Part 1: Debt, discipline, and daring: Inside the Lopez Group’s high-risk bets 

Meralco’s annual stockholders’ meeting in May 2008 was, as I wrote then, a classic lesson in how to win a corporate war. What was supposed to be a routine annual meeting in the Meralco Theater turned into a 12-hour siege: lawyers arguing over proxies, employees in green shirts packing the aisles, TV cameras catching every shrug and insult. By the time it was over, the Lopezes had clung to control of their crown jewel — but anyone watching closely could see that the days of a relaxed, Lopez-run Meralco were numbered. 

On paper, the fight was between two blocs that each controlled roughly a third of the company: the Lopez group, with about 33.4% through First Philippine Holdings, and the government camp — Government Service Insurance System (GSIS), Land Bank of the Philippines (Land Bank), PhilHealth, Pag-IBIG — with about 35%. In reality, it was a clash of styles and political backing. On one side sat Manuel “Manolo” Lopez, the old-school chairman who had presided over Meralco’s boardroom for years. On the other was Winston Garcia, the brash president and general manager of GSIS, a pension fund with deep pockets and, more importantly, a direct line to then-president Gloria Macapagal-Arroyo. 

Inside a boardroom that had long been cozy and cordial, Garcia was the new variable. He banged tables, stretched meetings to hours with probing questions on corporate governance, and sent Meralco at least 22 letters demanding documents — from audited financials to details of supply contracts with Lopez-controlled generators and service firms. He described himself to me as impatient, someone who “goes for the jugular.” Directors and executives who were used to a slower pace and gentler tone found him arrogant and bratty; he found them entitled and evasive. 

What really set the tone for that shareholders’ meeting was not just Garcia’s style, but his strategy. In the weeks leading up to it, he had already filed multiple cases in Pasay and Pasig courts to confuse Meralco’s lawyers, then quietly prepared a cease-and-desist petition at the Securities and Exchange Commission (SEC) as his real checkmate move. He knew that if he couldn’t win the vote on the floor, he could still try to stop the meeting itself.

Halfway through the annual general meeting, with about 86% of the shares represented, SEC director Hubert Guevara took the floor and read out the commission’s order: stop the meeting, stop the board elections, disregard thousands of proxies that favored the Lopez slate, and let the SEC supervise the canvassing instead. Nearly 4,400 proxies were in dispute, most of them “vote-all” forms from big custodians like HSBC, Citibank and Standard Chartered. GSIS argued that the Lopez camp had manipulated the validation process, and that assistant corporate secretary Anthony Rosete — an old Meralco hand — could not be impartial.

Then came the moment that made that meeting unforgettable. Rosete read the SEC order, paused, and, with the blessing of a Lopez-dominated board that had 9 votes versus 3 government nominees, declared the order “null and void.” The board cited jurisdictional issues: corporate disputes over board control, they argued, belonged to the regular courts, not the SEC. In effect, the Lopezes told the regulator and GSIS: we’ll finish this election now; you can sue us later. 

It worked. The meeting went on, the proxies were counted, and the Lopez camp ended the night with roughly 50.6% of the votes cast — enough to keep 5 seats versus 4 for government and two for independents. Manuel Lopez remained chairman, Jesus Francisco remained president, and the Lopez management team stayed in place. GSIS got a director’s seat for Garcia but not the board majority he had hoped would let him fire the top executives. 

It was a bravura display of incumbency. As I wrote then, the Lopezes chose to win the corporate war first and fight the legal battle afterwards. Whoever controls the board controls the company’s resources to fund the court cases. 

But even in 2008, you could feel that Meralco was no longer just a family asset. It had become the stage on which 3 forces were colliding: a government unhappy with ABS-CBN’s critical news coverage, a state pension fund chief campaigning on high power rates and “self-dealing” contracts with Lopez-owned plants, and a family that had made itself vulnerable by being in too many regulated, capital-hungry businesses at once. (READ: Meralco turns over new leaf as Lopez steps down as chair)

Why Meralco was such a tempting target

Meralco’s centrality made it inevitable that any political fight with the Lopezes would eventually land at its door. Unlike Bayantel or SkyCable, Meralco was not just one more line of business; it was the gatekeeper to the most lucrative electricity franchise in the country. Its wires carried power for Metro Manila and nearby areas. Under the Electric Power Industry Reform Act (EPIRA), generation and transmission were being privatized and deregulated, but distribution companies like Meralco still held local monopolies. Whoever controlled Meralco controlled access to a captive demand base that accounted for about 70% of Luzon’s electricity consumption. That made Meralco the preferred counterparty for new power plants built in the wake of the early-1990s power crisis.

