“The regulatory environment is turning more favorable and that will help boost the utility stocks,” said Allan Yu, who helps manage US$3.1 billion of trust assets at Metropolitan Bank in Manila.

Manila Electric has not been able to raise its rates since 2003. The utility serves an area that is home to about a quarter of the nation’s 96 million people, making it the nation’s largest power retailer.

Manila Water’s franchise was extended by 15 years to 2037, the utility said last week. The utility said it would invest an additional 263 billion pesos ($5.47 billion) and hold off a rate increase this year.

The water company was raised to “outperform” at CLSA Ltd., which said the extension and a new project in Boracay Island would boost the value of the utility.

Manila Water Friday added 3.7 percent. Aboitiz Power Corp., owner of power plants and electricity distributors, rose 3.9 percent.

“There is still momentum for utilities to go up because of these recent regulatory developments,” said Jonathan Ravelas, a market strategist at Banco de Oro Unibank Inc. in Manila. “Lower oil prices give government room to allow these adjustments as early as now.”

Source: Bloomberg