999, the company formed Meralco
Energy, which specialized in providing energy-related services to industries and other large-scale energy users. The
following year, the company moved into the e-commerce markets with the formation of e-Meralco Ventures, with the
purpose of launching and investing in Internet and high-technology companies.

Meanwhile, Meralco's core power distribution business continued its growth. By 2001, it had extended its network to
include 20 cities, then added two more cities, for a total of 114 municipalities by the end of 2002. By then, the company
served nearly 4 million registered customers--with a total customer population of some 19 million.

Meralco received new contracts from the Philippines government in 2003, extending its franchise in the metro Manila
market through another 25 years. The company's 100th anniversary celebrations that year were dampened somewhat,
however, by a Philippines Supreme Court judgment ordering the company to pay back overcharges to customers from a
four-year period. Estimates of the potential payback bill ranged up to P 28 billion ($500 million), a price Meralco claimed it
was unable to pay. Indeed, by May 2001, the company, which had seen its request for a fee hike rejected amid a sales
slump, reported a net loss of more than P 2 billion ($38 million) for 2002, prompting members of the government to call
the Lopez family's management of the company into question. Despite this shadow over its anniversary celebration,
Meralco was nonetheless able to look back on its history as a leading player in the development of the Philippines--and
forward in its determination to remain one of the country's leading corporations.

Principal Subsidiaries: Corporate Information Solutions, Inc.; Meralco Industrial Engineering Services Corporation;
Rockwell Land Corporation; Meralco Energy, Inc.; e-Meralco Ventures, Inc.
Principal Competitors: State Power Corporation of China; Huaneng Power International Inc.; SembCorp Industries;
Perusahaan Listrik Negara, PT; Hongkong Electric Holdings Ltd.; Korea Electric Power Corporation.