MAYBANK INVEST ASEAN

SINGAPORE 2018

March 28, 2018

Ritz Carlton Hotel, Singapore

MANILA ELECTRIC COMPANY

(Meralco)

CAUTIONARY STATEMENT

This presentation is prepared for the parties presently invited for the purpose of discussion. This presentation has consequential limitations and is not a comprehensive discussion about MANILA ELECTRIC COMPANY AND ITS SUBSIDIARIES (Meralco). These materials are restricted to the participants and may only be used in conjunction with the meeting held on such date.

The information contained herein should not be quoted in whole or in part without prior consent of Meralco. No responsibility to any third party is accepted as the presentation has not been prepared for any other purpose.

Accordingly, Meralco makes no representation or assurance that any projected result made by the recipient of the information will be realized. Investors should not place undue reliance on these information though presumed correct at the time of the presentation. These information are exposed to various risks, competitive uncertainties and contingencies which are beyond Meralco’s control.

3MERALCO’s Franchise Area

*Land area estimates change over time due to changes in legislation that affect boundaries, names, status and

number of existing geographical / political units.

Renewed 25-year Congressional franchise (up to June 2028)

Meralco’s footprint covers 9,685 km2

3% of the Philippine land area

36 cities and 75 municipalities

Meralco powers more than 6.3 million customers

Home to approximately 27% of the Philippine population

Serves businesses and industries generating 50% of GDP

Energy sales account for 55% of the entire country

4

MVP Group

45.96%

JG Summit Group

29.56%

First Philippine Holdings Corporation

24.98%

Other Shareholders and Investors

Institutional Investors and Public Float

21.03%

3.95%

Ownership Structure

5One Meralco Positioning

Engineering, Procurement,Construction, & Maintenance

Bills and PaymentCollection

Beyond-the-MeterEnergy Services

Transmission

₱

Engineering, Construction, &Maintenance (Mass Transit)

Telecoms(Connectivity)

Generation

ENERGY VALUE CHAIN

SUPPORT SUBS ASSET-LEVERAGING SUBS

DISTRIBUTION Retail Supplier

Clarion

6

27,516

30,247

30,592

32,771 34,084

35,160

37,124

40,142

42,102

2009 2010 2011 2012 2013 2014 2015 2016 2017

COMMERCIAL

39.4%16,597 GWh

INDUSTRIAL

29.2%12,309 GWh

RESIDENTIAL

31.0%13,060 GWh

Flat Streetlights account for 0.3%, 136GWh

• Increase in inorganic and new/ramp-up sales

•Real estate• Private Services•Retail Trade

• Electrical Mach• Food & Beverage• Basic Materials

5.5%CAGR (‘09-’17)

4.9% ∆

Energy Sales (in GWh)

7

Sources: 2015 YE Briefing, 2013, 2014, and 2015 Annual Report, 2016 Q3 Briefing

4.70

4.85

5.02

5.19

5.37

5.57

5.78

6.04

6.33

2009 2010 2011 2012 2013 2014 2015 2016 2017

COMMERCIAL

7.9%499,567customers

INDUSTRIAL

0.2%10,327

customers

RESIDENTIAL

91.9%5,812,069customers

Flat Streetlights account for 0.1%, 4,728 customers

3.8%CAGR (‘09-’17)

4.8% ∆

Customer Count (in Millions)

8Peak Demand (in MW)

5,928

6,1216,298

6,748

6,973

2013 '14 '15 16 2017

8,3058,717 8,928

9,72610,054

2013 '14 '15 16 2017

3.3%�

CAGR: 4.1%

CAGR: 4.9%

MERALCO

Luzon

3.4%�

*

**

* June 14, 2017

**May 9, 2017

6974

8792 96

2013 '14 '15 16 2017

4.3%�

CAGR: 8.6%

CEDC***

*** May 4, 2017

912-MMA System Loss Performance (in %)

System loss cap

Meralco system loss

CEDC system loss

8.61

7.94

7.35 7.04 6.92

6.49 6.47 6.35

5.91

9.50

8.50 8.50

7.50 7.25

7.00

6.50

3.86 3.81 3.963.75

4.33 4.374.01

3.59

2.14

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

10

8.949.14

9.649.44 9.42

8.26

7.50

8.03

2010 2011 2012 2013 2014 2015 2016 2017

GenerationCharge

54.8%

Transmission Charge

9.7%

Meralco

17.7%

Taxes,UniversalCharge

11.9%

System Loss Charge

3.9%FIT-All

2.0%

7.1%�

Average Retail Rates (PhP/kWh)

11Financial Highlights

(In Million PhP, Except Per Share Data and

Percentage)2013 2014 2015 2016 2017

Core Income 17,023 18,128 18,887 19,583 20,213

Reported Income 17,211 18,053 19,098 19,176 20,384

EBITDA 30,682 32,927 31,124 34,049 34,474

EBITDA Margin 10% 12% 12% 13% 12%

Net Income Margin 6% 7% 7% 7% 7%

Cash & Cash Equivalents1 59,847 69,469 50,840 46,656 45,937

Interest-bearing Debt 33,591 30,042 30,308 40,347 40,256

Capital Expenditures 10,187 12,582 11,303 11,584 12,127

Dividends to Core

Per Share 12.08 14.47 16.76 13.91 12.55

% 80% 90% 100% 80% 70%

Dividends Declared

During the Year10.20 12.36 15.25 25.08 18.23

Stock Price 251.00 256.00 320.00 265.00 328.60

Dividend Yield 4% 5% 5% 9% 6%

1Excludes AFS/HTM INVESTMENTS and other cash placements of PhP45,309 million in 2017 and PhP46,533 million in 2016, which are included under

