The MWSS was reported to have instructed Maynilad and Manila Water Co. to downscale their programmed increase in water pressure from 31 psi (pounds per square inch) to only 7 psi in order to avert a concomitant increase in water rates. CREBA said this decision appears to be a mere political ploy on the part of government, trading the welfare of the citizenry for voter support.
In a letter to President Arroyo, CREBA said that Metro Manilans have been suffering from a perennial water shortage problem wherein water supply is rationed for only one to two hours per day in most areas, while in other areas taps run dry for weeks or even months.
"As we understand it, the comprehensive water rehabilitation programs of the private water concessionaires are intended to solve this problem and address the future needs of an ever-growing population, by replacing or upgrading extremely old, dilapidated and inadequate pumping stations and pipeline systems as well as improve water sourcing, allocation and delivery," CREBA said.
It added that this cannot be undertaken without considerable financial outlays, which can only be recovered by either increasing water rates, or by government subsidy, or a combination of both. "It is a classic case of extremely poor governance to continue to deny the citizenry one of the most basic needs for health and hygiene – if not survival itself – simply because government is unwilling to undertake measures to address the issue of cost recovery."
CREBA said resolving the water shortage problem is long overdue, and that this was the main reason for privatizing the water service.
"Such a precious commodity as water requires a fair price. And a reasonable increase in water rates – concomitant with improved delivery – is not only fair, but also necessary to discourage wasteful consumption," the letter said.
"To our mind, the cogent issue is not only whether to improve water service or not, but also how to ease the burden of cost recovery on the part of the underprivileged citizenry. In this regard, a government subsidy scheme may be resorted to, in order to effect social pricing wherein the underprivileged would be charged relatively lower rates.
"Necessarily, such subsidy would require budgetary outlays which could further worsen the fiscal deficit – unless additional revenue generation measures are undertaken.
"For this purpose and for other vital social programs, CREBA is presenting to government a package of revenue-generating measures so designed as not to further hurt the poor nor unduly constrict the local business sector.
"Among these measures are (1) the legalization, franchising and taxation of jueteng, which could net for government at least P100 billion a year, even as it would enable regulation to protect bettors who are mostly the poor; (2) higher tariffs on imported non-essentials and luxury items such as jewelry and luxury cars could fetch some P2 billion; (3) increased tax rates on "sin products" such as liquor and cigarettes, which may also serve to promote better health by compelling moderate consumption, could add another P50 billion; and (4) when economic conditions shall have improved, government may impose higher idle lands tax and implement the Finance Department’s plan to scrap, if not scale down, the fiscal incentives granted to foreign investors in the economic zones."