MANILA: A struggle for control has broken out at the largest power utility in the Philippines after the government put pressure on it to cut rates, and analysts say the dispute could affect privatization of the power sector. The state pension fund, Government Service Insurance System, or GSIS, has called for a management revamp at Manila Electric, or Meralco, in a bid to drive down rates. "I believe we can only bring down rates if we change management and put in somebody who can initiate reforms," said Winston Garcia, president of GSIS. But Garcia said the fund, which holds 25 percent of Meralco, was not interested in assuming management control and only wants to ensure that the power firm is not overcharging customers. Meralco is controlled by the Lopez family, which also owns two power generation plants and the geothermal firm PNOC EDC, as well as the biggest media firm in the nation, ABS-CBN Broadcasting. The family owns about one-third of Meralco. The matter is likely to come to a head at a Meralco shareholders' meeting on May 27. Critics say that Meralco buys power at high rates from generating firms owned by the Lopez family. "We will try our best to bring down power rates," President Gloria Macapagal Arroyo said at a cabinet meeting Tuesday. "This can be done if Meralco buys cheaper power from its own power producers." She wants to lower rates to appease foreign business groups that have complained of high power costs and to ease the burden on the country's poor who are saddled with rising food and oil prices. Some analysts and commentators say GSIS is putting pressure on the Meralco management at the insistence of the presidential palace. Arroyo's economic adviser, Joey Salceda, quoted the president as saying that she was not against the Lopez family. Salceda said in a radio interview that the government did not want to take control of Meralco. "It's bad for the country, it's bad for the poor, bad for the economy, it sends the wrong signal," he said. Meralco says it has to pay high prices for power bought from all generating firms, including those belonging to the state-run National Power, whose aging power facilities mean it costs more to produce energy. Jesus Francisco, Meralco's president, denied that power firms owned by the Lopez family were charging more. "There is some seasonality in power rates. Charges really rise in March and April due to the onset of summer," he said of the rates charged by Meralco. The government is privatizing National Power to cut its debt, increase state finances and attract fresh investment into the energy sector, but pressing Meralco to cut rates may turn off foreign investors, analysts said. "If you try and control the price that the power plants sell at, how are you going to privatize them? Who is going to buy them?" said Peter Wallace, of the Wallace Business Forum consultancy. "It's going to give them cause for concern and cause for rethinking their plans," Wallace said.