OTHER NONCURRENT ASSETS and OTHER CURRENT ASSETS

12Financial Performance

(in Million PhP)

December 31

% Δ2016 2017

Electric 249,206 275,172 10

Non-electric 7,975 7,384 (7)

Total Revenues 257,181 282,556 10

Purchased power (189,853) (214,558) 13

Operating expenses (41,620) (41,620) -

Other income 1,392 1,310 (6)

Provision for income tax (7,353) (7,360) -

Non-controlling interests (164) (115) (30)

Core Income 19,583 20,213 3

Non-core income (expense) (407) 171 142

Reported Net Income 19,176 20,384 6

13

December 31

(in Million PhP,

except ratios)2016 2017 % ∆

Cash and cash

equivalents2 46,656 45,937 (2)

Total debt 40,347 40,256 -

Net debt (6,309) (5,681) (10)

Debt/EBITDA 1.18 1.17 (1)

Net Debt/EBITDA (0.19) (0.16) (16)

Gearing ratio (0.08) (0.08) -

Key Financial Information

LONG-TERM DEBT MATURITY PROFILE1

(in Million PhP)

1Includes long-term debt of subsidiaries amounting to PhP683 million

2 Excludes AFS/HTM INVESTMENTS and other cash placements of PhP45,309 million in 2017 and PhP46,533 million in 2016, which are included under

OTHER NONCURRENT ASSETS and OTHER CURRENT ASSETS

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

414 414

11,914

402 390 390

4,050

7,090

120 120

14Core Earnings and Cash Dividends Per Share (in PhP)

15

-

5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

400

450

31-Dec-07 31-Dec-08 31-Dec-09 31-Dec-10 31-Dec-11 31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17

Vo

lum

e I

n M

illi

on

s

Ph

p P

rice

Pe

r S

ha

re

Share Price

Market Statistics*(in PhP, Except Otherwise Indicated)

Stock Price 328.60

52-week high 328.60

52-week low 254.00

Par Value 10.00

Market Cap (in Million PhP) P370,365

No. of Outstanding Shares (in Millions) 1,127

*as at December 31, 2017

10-Year Share Price and Volume Chart

Meralco - Volume

Meralco - Share Price

PSE index

Closing Price as of March 23, 2018: PhP 325.00

16Share Price

in Php/share

PHP 366 B

Market Cap*

205.00

228.00

247.20

260.60251.00

256.00

320.00

265.00

328.60325.00*

‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18

Meralco is consistently in the Top 20 Most Valuable Company in the Philippines based on Market Cap

*As of 3/23/2018

Regulatory

18

ERC Chairperson

Agnes Vicenta Salayo Torres – DevanaderaBorn: 5 April 1950

Date of Appointment: 22 November 2017Officially assumed office: 04 December 2017 Term Expires: 10 July 2022

• Career Highlights

o Senior partner of the Libarios, Jalandoni, Devanadera and Dimayuga law firm.

o Mayor of Sampaloc, Quezon from 1988 to 1998.

o Appointed Undersecretary for Legal and Legislative Affairs - Department of Interior and Local Government (DILG) from April 2003 to August 2004.

o Appointed as Department of Justice's (DOJ) Undersecretary under Secretary Simeon A. Datumanong.

o Appointed as DOJ officer-in-charge on September 1, 2007, and as acting secretary of the DOJ on September 3, 2007

to November 15, 2007 (during the medical leave of former Justice Secretary Raul Gonzalez)

o The 41st and first woman Philippine Solicitor General duly appointed on February 22, 2007 by President Gloria Macapagal – Arroyo. She assumed office on March 2, 2007 until 2009.

o Appointed as Secretary of Justice from January 12, 2010 to March 8, 2010.

19Rate-setting Framework

Through the PBR framework, Meralco is able to ensure return on capital and return of capital, support for operating and

maintenance expenses and applicable recoverable taxes, and maintain responsiveness to market forces affecting operations.

Performance-based Regulation of Distribution

Charges

• Meralco’s distribution charges are governed by the

PBR framework.

• PBR employs a rewards/penalties mechanism for the

distribution utility (DU) based on its network and

service performance.

Return on Capital

(Regulatory Asset Base x WACC)

Return of Capital

(Depreciation)

Corporate Income Tax

Other Taxes

Operating and Maintenance

Expenditures

Annual Revenue Requirements

Building Blocks

Annual Revenue

Requirements

(ARR)

Price Cap

Calculation

Maximum Average

Price

(MAP)

Rate DesignRates per Customer

Class

With inputs on sales

volume, inflation

and foreign

exchange

With charges

in per kWh,

per kW and

per customer

Performance-based

Regulatory Framework

Rate Setting Under PBR

• DUs file their Reset Application with its proposed capital

expenditures, rates and performance targets.

• After expository/formal hearings and public consultations, the ERC

releases a Draft Determination then a Final Determination.

Rate Setting for electricity distribution involves a consultative process

between the regulator (ERC) and stakeholders, which include

distribution utilities, consumers, etc.

Reset: Every Regulatory Period Consisting of 4 Regulatory Years

• ERC verifies the MAP annually, checking forecast deviations from

the Final Determination and adjusting these accordingly.

• ERC also reckons a performance reward or penalty and a revenue

over- or under-recovery correction.

