MCWD defers 12% rate hike

Water consumers in Metro Cebu have something to be thankful for as the Metro Cebu Water District decided to defer the implementation of the 12-percent increase in its rates.

But this relief is just temporary because the water district might impose the increase in the second or third quarter of the year.

MCWD chairman Armando Paredes said that the Local Water Utilities Administration, in its decision last August 23, allowed the water utility to impose 12 percent increase in its rates starting September 1, 2005 and another 12 percent starting January 1, 2006.

But he said they did not implement the increase yet because they do not want to burden their concessionaires.

"LWUA has allowed us to implement the 12 percent increase this year but we deferred its implementation. As long as we can hold it, we will hold it," Paredes said.

However, Paredes said that they might decide to implement the increase in the second or third quarter of this year.

"We will study if the 12 percent could still be lowered," he said.

Another reason he cited why they temporarily deferred the increase is the imposition of the two percent franchise tax on the water utility that they passed on to their consumers since January 1.

Paredes said that last year they paid P16 million for franchise taxes and have no other way of recovering it but passing it on to their customers.

If MCWD decides to implement the additional 12 percent rate increase this year, their new charge for minimum of 10 cubic meters per month would be raised to P136.64 from the existing P122.

LWUA per Board Resolution No. 158 approved the application of MCWD for 12 percent increase for two consecutive years, which it had filed last June 2005.

MCWD information officer Tertuliana Andaya earlier said the new rates already include the rates under the Carmen Bulk water project. But if the project will not push through, the water firm will only implement the rates for two years and might seek another increase in its rates after 2007.

Officials of the water utility earlier justified that MCWD needs to increase its rates because if not, it would incur losses due to inflation, purchase of water from independent suppliers and capital expenditures.

Andaya said that their increase is actually not so high and would not hurt small consumers because they are being subsidized. Besides, she added that consumers are being charged by bracket and those who consume less are charged less. - Wenna A. Berondo