By Alexandria Grace C. Magno, Reporter

Market analysts say investors will be looking for clarity on the administration's proposed reforms and implementation plans following President Ferdinand R. Marcos, Jr.'s State of the Nation Address (SONA), with particular attention on the energy, infrastructure, and capital market sectors.

Toby Allan C. Arce, Head of Sales Trading at Globalinks Securities and Stocks, Inc., said the SONA reaffirmed that infrastructure, energy security, and digitalization remain central to the administration's economic agenda. He noted that the power sector is expected to monitor next steps closely.

Among the most significant policy proposals in the address, according to Mr. Arce, were the proposed amendments to Republic Act No. 9136, or the Electric Power Industry Reform Act (EPIRA) of 2001 — particularly the removal of system loss charges — given their potential implications for regulated utilities and electricity pricing. The Philippines has some of the highest retail electricity rates in Southeast Asia, a long-standing competitiveness concern that EPIRA was originally enacted to address through industry restructuring and privatization.

"The legislative details will matter far more than the announcement itself," Mr. Arce said in a Viber message.

He explained that distribution utilities, power generation companies, and investors would be seeking clarity on how system loss charges would be treated, whether the reforms would distinguish between technical and non-technical losses, and how utilities would continue recovering legitimate operating costs.

Last week, energy stakeholders backed the president's call to amend the 25-year-old EPIRA but cautioned against removing system loss charges from consumers' electricity bills without first determining how the costs would be recovered.

Listed Manila Electric Co. (Meralco), the country's largest private electric distribution utility, said it is willing to participate in discussions on the proposed amendments. However, it urged lawmakers to consider the impact of removing system loss charges, noting that such losses are "inherent" in operating an electric distribution system.

The Philippine Rural Electric Cooperatives Association, Inc. (PHILRECA), representing 121 electric cooperatives nationwide, said it could support the removal of system loss charges only if the National Government directly shoulders the costs through a dedicated subsidy mechanism.

System loss charges form part of the generation and transmission costs paid to power producers and the grid operator. They cover electricity losses arising from technical and non-technical factors, including illegal connections.

Under EPIRA and implementing guidelines issued in 2017, private distribution utilities may recover system loss charges of up to 5.5%, while electric cooperatives may recover up to 8.25%. Losses beyond those limits are absorbed by the utilities themselves.

Beyond the power sector, Mr. Arce said the administration's continued focus on transport and connectivity projects signals policy continuity rather than a directional shift. He noted that listed property developers, construction companies, and conglomerates stand to benefit if infrastructure investment remains a national priority, with sustained spending on logistics, transport, and energy supporting long-term industrial expansion. The administration's "Build Better More" agenda encompasses over 180 flagged infrastructure projects spanning transportation, water resources, and energy.

Mr. Arce also expressed an expectation for a more comprehensive discussion on capital market development and investment competitiveness. While the Philippines has made progress in improving market regulations and attracting investments, as highlighted in the SONA, he pointed out that the local stock market continues to face relatively low liquidity and limited foreign participation. The Philippine Stock Exchange index has lagged many regional peers in recent years, and new listings have declined, trends that underscore the structural challenges facing the market.

"A clearer roadmap on deepening capital markets, encouraging more listings, strengthening institutional investing, or broadening investor participation would have been well received by listed companies and market participants," he said.

Investors would also welcome greater policy direction on manufacturing and export competitiveness, particularly for semiconductors, electronics, artificial intelligence, and other advanced industries, he added. The semiconductor and electronics sector remains the country's top export earner, accounting for a significant share of total Philippine merchandise exports.

"The renewable energy sector is likewise looking for continued policy execution rather than new policy direction. Investors will be watching for faster permitting, transmission expansion, improved grid integration, and measures that facilitate battery storage and other technologies needed to support higher renewable penetration," Mr. Arce said.

Industrial estate developers, utilities, telecommunications companies, and infrastructure operators are seeking greater visibility on implementation timelines, power infrastructure, investment incentives, and regulatory coordination as the government seeks to attract technology-intensive industries, he added.

"At this stage, the market is less concerned about new announcements than about the government's ability to execute existing priorities efficiently and consistently."

Meanwhile, Jesus Mariano P. Ocampo, President and Chief Operating Officer of Investment & Capital Corp. of the Philippines, said he had hoped for a stronger anti-corruption message during the SONA.

"Was really hoping for something more 'forceful' on his addressing corruption," he said in a Viber message.

Mr. Ocampo also cited energy self-sufficiency as one of the address's notable themes, saying the administration's emphasis on the issue appeared to point to nuclear energy as one option to reduce the country's dependence on imported oil. The Philippines has never operated a commercial nuclear power plant; the Bataan Nuclear Power Plant was completed in the 1980s but never fueled or commissioned. He added that developments related to the government's efforts to attract electric vehicle manufacturers to the Philippines would be worth watching.

"Groups seem to have the common impression that it is really the same old, same old… Until we see a conviction and actual jailing," Mr. Ocampo said.

Meralco's controlling shareholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.