Rate Verification: Every Regulatory Year After Reset

20MERALCO Rate Rebasing Update

To be determined in a reset

21Update on the 4th Regulatory Period (4RP) Reset/Rebasing

� 2013 Oct 14: ERC posting of PBR Issues Paper for comments� Public consultations were held in Jan and Mar 2014

� Focus group discussions were held in Apr and May 2014

� 2016 Apr 18: ERC posting of draft of PBR rules for comments� Draft Rules for Distribution Wheeling Rates (RDWR)

� Draft Position Paper for the 4RP of the First Entry Group

� Draft Commission Resolution on Issues of Implementation

� 2016 Nov 8: ERC posting of final PBR rules� Finalized RDWR, Position Paper and Commission Resolution

� ERC Resolution 25 of 2016 (dated July 12, 2016)� Approving and adopting the RDWR

� Effective immediately after newspaper publication

� Copies to be provided to UP Law Center-ONAR, all private DUs, PEPOA and TRANSCO

� On publication of Resolution 25 and RDWR� 2016 Nov 11: ERC letter to DUs on publication of Resolution 25 and RDWR

� 2016 Nov 23: Meralco letter to ERC on RDWR publication issues

� 2016 Dec 22: ERC letter to Meralco in response to publication issues

� On deferral of the reset process until resolution of MSK petition� 2017 Jan 6: Meralco letter to ERC to defer reset process until resolution of MSK petition

� 2017 Feb 9: Meralco filed initial comments on the draft Regulatory Asset Base (RAB) roll-forward handbook and reiterated request to defer finalization of RAB handbook pending the resolution of the MSK petition

� 2017 Mar 24: ERC letter to Meralco in response to request for deferral

� 2017 Apr 4: Meralco letter to ERC raising substantive issues on RDWR

� 2017 Apr 12: Meralco letter to ERC requesting for meeting on the substantive issues

� 2017 Oct 2: ERC letter to Meralco granting request for meeting on PBR and setting meeting on 25 Oct

� 2017 Oct 23: Meralco letter to ERC to postpone meeting to give Meralco and PEPOA more time to meet and coordinate

Rules have not yet been published as of today

22

23Related Developments on PBR Rule-making

A. Matuwid na Singil sa Kuryente Alliance (“MSK”) vs. PBR

• 22 DEC 2015: MSK filed a petition for rule change vs. PBR based on the following

grounds:

1. PBR leads to unreasonable prices

2. PBR is infirm and illegal since it is against public interest

3. Use of forecasted and “not yet incurred” investments leads to overcharging

4. Padding of various expenditures was shown in expert report

• 17, 22, and 24 MAR 2017: Public consultations in Manila, Cebu & Davao

• 10 APR, 15 MAY, 21 JUN 2017: Public consultations in Manila

• Next schedule still to be set by ERC

B. Regulatory Asset Base (RAB) roll-forward handbook

• 21 NOV 2016: ERC ordered for a 09 Jan 2017 public consultation on the draft RAB

handbook

• 19 DEC 2016: Meralco manifested to defer RAB handbook proceedings until

resolution of the MSK petition

• 09 JAN 2017: ERC conducted public consultation and extended submission of

comments until 09 Feb 2017

• 09 FEB 2017: Meralco filed initial comments pending the resolution of the MSK

petition

24MERALCO CAPEX Program (in Billion PhP)

• PhP 0.583 Bn of PhP 0.64B Bn deferred portion of RY2016 CAPEX was re-filed as Emergency Projects; Additional filings (Offcycle/Emergency): PhP 1.758B – Customer Information System,

Php 0.055B – MVA Transformer at North Port Substation; MVA Transformer at Balintawak Substation – P 0.057B; MVA Transformer at Urdaneta Substation – P 0.060B

• On February 18 and December 29, 2016, CEDC filed with the ERC its proposed capital expenditure program amounting to PhP913 million for RY2016 and PhP446 million for RY2017,

respectively. CEDC has received an approval from the ERC to implement its Pesos 198 million Roxas Substation project, which was energized in September 2017, and is awaiting the ERC’s

decision on the balance of its CAPEX filing

Total 17.71Total 15.41

Total 15.46 Total 8.75

Total 18.80

Pending Approval

of RY2018

New System Loss Caps

26

� On February 23, 2018, ERC posted in its website its Rules for Setting the Distribution System

Loss (DSL) Cap and Establishing Performance Incentive Scheme for Distribution Efficiency.

The Rules allows for a gradual reduction of Feeder System (Primary and Secondary

Distribution System) Loss caps as follows:

Year of

ImplementationEC Cluster 1 EC Cluster 2 EC Cluster 3

Cluster 4

(PDUs)

2018 12.00% 12.00% 12.00% 6.50%

2019 12.00% 11.00% 11.00% 6.25%

2020 12.00% 10.25% 10.00% 6.00%

2021 12.00% 10.25% 9.00% 5.50%

2022 and onwards 12.00% 10.25% 8.25%4.75%

(if no annual submission

of feeder data)

� Sutransmission and substation loss is fully recoverable. However, if DUs do not submit

monthly metered subtransmission and substation distribution loss data, such losses, as well

as distribution feeder losses, will be set to 0.00 in the computation of the recoverable system

loss charge.

� The DU may also elect for an individualized DSL cap.

NEW System Loss Caps

Retail Competition and Open Access

28

Under SC TRO:

- Mandatory Contestability of 1MW and up contestable customers

- Voluntary Contestability of 750-999kW contestable customers

- Market restrictions

Retail Competition and Open AccessERC’s restrictions on the Market (published May 2016)

1.Mandatory contestability

2.No distribution utility shall engage in the Supply of

Electricity to End-users in the Contestable Market unless

such supply is made in its capacity as a Supplier of Last

Resort

3.All Local Retail Electricity Suppliers shall wind down their

business within three years

4.No RES shall be allowed to supply more than 30% of the

total average monthly peak demand of all contestable

customers

5.No RES shall be allowed to transact more than 50% of the

total energy transactions of its supply business, with its

affiliate Contestable customers

•MERALCO considers these restrictions contrary to EPIRA and

certain provisions of the constitution.

