Macquarie has placed Manila Water Company (MWC) at the head of its list of Philippine utility recommendations, followed by Maynilad Water Services (MYNLD), the investment bank said in published research. The bank also ranks Aboitiz Power (AP) third and Manila Electric Company (MER) fourth in its pecking order.
Macquarie’s preference for water companies rests on what it describes as defensive demand patterns and clearer tariff visibility compared with power utilities. The bank highlighted that water consumption tends to be more stable than electricity usage, and that both MWC and MYNLD have rate rebasing frameworks covering 2023-27 that largely set tariff trajectories up to 2027.
Tariff adjustments enacted in January 2026 raised rates for the two water concessionaires by different amounts - 11% for MWC and 3% for MYNLD - steps the bank views as part of pre-established rebasing outcomes. Macquarie also notes that water tariffs are indexed to inflation and foreign exchange movements, adding a further element of predictability.
On household budgets, Macquarie calculates that electricity bills represent roughly 8% of a typical household’s expenditure, while water bills account for about 4%. The bank observed that, in episodes of accelerating inflation, residential electricity consumption has tended to soften, showing a moderate inverse correlation with rising price levels.
Macquarie pointed to the specific concession mechanics that underpin the water companies’ revenue models. Under the concession framework for MWC and MYNLD, the companies are entitled to a guaranteed 12% pre-tax return on capital expenditure, operating expenses, and concession fees throughout the life of their concessions, which run through 2046.
Contrast with power: the regulator has suspended operations of the Wholesale Electricity Spot Market to manage supply and prices. That intervention allows for administered pricing arrangements that can limit profitability for generators that sell into the market. Macquarie noted that about 10% of AP’s generation output and roughly 5% of MER’s output is channelled to the market.
For MER, the bank flagged an ongoing rate rebasing process covering the period from July 2026 through June 2030, with a regulatory decision expected by June 2026. MER has applied for a 74% rate increase, though Macquarie’s base case assumes a substantially lower outcome - a 17% rate cut.
Macquarie’s ordering of preference - MWC, MYNLD, AP, then MER - reflects the bank’s view that MWC combines defensive characteristics with upside from growth opportunities outside the Philippines. The bank cited MWC’s overseas ventures and backing by the Razon group as supporting its relative preference for MWC over MYNLD.
Contextual note: The analysis focuses on relative defensive characteristics and tariff visibility across water and power utilities, and outlines regulatory and market factors that support Macquarie’s rankings.