Press Secretary Ignacio Bunye said the government would also see to it that the rise in water prices would translate to better services to the public.
"The government’s interest is to ensure that everything is fair and square in these matters," he said.
Residential customers of Ayala-led utility firm Manila Water Co. Inc. who are consuming an average of one cubic meter per day or 30 cubic meters per month will pay P0.42 more per day starting Jan. 1 next year.
Manila Water will begin implementing on Jan. 1 a 6.4 percent consumer price index (CPI) adjustment and a foreign currency differential adjustment (FCDA) of 0.73 percent of basic charge, as recommended by the Metropolitan Waterworks and Sewerage System.
For low-income residential customers consuming 10 cubic meters per month, the increase will be P0.09 centavos per day, Manila Water said.
Manila Water said the new rates include the annual adjustment due to the CPI as of July 2006, based on official information from the National Statistics Office. However, due to the continuing strength of the peso versus other currencies, coupled with proper management of borrowings by the company, there will also be a reduction in FCDA that will temper the increase.
The FCDA allows Manila Water and Maynilad to recover losses from the peso depreciation as it pays off dollar-denominated concession fees to the MWSS and for other loans they acquired to fund service expansion and improvement of pipelines. It is computed quarterly, depending on the rate of peso depreciation against the US dollar.
Manila Water earlier signed a $30-million standby credit facility with the International Finance Corp. to be used for financing capital expenditures over the next three years.
It also secured a P1.5-billion loan facility from several financial institutions for its massive capital investment program within Metro Manila’s east zone. Through this peso-denominated loan, the company will be able to take advantage of the improving domestic borrowing rates.
Manila Water plans to spend P4 billion to P5 billion every year in the next five years to improve its services.
A large part of the capital expenditure budget will be used to extend the water network to the high growth areas of Taguig, Antipolo, Taytay, Cainta, San Mateo, Montalban, Angono, Binangonan, Baras and Jalajala.
Manila Water has also allocated a large amount of money to improve sewer and sanitation services.
For the past nine years, Manila Water has invested a total of P19 billion in capital expenditure and concession fees to improve the water and wastewater services in the east zone. Through its continuing pipe replacement program, the company has reduced system losses to 30.2 percent as of June 2006, from a high of 63 percent when it started in 1997.