•MERALCO and other industry players have challenged these

restrictions in court and the case is currently on-going.

•MERALCO's decision to apply for affiliate RES license is

without prejudice to the final resolution of the main case.

Contestable

MarketVoluntary Participation

1 MW and

aboveJune 26, 2013 onwards

750-999 kWJune 26, 2016 – February 26, 2017*

December 26, 2017 up to present**

* SC TRO suspended ERC Resolution No. 28, Series of 2016

** Resumed under DOE Circular No. DC2017-12-0013

29

• Contestability is voluntary. A qualified contestable customer can opt to remain with the DU’s

regulated supply.

o As of January 2018, there are 1,686 contestable customers

• All Local Retail Electricity Suppliers (Local RES) may offer retail supply to contestable customers and

need not wind down operations

o As of January 2018, there are 25 Local RES and 30 licensed RES

• No more retail market caps

• No more term limit on retail supply contracts

1 MW & up

72%1,208 customers

750 kW – 999 kW

24%400 customers

RCOA Developments – Implications of the Supreme Court Temporary Restraining Order

Source: http://www.buyyourelectricity.com.ph/

Luzon, 1,485 ,

89%

Visayas, 190,

11%

With RSC (1

MW and up),

882, 52%Still with the

DU service (1

MW and up),

326, 19%

With RSC (750-

999kW), 78, 5%

Still with the DU

service (750-999kW),

322, 19%

Government Entities

(750kW and up), 78, 5%

30

Source: Competitive Retail Electricity Market Monthly Statistical Data (as of January 2018)

www.buyyourelectricity.com.ph

28%271 MPower

customers

2%15 Vantage

customers

70%674 customers

Contestable Customers with Retail Supply Contracts with MPowerand Vantage

MPower Vantage Energy Other RESs

How many of the Contestable Customers with RSC are MPower (LRES) and Vantage (RES) customers?

As of January 2018

31Total Retail Market Demand from Qualified Customers

*This list include only the ACTIVE RESs or RESs serving at least one customer

Source: Competitive Retail Electricity Market Monthly Statistical Data (as of January 2018)

www.buyyourelectricity.com.ph

Contestable Demand

Still with DU

39%

Aboitiz Group

13%

Ayala Group

5%

San Miguel Group

5%

MERALCO

20%

Phinma Energy Group

8%

First Gen Energy

Solutions

2%

Team (Phils.) Energy

Corp.

3%

Global Energy Supply

Corporation

3%Others

2%

RES Market Share of Total Contestable Demand (January 2018)

32

DOE issued two Circulars on RCOA to address concerns regarding the SC TRO

• November 29, 2017

DOE issued two Circulars to provide immediate guidance to affected power industry entities, which sought clarification on the implications and effects of the TRO

• December 24, 2017

The Circulars took effect fifteen days after their publication in at least two newspapers* of general circulation last December 9

*The Philippine Daily Inquirer and The Manila Times

33

The Circulars repeal certain sections of previous DOE issuances

On Prohibiting the DU to engage in the Supply Business beyond its Captive Customers

Repealed by DOE Circular No. DC2017-12-0014

• Section 5(h) of DOE Circular No. DC2015-06-0010

On Mandatory Contestability and Timetable for Full Implementation of RCOA

Repealed by DOE Circular No. DC2017-12-0013

• Section 4 of DOE Circular No. DC2012-05-0005

• Section 7 of DOE Circular No. DC2012-11-0010

• Sections 1 and 2 of DOE Circular No. DC2015-06-0010; and

• DOE Circular No. DC2016-04-0004

34DOE Circular No. DC2017-12-0013

Providing Policies on the Implementation of Retail Competition and Open Access (RCOA) for Contestable Customers in the Philippines Electric Power Industry

• ERC shall promulgate the supporting guidelines, including but not limited to, Retail Aggregation.

• The DOE and the ERC shall annually review and issue policies, rules and regulations to achieve the full implementation of RCOA until it reaches the household demand level.

Date Who may voluntary participate in the contestable market?

Upon

effectivity of the Circular

Electricity end-users with a monthly average peak demand of 750kW and above for the preceding twelve months

26 June 2018*

Electricity end-users with a monthly average peak demand of 500kW to 749kW for the preceding twelve months

26

December 2018*

Electricity end-users with within a contiguous area whose

aggregate average peak demand is not less than 500kW for the preceding 12-month period.

They may voluntarily enter into a retail supply contract with Aggregators.

Aggregator refers to a person or entity, engaged in

consolidating electric power demand of End-Users in the

Contestable Market, for the purpose of purchasing and

reselling electricity on a group basis.

* ERC may specify an earlier date

35DOE Circular No. DC2017-12-0014

Providing Policies on the Implementation of Retail Competition and Open Access (RCOA) for Retail Electricity Suppliers (RES) in the Philippines Electric Power Industry

• These entities shall secure a RES license from ERC:

oA Generation Company or Affiliate thereof

oAn Affiliate of a Distribution Utility

oRetail Aggregators

oAn IPP administrator

oAny Prospective Generation Company (has a power generation project that is undergoing construction or that is planned to be constructed which project is included in the DOE’s Power Development Plan (PDP) as committed power project)

oAny other Person authorized by the ERC to engage in the selling, brokering, or marketing of electricity to the Contestable Market, consistent with the EPIRA and its implementing rules and regulations

• Distribution Utilities may provide electricity services to contestable customers within its franchise area as a Local RES, upon authorization from the ERC.

• ERC shall promulgate the supporting guidelines, including but not limited to, the licensing of the RES.

Luzon Demand-Supply Situation

37

In the last 5 years, although capacity appears adequate, demand growth in Luzon outpaced additional capacity from new power plants.

