San Miguel Corp. and First Philippine Holdings Corp. said it is not a ?priority? to raise their stakes in Manila Electric Co., whose shares have risen on speculation the two are vying for control of the utility.

?If we have the cash, we would, but right now we have other priorities,? First Holdings president Elpidio Iba?ez said in a phone interview yesterday. ?Our stake allows us to veto and that?s a pretty strong position. Our priority now is to use our cash for debt service.?

Shares in Manila Electric, or Meralco, climbed for an eighth day in Philippine trading, the longest streak since June 2003, on speculation San Miguel and the Lopez family?s First Holdings are building their positions to take control of the nation?s biggest power producer.

San Miguel president Ramon Ang said in a message it?s ?not our priority? to buy more shares of the utility. Ang, together with San Miguel chairman Eduardo Cojuangco and two other nominees of the company were named to Meralco?s 11-member board on Jan. 26.

First Holdings controls 33.4 percent of Meralco while San Miguel, which agreed to buy 27 percent of the utility in October, holds about 34 percent. A group including San Miguel director I?igo Zobel bought the voting rights to a stake of almost 7 percent, on the day San Miguel installed its Meralco board representatives.

?Investors are speculating on a proxy fight between the incumbent Lopez group and the new entrant San Miguel,? said Gilbert Lopez, head of Manila research at Credit Suisse Group AG. ?The speculation is that one of the groups must have a clear edge to control the utility.?

Around 7.58 million Meralco shares were traded as a block at P80 each as of 11:48 a.m. yesterday, according to Peter Lee, a senior investment officer at Manila-based IGC Securities Inc. Three blocks of Meralco shares, totaling 16.7 million, were traded in the three days through yesterday.

?There?s been a lot of movements in the market and we don?t know who these buyers are,? Iba?ez said. He said First Holdings will ?keep our options open? on increasing its stake further.

Meralco climbed 4 percent to P78 at the noon close of trading, the biggest gainer in the main Philippine Stock Exchange Index. The stock has risen 31 percent in eight days, compared with a 4 percent advance in the benchmark.

?The statements of both companies will not necessarily quell market speculation,? IGC?s Lee said. ?It?s the interest for any controlling group to set up a buffer and build a wall to guard against any attack in the future.? Bloomberg