Meralco [MER 362.00] [link] was recently drawn back into a zone of uncertainty after rumors circulated that President-elect Marcos was considering Rodante Marcoleta, the House deputy speaker, for a cabinet position as Secretary of the Department of Energy (DoE).

Mr. Marcoleta was elected as a party-lister, and he remains a congressman today after a failed bid to run for election to the Senate.

Mr. Marcoleta is best known for his 2021 call for “early review” of MER’s franchise, on the basis of the allegation that MER overcharged customers during the COVID-19 lockdown, after he participated in the successful political termination of ABS-CBN’s [ABS 9.98 2.92%] franchise renewal fiasco.

Metro Pacific Investments [MPI 3.76 1.08%] owns the largest single stake in MER, with JG Summit [JGS 51.70 4.26%] holding lesser (but still significant) stakes.

Make no mistake, if Mr. Marcoleta is selected for the role of DoE Secretary, it won’t be despite his vocal opposition to MER’s franchise, it will be because of it, and shareholders of MER should likely prepare for a potential battle.

What would such a battle look like?

Well, we’ve already seen two high-profile interventions by the current administration into bedrock corporations like Manila Water [MWC 17.22 4.23%] and ABS, with MWC as the playbook for forced ownership change and unilateral renegotiation, and ABS the playbook for basic value destruction.

Pandora’s box was opened a long time ago, and this kind of intervention, leading with the “just asking questions” approach, has probably been normalized.

This is one to watch closely.

The cost of electricity is not going down, and with the price of coal rising and inflation still doing its thing, this conflict could become a convenient populist button for the administration to push at some point.

This is not a political statement, this is simply a factual risk that needs to be recognized.