4,531 4,219

824 587

2,861 2,759

2,462 2,147

1,778

1,586

72

52

7,178

1,581

I N S T A L L E D D E P E N D A B L E D E M A N D

2 0 1 2 POW ER S IT U A T ION

Coal Geo Nat Gas Hydro Oil Biomass, Solar, Wind Demand Req. Reserve

5,625 5,404

843 782

3,446 3,291

2,515 2,340

2,178 1,715

786

624

10,054

1,696

I N S T A L L E D D E P E N D A B L E D E M A N D

2 0 1 7 POW ER S IT U A T ION

Coal Geo Nat Gas Hydro Oil Biomass, Solar, Wind Demand Req. Reserve

12,528 MW11,350 MW

15,392 MW14,157 MW

Source: DOE Power Statistics and List of Existing Power Plants

Variable

RE

Rainfall

dependent

• From 2012 to 2017, Luzon demand grew by 2,876 MW, while additional generation

capacity was only at 2,864 MW

• About 3,300 MW or 21% of Luzon capacity is variable RE and rainfall dependent

38

About 72% of installed capacity in Luzon has been operating for more than 15 years. 21% of installed capacity operating for less than 5 years includes variable wind and solar.

20%

1%

18%

33%

7%

0%

21%

ESTIMATED AGE OF INSTALLED CAPACITY IN LUZON

> 30 years

25 to < 30 years

20 to < 25 years

15 to < 20 years

10 to < 15 years

5 to < 10 years

< 5 yearsHydro, Coal,

Nat Gas

Hydro, Coal, Nat

Gas, Wind

Hydro, Coal, Nat Gas, Geo, Wind,

Biomass, Solar Geo, Hydro,

Coal, Oil

Hydro, Oil

Geo, Hydro,

Coal, Oil

Hydro, Biomass

Source: DOE list of existing plants as of 31Dec2017

39

Frequent plant outages amidst strong and steady demand growth have led to 10 Yellow Alerts in 2017, 5 occurred in September

No. of Yellow Alerts

in Luzon

Jan2017 0

Feb2017 0

Mar2017 1

Apr2017 2

May2017 0

Jun2017 0

Jul2017 0

Aug2017 1

Sep2017 5

Oct2017 1

Nov2017 0

Dec2017 0

Date Reasons for Luzon Yellow Alerts in September 2017

9/9/2017

10am-3pm

Insufficient operating reserve brought about the outage of the following:

a. Sual 1 (out since 9/7/17 due to boiler tube leak)

b. Outage of GN Power 1 & 2 (tripped out earlier at 0238H & 0241H due to still undetermined cause)

c. San Gabriel (out since 9/7/17 due to feed water pump trouble)

9/16/2017

10am-3pm

Insufficient operating reserve brought about by the outage of the following:

a. Outage of Sual 1 & Masinloc 2 (out since 9/15/17 due to boiler tube leak)

b. Outage of GN Power 2 & 1 (tripped out earlier at 0840H & 0912H due to still undetermined cause)

9/22/2017

10am-4pm

Insufficient operating reserve brought about by outage of the following:

a. GN Power 1 (316 MW) since 9/18/17 due to mill trouble

b. At 1602H (9/21/17), Kalayaan 2 tripped out due to undetermined cause

c. At 0029H, Calaca 2 tripped out due to tripping of circulating water pump A

d. Pagbilao 2 (382 MW) - since 9/21/17 for planned outage

e. San Lorenzo Module 50 (263 MW) - since 9/21/17 for scheduled outage

f. Kalayaan 3 & 4 (180 MW each) - due to penstock trouble

9/28/2017

10am-3pmInsufficient operating reserve brought about by outage of Limay 7 & high forecasted system demand

9/29/2017

10am-3pmInsufficient operating reserve brought about by outage of San Gabriel

• A Red Alert Notice was issued by NGCP on 10Apr2017 due to high actual system demand and delayed synchronization of GN Power 1

and Malaya 1

Yellow Alert – “A notice issued by the System Operator when the Primary Reserve is less than the

capacity of the largest Synchronized Generating Unit or power import from a single interconnection,

whichever is higher. ” (Philippine Grid Code 2016)

40

Insufficiency of reserves have led to actuation of ALDs even during off-peak hours. Out of the 32 ALDs this year, 7 occurred in September 2017

Date / Time Cause of ALDs in September 2017Time

Restored

9/4/17, 11:30am GN Power U1 (300 MW) tripped out due to still undetermined cause 11:38am

9/9/17, 2:38am

9/9/17, 2:41am

GN Power U2 (227 MW) and U1 (277 MW) tripped out due to still

undetermined cause. Additional MLD was implemented at 2:48am

as per request of NGCP SO.

3:01am

9/12/17, 5:06pm GN Power 2 (315 MW) tripped out due to undetermined cause 5:11pm

9/15/17 4:56pm GN Power 2 (316 MW) tripped out due to still undetermined cause 5:01pm

9/16/17, 8:40am GN Power 2 (250 MW) tripped out due to still undetermined cause 8:43am

9/16/17, 9:12am GN Power 1 (316 MW) tripped out due to still undetermined cause 9:16am

No. of ALDs in

MERALCO

Jan2017 1

Feb2017 1

Mar2017 2

Apr2017 3

May2017 1

Jun2017 6

Jul2017 2

Aug2017 1

Sep2017 7

Oct2017 4

Nov2017 2

Dec2017 2

Automatic Load Dropping (ALD) – “Process of automatically and deliberately removing

pre-selected loads from a power system in response to an abnormal condition in order to

maintain the integrity of the power system” (Philippine Grid Code 2016)

41

Source: www.ngcp.ph

For 2018, reserves in Luzon are projected to be lowest during the summer months when

peak demand is expected to occur and hydro plants have lower available capacity. Yellow or

Red Alert conditions are not anticipated, so long as forced plant outages are minimized.

