CHAPTER I

INTRODUCTION

Company Background

Manila Electric Railroad and Light Company or known as Meralco was established in 1903. It was created to provide light and an electric railway system for Manila. That time, Meralco’s facilities were the largest single investment of American private capital in the whole of East Asia.

The transportation infrastructure of Meralco was destroyed during World War II which caused the company to refocus its efforts into its electric services, foregoing the transportation side of the company.

1960 when a group of Filipino investors led by Eugenio Lopez Sr. bought Meralco from the American investors. During this period Meralco became the very first billion peso company in the Philippines.

During the 1970s the Philippine Government made it a state policy for the government to own all major generating facilities. Meralco sold all of its generating plants to the National Power Corporation (NPC) and, thus, electric distribution became its core business. Indeed, in the first half of the 1980's, 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 those of the utilities that had previously served them.

1980’s when 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.

1990’s 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