Under government’s independent power producer (IPP) and Build-Operate-Transfer (BOT) programs, private firms like the Lopezes were invited to build plants, then sell electricity under long-term power purchase agreements (PPAs). A PPA is simply a contract where the buyer — in many cases Meralco — agrees to buy a certain amount of capacity or energy over 20–25 years. To make these projects bankable, many PPAs included take-or-pay clauses: as long as the plant was available, Meralco had to pay for a minimum amount of power, whether demand was perfect or not. 

This was the logic behind the Lopez push into gas-fired generation in the 1990s. Through First Philippine Holdings (FPH) and later First Gen, they developed the 1,000-MW Santa Rita and 500-MW San Lorenzo plants in Batangas under First Gas Power Corporation and related entities. Both plants had long-term PPAs with Meralco. These may seem like related-party deals: Meralco, controlled by the Lopezes, buying a big chunk of its power from Lopez-owned generators. 

Garcia seized on that. In 2008, he called these “self-dealing” contracts, suggesting the Lopezes used Meralco to favor their own plants even if it meant higher costs for consumers. He wanted access to all the supply contracts, including power deals and insurance placements, and bristled at being made to sign confidentiality undertakings or being given only briefings instead of full copies.

Federico “Piki” Lopez countered with numbers. In a briefing I attended, he showed that power sourced from First Gas cost Meralco about P3.91 per kilowatt-hour, compared with roughly P5.67 from National Power Corporation’s plants, about P7.85 from the spot market, and P3.56 from Quezon Power. In other words, the “relative” was not the most expensive supplier. In fact, by his calculation, First Gas was cheaper than government power and some third-party contracts. 

Both views were true in their own way. The First Gas contracts had been born out of a genuine power crisis and were approved by regulators at the time, and the rates did compare well against many alternatives. At the same time, the structure — Meralco as the gatekeeper, buying heavily from Lopez-owned plants under take-or-pay provisions — made it easy for a critic with a political mandate to paint a picture of a utility captured by its owners. When you added in the Bayantel, Maynilad, and SkyCable misadventures, the story of a family overstretched in regulated sectors wrote itself.

From Marcos to Duterte

All this would still be “just” a corporate governance story if the personalities and timelines involved didn’t tie back to presidents. 

If you start from Ferdinand E. Marcos and move forward, the pattern becomes clearer when you spell out what exactly each president thought ABS-CBN and the Lopezes had done to them.

Under Marcos Sr., the state didn’t bother with take-or-pays and proxy fights. It used martial law to seize ABS-CBN, Meralco and other Lopez assets, jailed Geny Lopez Jr., and forced the family into exile. There was no negotiation over debt terms, no arguments over whether take-or-pay provisions were above or below spot rates. The risk was expropriation, plain and simple. (FAST FACTS: What you should know about ABS-CBN)

Under Gloria Macapagal-Arroyo, the state’s tools were subtler but no less real. GSIS bought up Meralco shares, regulators questioned rates and contracts, the SEC issued a cease-and-desist order in the middle of a shareholders’ meeting, and a Court of Appeals division was later disgraced for its undue interest in the case. The Meralco war mixed real policy complaints — high power rates, related-party transactions, opaque contracts — with resentment over ABS-CBN’s critical coverage of the “Hello Garci” tapes and the wave of crises that followed, from the EDSA 3 uprising to the ZTE scandal. In Arroyo’s camp, ABS-CBN was not just another broadcaster. It was a platform that amplified doubts about how she won and how she governed. Her allies framed their pressure on Meralco and their hostility to ABS-CBN as part of a push for lower rates and fairer coverage, even as critics saw it as payback dressed up as policy. 

Under Rodrigo Duterte, as part 1 of this 2-part series already laid out, the weapon was the legislative franchise. There were no tender offers or proxy contests. There was a committee vote in the House in July 2020 that denied ABS-CBN a new franchise and effectively shut down its flagship business.

TIMELINE: Duterte against ABS-CBN’s franchise renewal

Duterte’s long, public quarrel with the network had several layers. He never forgave ABS-CBN for airing an attack ad during the 2016 campaign that showed children reacting to his cursing, and for failing to air about ₱7 million worth of his local campaign spots despite accepting payment, an issue the network later apologized for and explained as a first-come, first-served bottleneck. He wrapped that personal grievance in a broader crusade against “oligarchs,” repeatedly accusing the Lopezes of using media as a political weapon and of not paying enough taxes.