42

If Luzon demand should grow by 4.9% per year until 2040, the grid will need additional 24,385 MW capacity.

Source: DOE E-Power Mo Luzon Conference 12Jul2017

• DOE demand growth forecast of 4.9% for Luzon is based on NEDA GDP targets for Ambisyon Natin 2040

Power Supply Contracts

44Power Purchase Agreements (PPAs), Power Supply Agreements

(PSAs) and Interim Power Supply Agreements (IPSAs)

1 Supplemental agreement for 3-year extension filed before the ERC for approval 2 Supplemental agreement for 1-year extension from June 2017 to June 2018 confirmed by ERC 3 PEDC IPSA with PA implemented 28MW starting January 26, 2017, and 70 MW starting January 28, 20174 IPSA Supplemental Agreement signed on January 26, 2017

Competitive Selection Process (CSP)

46

46

DOE Department Circular No. DC2018-02-0003 “Adopting and Prescribing the

Policy for the Competitive Selection Process (CSP) in the Procurement by the Distribution Utilities (DUs) of Power Supply Agreement (PSA) for the Captive Market”

COVERAGE• Upon effectivity of the Circular, All prospective PSAs in

grid and off-grid areas shall be procured through CSP

• CSP involves publication of Invitation to Bid, pre-bid

conference, bid evaluation, and pre-/post-qualification of

winning bidder

• Exemption from CSP may be granted by the DOE in the

following instances: • Generation project owned by the DU funded by grant or

donations

• Negotiated procurement of emergency supply

• Provision of supply in off-grid areas prior to the entry of

New Power Providers

• Provision of supply by PSALM through bilateral contracts

for power produced from undisposed generating assets

and IPP contracts sanctioned by EPIRA

• PSAs that were granted exemption from CSP shall be

implemented by the DU immediately without prejudice to

the evaluation and final decision of the ERC

47

DOE Department Circular No. DC2018-02-0003 “Adopting and Prescribing the

Policy for the Competitive Selection Process (CSP) in the Procurement by the Distribution Utilities (DUs) of Power Supply Agreement (PSA) for the Captive Market”

MECHANICS• Each DU shall annually develop and submit to the DOE a Power Supply Procurement Plan, which shall contain

among others, committed energy and demand, and indicative schedule for CSP

• The DU’s CSP may be managed by a Third Party Bids and Awards Committee (TPBAC) or a Third Party

Administrator (TPA)• The TPBAC shall have 5 members, where 3 members will come from the DU and 2 members will come from captive

customers that are not directly or indirectly related/affiliated to the DU

• The TPA shall not in any way be connected to any electric power industry player and shall have representation from

consumers

• Each CSP shall be completed within 5 months from the time of the publication of the Invitation to Bid until

submission of the PSA to the ERC

• Direct negotiations may be made by the DUs after at least 2 failed CSPs and there is no outstanding dispute on

the conducted CSP. A CSP is considered failed when during its conduct:• No proposal was received by the DU

• Only 1 generator submitted an offer

• Competitive offers of prospective generators failed to meet the requirements prescribed in the bid document

REGULATORY SUPPORT: Within 60 days upon effectivity of the Circular, the ERC shall develop rules

and procedures to: (i) support the Circular, including guidelines for TPA accreditation and a PSA

template, and (ii) address disputes arising from the conduct of the CSP.

Power Generation

49Meralco PowerGen Corporation

�UNDER CONSTRUCTION:

�San Buenaventura Power Ltd. Co., Mauban, Quezon� 1x455 MW (net), Super Critical Pulverized Coal-fired power plant

� Japanese-Korean EPC contractor; construction of the power project is now on its 28th month and on schedule for commercial operations in mid-2019

�UNDER DEVELOPMENT:

�Redondo Peninsula Energy, Inc., Subic, Zambales� 2x300 MW (net), Circulating Fluidized Bed Coal-fired power plant� 225-MW Power Supply Agreement (PSA) with Meralco for Phase 1 submitted to ERC for approval

in April 2016. Public hearings, Technical Working Group (TWG) review and assessment of the PSA and the tariff, and other processes completed in end-April 2017. ERC approval still awaited

� (75MW PSA) with Aboitiz energy Solutions signed in April 2016� RPE remains committed to the execution of the project. RPE is classified as a Committed Project

by the DOE, has the Environmental Compliance Certificate (ECC) from DENR, and is registered by the BOI as a Preferred Non-Pioneer Enterprise

� EPC Contract signed in October 2016 with Doosan Heavy Industries and Azul Torre Construction Inc.

� The financing agreements for full debt requirement (1st 300 MW) were signed in December 2016 with a group composed of three (3) Philippine commercial banks

� Project costs continue to increase while awaiting ERC approval due to EPC cost escalation, weaker peso to dollar rate, and higher interest rates. RPE is exploring ways to manage these increasing EPC and financing costs with the aim of preserving the project’s economics

50Meralco PowerGen Corporation

�UNDER DEVELOPMENT:

�Atimonan One Energy Inc., Atimonan, Quezon � 2x600 MW (net), Ultra Supercritical Pulverized Coal-fired power plant� The PSA with Meralco submitted to ERC in April 2016. Public hearings, Technical Working Group

(TWG) review and assessment of the PSA and the tariff, and other regulatory processes “Done”. ERC approval is awaited

� The project is classified as a Committed Project by the DOE; has secured DENR’s Environmental Compliance Certificate (ECC) in October 2015, has been issued the Certificate of Registration as a Preferred Pioneer Enterprise by the Board of Investments (BOI)

