MWSS admits consumers paying Maynilad, Manila Water taxes

MANILA, Philippines - Metropolitan Waterworks and Sewerage System (MWSS) Administrator Gerardo Esquivel admitted Wednesday that consumers have been shouldering Maynilad's and Manila Water's corporate taxes for the past six years.

Esquivel confirmed the findings of IBON Foundation's Water for the People Network (WPN) that the two water Concessionaires' customers are shouldering an estimated P3.1 billion in corporate taxes yearly since 2008.

The foundation said that the P3.1 billion is divided between the taxes of Manila Water amounting to P1.5 billion annually and Maynilad's P1.6 billion.

"Anim na taon na pong kinukumbra ng Maynilad at Manila Water 'yung income tax at 'yung binabayad nila at ipinapasa nila sa consumer," Esquivel said in a radio interview.

The MSWW executive, meanwhile, said that the two water concessionaires have been very transparent with the customers. He said that the payment of the corporate taxes is reflected in the consumers' billing records.

"Hindi naman po siguro 'yun sinasadyang itago kundi ganoon lang po talaga 'yung framework ng billing natin. Wala naman po akong nakikitang desire to hide that fact," Esquivel said.

The official also maintained that the MWSS has been working on minimizing the consumers' burdens if not scrapping the scheme altogether.

"Tinitignan po natin kung meron pong paraan para tanggalin 'yan at kung meron man, tignan nang maayos para maging seamless ang implementation nito," he said.

The WPN's report released on Monday indicated that the two water firms are still proposing to pass on the taxes to the consumers for the next five years.

"Manila Water is seeking a Php5.83 per cubic meter (cu. m.) increase in its basic charge and Maynilad, Php8.58 for 2013-2018," the report noted.

The group said that the scheme does not only provide tax relief to the two water concessionaires, it is also profitable for the two firms.

"A guaranteed rate of return called appropriate discount rate or ADR is applied on the pass-on income taxes as part of the (operating expenses or opex)," WPN said.

The report, which the WPN says is "based on documents obtained by research group IBON," also accused Maynilad of retaining the pass-on income tax scheme even as the the government has granted them a tax holiday.

"In the case of Maynilad, this is even a triple whammy because the Manny Pangilinan-led firm enjoys an income tax holiday but still included corporate income taxes in its opex, further bloating its profits," it said.

Esquivel confirmed such findings, saying that both firms were indeed granted a tax holiday in 2009 while still making consumers pay for supposed corporate taxes.

"Huwag po kayong mag-alala. Talaga pong masinop ang kanilang pag-audit at pagbalanse ng dalawang interes na ito," Esquivel said.