In a 2020 speech to soldiers, he said, “without declaring martial law, I dismantled the oligarchy that controls the economy of the Filipino people,” punctuating it with “p*tangina, I am very happy.” In his 2020 State of the Nation Address (SONA), he called himself “a casualty of the Lopezes” in the 2016 race, saying “media is a powerful tool in the hands of oligarchs like the Lopezes who used their media outlets in their battles with political figures.”

Seen together, the pattern is hard to ignore. Each time the Lopezes place big bets in sectors that depend on government licenses and approvals — broadcast frequencies, water concessions, power distribution, long-term PPAs with take-or-pay riders — they also place a bet on the president. When that bet goes wrong, the response has never been purely technocratic. It comes wrapped in the incumbent’s own sense of grievance about coverage, power and who owes whom.

By the time the 2020s rolled in, the pattern feels familiar. A president takes a dislike to ABS-CBN. The political temperature rises. The formal blow lands through a regulator or a vote — under Arroyo, through GSIS and the SEC circling Meralco; under Duterte, through a committee decision not to renew a franchise. After that, the drama shifts indoors. The same skills the Lopezes once used to fend off GSIS inside the Meralco Theater are now being used in boardrooms and law offices where only cousins and their lawyers are watching. 

That is what makes the current fight over a P2-billion infusion into ABS-CBN so charged. It is not just a spreadsheet question about return on capital. It is a family argument about who pays for the past 30+ years, and about how much of the remaining family fortune should be put on the line to keep a politically exposed newsroom alive. 

On one side, Gabby Lopez and some relatives argue that ABS-CBN has carried the Lopez name through three different waves of pressure — Marcos, Arroyo, Duterte. They see the network less as a “problem asset” and more as the vessel for the family’s public stance. In that view, finding P2 billion inside Lopez Inc. is not charity for a failing company. It is the latest installment in a long-running bill for having allowed their journalists to do what they were trained to do. 

On the other side, Federico “Piki” Lopez and his branch cannot be faulted for pointing to their own scars. They remember Bayantel and Maynilad slipping into rehabilitation, SkyCable restructuring its loans, and First Gen’s EDC bet nearly running into a refinancing wall. They also remember that when the holding company’s debt became too heavy, it was Meralco, an asset associated with Manolo’s branch, that were sold so the group could survive and so the power arm could eventually grow into what it is today. For them, discipline means being willing to sell assets, renegotiate loans and take real pain when a bet goes wrong, instead of automatically reaching for new money. 

Seen from a distance, the real argument between the cousins is not just about this P2-billion check, but about how clearly the family will set the limits of its risk the next time a president turns on them.

In financial parlance, that’s “pricing the risk,” but I’m not trying to lecture in high finance. I mean something much simpler: deciding in advance how much danger you are really willing to take on, and writing that down clearly enough that there are no surprises when trouble comes.

In money terms, that means being honest about how much of the family’s wealth you are prepared to expose to politically sensitive businesses like broadcast, water, power distribution and long-term power contracts with take-or-pay provisions. It means agreeing on how much support a company like ABS-CBN can expect from Lopez Inc. when it becomes a political target, and on what terms. It also means deciding which parts of the group must be protected from that fallout, so that when government hits one asset, the rest of the family business does not automatically go into crisis.

From my vantage point, it seems the Lopezes have mostly done that after the damage. After Marcos, they rebuilt. After Bayantel and Maynilad, they sold PCI Bank, NLEX and eventually Maynilad. After the EDC scare, they sold hydro, refinanced and pushed on. After the Meralco war under Arroyo, they sold down their stake and accepted that a utility of that size needs a different kind of political cover. After the ABS-CBN shutdown, they have been selling properties and cutting debt.

Each time, the adjustment came as a reaction. 

The opportunity in this third-generation quarrel is to move that conversation to the front. If they decide that ABS-CBN should remain the family’s lightning rod, they can say so explicitly and put real numbers behind it: how much capital they will commit, over what time frame, under what governance rules. If they decide that the energy arm must be insulated from media-related political shocks, they can say that too, and explain how.

That is all what “pricing the risk” really means here: agreeing on the cost of courage before the next president presents the bill. 

My hope is not to pick a winner among cousins, but to suggest that the most important decision they can make now is not just who runs Lopez Inc., or who signs a P2-billion check, but whether they will finally put into writing how far they are willing to go, together, the next time politics comes for them. – Rappler.com

Lala Rimando wrote about Philippine business, and managed newsrooms, including Newsbreak, ABS-CBN, Rappler, and Forbes, for over 25 years. She’s now based in La Union, taking care of her mom with dementia, and working on the multimedia biography of the late John Gokongwei.