� Evaluation of the EPC bids received from contractors is essentially concluded� Mandate Letter for up to Php107.5B from a group of 7 local banks signed� Connection Agreement with NGCP executed in January 2017; 23-km Transmission Line (from

Atimonan Power Plant site to New Pagbilao Substation) approved by the ERC in February 2017� Construction of a 1.6-km Access Road to the project site has been completed� A memorandum of understanding for the construction of the Transmission Line has been signed� MGen intends to establish a Joint Venture with the Electricity Supply Board of Ireland (ESBI), a

leading third party service provider in O&M services worldwide, that will allow for a transfer of skills and expertise to MGen

� Regular CSR activities are in place for the benefit and development of the affected communities and the LGUs, including donation of facilities to the Municipality such as ambulance and dump truck

� Expected completion is in 2021/2022

51Meralco PowerGen Corporation

�UNDER DEVELOPMENT:

�St. Raphael Power Generation Corporation, Calaca, Batangas� 2x350 MW (net), Subcritical Pulverized Coal-fired power plant� JV agreement with Semirara Mining and Power Corporation� A PSA was signed by SRPGC and Meralco in April 2016 for 400 MW capacity of the plant. The PSA

is awaiting approval by the ERC� An Environmental Compliance Certificate for the project was secured in September 2015� Grid Impact Study for the proposed transmission line interconnection was approved by the

NGCP in February 2017� Development activities for the project are ongoing

�OTHERS

�Global Business Power Corporation (14% MGen ownership)� GBPC is the largest independent power producer in the Visayas with an existing portfolio totaling

854 MW (coal and diesel plants)� In June 2017, GBPC signed an agreement with the Alcantara Group for the acquisition of 50%

interest in Alsons Thermal Energy Corporation (ATEC). Acquisition was approved by the Philippine Competition Commission in September 2017

�PacificLight Power, Jurong Island, Singapore (28% ownership)� 2x400 MW combined cycle LNG power plant

52Pure Meridian Hydropower Corporation

Tailrace

Powerhouse

Surge Tank

Weir

Headrace

Penstock

Powerhouse

Weir

Surge tank

Main Penstock

PulanaiRiver

Tailrace

TrifurcationPenstock

• PMHC is a 50-50 Joint Venture between MERALCO and Repower Energy Development Corporation (REDC). REDC was established in 2013 to “carry on and conduct business in all renewable energy resources.”

• PMHC plans to develop, build, own and operate the 10.6MW Pulanai and 3.0MW Lalawinan Run-of-River Hydropower projects, expected CODs of which are both in 2020.

• PMHC subsidiaries namely: PMHC Pulanai Inc. and PMHC Lalawinan Inc. were created as project SPVs to operate the 10.6MW project in Valencia City, Bukidnonand the 3.0MW project in Real, Quezon, respectively.

PMHC Projects

Project: PMHC Pulanai, Inc.Description: 3 x 3.533MW Run-of-River Hydropower PlantLocation: Valencia City, Bukidnon

Project: PMHC Lalawinan, Inc.Description: 2 x 1.5MW Run-of-River Hydropower PlantLocation: Real, Quezon

PMHC Pulanai Inc.PMHC Lalawinan Inc.

53Spectrum

Commitment to market-leading energy solutions that deliver value to our customers

� Grid-tied systems� Hybrid and Energy storage systems � Solar Thermal/UV Solutions

Renewable Energy subsidiary of Meralco� End-to-end technical capabilities� Highly bankable financial resources� Compliant to high ethical standards

“Your One Solar Source”

Our Customers Total Projects Won and for Implementation to date 4.9.MW

• Philip Morris• Maynilad• Toyota Motors• Binan City Hall• Shell• Cagbalete• Coastal Marin• Texicon Adventures• Brgy Talon 4• Brgy Pamplona

• Acienda Mall (Cathay Land)

Outright Purchase PPA

Renewable Energy Law Implementation

55

Meralco connected the country’s first Net Metering (NM) customer

No. of Customers (January 2018) Capacity (MWp)

1,155 8,047 kWp

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

0

200

400

600

800

1,000

1,200

1,400Ja

n-1

5

Fe

b-1

5

Ma

r-1

5

Ap

r-1

5

Ma

y-1

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Jun

-15

Jul-

15

Au

g-1

5

Se

p-1

5

Oct

-15

No

v-1

5

De

c-1

5

Jan

-16

Fe

b-1

6

Ma

r-1

6

Ap

r-1

6

Ma

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6

Jun

-16

Jul-

16

Au

g-1

6

Se

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6

Oct

-16

No

v-1

6

De

c-1

6

Jan

-17

Fe

b-1

7

Ma

r-1

7

Ap

r-1

7

Ma

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7

Jun

-17

Jul-

17

Au

g-1

7

Se

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7

Oct

-17

No

v-1

7

De

c-1

7

Jan

-18

CA

PA

CIT

Y (

KW

P)

NO

. O

F C

US

TO

ME

RSNet Metering Customers

as of January 2018

Customer Count Capacity (kWp)

1,155

8,047kWp

56

FIT-Eligible RE

Solar 25.5MW

Wind 54MW

Biomass 15.68MW

Total 95.18MW

Non-FIT RE

Solar 6.680MW

Biomass 4.1 MW

Hydro 21.96MW

Geo 20MW

Total 52.80MW

Hosts the biggest embedded

geothermal and wind projects

Meralco hosts more than 20 RE projects, 6 of which are FIT-eligible

57TransCo’s Petition for Approval of FIT-Allowance Rate

� CY 2016 FIT-All Rate (ERC Case No. 2015-216 RC)

� Final 2016 FIT-All Rate of Php0.1830/kWh

– Increase of Php0.059/kWh from the provisionally-approved rate of Php0.1240/kWh (April 2016 billing)

� Reflected starting the June 2017 bills to customers

� CY 2018 FIT-All Rate (ERC Case No.

