New Metro water rates out by mid-June; hike certain

The new water rates in Metro Manila will be announced by the Metropolitan Waterworks and Sewerage System (MWSS) by mid-June and will be implemented in July.

Ed Santos, MWSS regulatory chief officer, said the MWSS "affirmation" of the rate hikes sought by the two water utility companies serving Metro Manila – Manila Water Company and Maynilad Water Services Inc. – would be out by June 15.

This is in line with the MWSS requirement that a 15-day notice be served to the public before the new rate hikes can take effect, Santos said.

However, Santos declined to say how much Manila Water, which services Metro Manila’s east sector, and Maynilad, which services the west, are asking.

Manila Water is reportedly asking a hike of P1.00 per cubic meter and Maynilad, P6.

Santos said the rate increase was only an affirmation since the MWSS had long approved the water rate hike. "We would not be approving any new rate but affirming it," he said.

The July hike is actually the third of a staggered increase, which is meant to cushion its impact on the public. Santos said the MWSS, being a regulatory agency, will check if the July rate increase is correct.

Santos also confirmed that water rates will be increased again next year but this is in accordance, he said, with the MWSS concession agreement with Manila Water and Maynilad.

The increase would still have to undergo public hearings before it is implemented, Santos said.

However, critics of the planned rate hikes are questioning the new concession agreements signed by the government with the two utilities, allowing Manila Water and Maynilad to recoup their foreign exchange losses by increasing their rates.

The two firms explained that improving water service in the metropolis took a lot of money, most of it in dollar-denominated loans.

But then the foreign exchange rate soared when the 1997 Asian currency crisis erupted, which made it more expensive for Manila Water and Maynilad to pay for the loans.

Unless they recoup the cost of their investment by increasing water rates, the companies said, they would be unable to operate.

Under the amended accords, the two concessionaires would be allowed to recover their foreign exchange losses during the previous years by jacking up their rates over the next two years starting in July.

The amendments included a so-called special transitory mechanism, which would enable the utilities to get back what they lost during the period of August 1997 to December 2000.

Another new provision, the foreign currency differential adjustment, will also enable Manila Water and Maynilad to raise rates to recover losses incurred from fluctuations in the foreign exchange rates from January 2001 up to the expiration of the amended concession agreement.