It behooves San Miguel Corp. to absorb the P15-billion loss it claimed to have suffered from the power supply agreements it holds since these were self-inflicted.

As anticipation builds up on the next move of SMC before the 60-day temporary restraining order lapses, industry sources said SMC should not even consider the termination of the PSAs since it would mean huge suffering for the public who will shoulder higher prices.

"SMC should continue supplying despite its claimed loss because it will be consumers who will suffer. It should absorb the losses in the meantime since its other companies engaged in separate businesses showed strong earnings that contributed to the P19.8 billion total profit in the first half."

"The price of coal is also trending down. Thus, the situation that the company had cited as a reason for its accumulated losses is shifting," the source said.

Another official said it will be painful for SMC but it is partly to blame for the accumulated losses since it made an extremely low offer to corner the PSAs with Meralco.

"With the size of the conglomerate, it can find ways to augment the losses from its energy operations," the industry veteran indicated.

"Say, if you sell something, you can't continue with the business if losses accumulate," he said considering the dilemma that SMC is in.

"Common sense indicates that the PSAs it holds are not sustainable. There would come a point when they would have to cut their service for survival," he added.

"You can't keep selling on a losing proposition."

SMC, however, can now terminate the PSA because the TRO made the suspension of the agreement moot and academic since the court order disregarded the ERC order dismissing the price hike petitions.

"It's a no-win situation, everybody losses. Even if Meralco goes to court against San Miguel but in the meantime, something needs to be done to ensure that the electricity supply continues, at the least cost, to consumers," the source added.