2017-079 RC)

� Applied for a FIT-All Rate of

Php0.2932/kWh

0.0406

0.1240

0.1830

0.2291

0.2932

0.0000

0.0500

0.1000

0.1500

0.2000

0.2500

0.3000

0.3500

1 2 3 4 5

FIT-All Rates, 2015-2018

2015 2016 2017 20182016

� CY 2017 FIT-All Rate (ERC Case

No. 2016-192 RC)

� Applied for a FIT-All Rate of

Php0.2291/kWh

� Hearings were terminated on

28 Sept 2017

� Application filed on 30 August 2017

58

A market-based policy

that requires electricity

suppliers to source an

agreed portion of their

energy supply from

eligible RE resources

Renewable Portfolio Standards (RPS) Rules

Target RE Share Aspirational target RE Share of 35% by 2030

RPS MandateAnnual minimum incremental in the percentage of

electricity sold by each RPS-mandated participant, which

shall not be less than 1% over the next 10 years.

Mandated

Participants

• All DUs for its captive customers

• All Retail Electricity Suppliers

• Generating Companies serving the directly-connected

customers

• Entities operating within the economic zones

• The DOE Circular promulgating the RPS Rules was signed by Sec. Cusi on 22 December 2017.

• Sec. Cusi, in a media release, assured the industry players that the RPS will not result in higher

electricity prices, with the inclusion of a “no higher rates” condition in the Rules.

2017

• Promulgate RE Market Rules

• Establish RE Registrar

� Establish RE MarketPromulgation of RPS

(Dec 2017)

2018 2019 2020

� Target start of RPS

Compliance

Transition

Period

59

RE

NE

WA

BL

E

EN

ER

GY

AC

T

RE

NE

WA

BL

E

EN

ER

GY

AC

T Non-Fiscal

Incentives

Fiscal Incentives

Net Metering

Feed-In-Tariff

Green Energy Green Energy Option Program

RE Market

Renewable Portfolio Standards

GEOPrefers to the mechanism

to empower end-users to

choose renewable

energy in meeting their

energy requirements.

Green Energy Option Program (GEOP)

January 2018 Draft GEOP:• GEOP will be similar to RCOA, but more “aggressive” in terms of eligibility threshold

• RE supplier has to provide the full, 100%-RE requirement of the GEOP customer

• Pursuant to IRR: DOE to issue the GEOP Implementing Rules and Regulations, while ERC to issue the

Regulatory Framework

Updates:• DOE conducted a TWG on 12 February 2018

• DOE is soliciting comments from stakeholders

Prepaid Retail Electricity Service

61

61

More than 90,000 customers are under prepaid service

Manila | Mandaluyong | Makati

| Pasig | portions of Rizal |

pockets in San Juan, Quezon

City, Paranaque, Novaliches,

Caloocan, Cavite and Bulacan

ACTIVATIONS

COVERAGE

AREA

EXISTING

92,822 customersas of Mar 20, 2018

Social dimension of Kload : makes cash flow easy, no bill shock,

customers takes responsibility for their own usage

Commercial Pilot Monitoring Research, June - July 2015, Synergy and TNS

142M kWh (Php 1.3B)as of Mar 12, 2017

ENERGY SALES

Subsidiaries

63Subsidiaries

MER

Stake

Meralco PowerGen Corporation 100% Organized to develop competitive and reliable power plants of up to 3,000 MW of capacity.

Meridian Atlantic Light Company

Ltd. 100%

Technical Partner of a Nigerian investor, Integration Energy Distribution and Marketing

Limited (IEDM), in the operations of two large private distribution utilities in Nigeria (Yola and

Ibadan).

Vantage Energy Solutions and

Management, Inc.100% Retail Electricity Supplier providing retail energy services.

MSpectrum, Inc. 100%Provider of solar photovoltaic (PV) system that converts sunlight into electricity, as well as

end-to-end technical capabilities.

Clark Electric Distribution

Corporation 65%

Distribution utility in the Clark Economic Zone, location of high-end IT-enabled industries,

aviation and logistics enterprises, tourism and other sectors.

Comstech Integration Alliance, Inc. 60% Investor-Manager of Pampanga II Electric Cooperative Inc. (PELCO II).

Company Business Focus

Meralco Industrial Engineering

Services Corporation 99%

Contractor-specialist engaged in engineering, construction and maintenance related to power

generation, transmission and distribution, water resources and telecommunications.

Meralco Energy, Inc. 100%

Provides beyond-the-meter energy services to Meralco’s key accounts, covering energy

efficiency services, power quality solutions, innovative systems in advanced metering

infrastructure.

CIS Bayad Center, Inc. 100%Bills payment collection service operating nationwide; accepts payments for a wide range of

companies including banks, telecoms, utilities, and cable television.

Radius Telecoms, Inc. 100%Data connectivity solutions provider which operates a fiber-based telecomm infrastructure,

expanding to more than 2,000 km. across the Meralco’s franchise.

Meralco Financial Services

Corporation 100%

Provides innovative customer-based products and services that support Meralco’s core

business.

Lighthouse Overseas Insurance, Ltd. 100% Non-life insurance company that reinsures Meralco’s major catastrophic risk exposure.

MRAIL, Inc. 100%Design and construction of power supply substations and distribution systems for railways,

maintenance of railway power systems, consultancy services for railways projects.

Serv

ices

Po

wer

Thank you

MANILA ELECTRIC COMPANY

(Meralco)