Malacañang has directed the Metropolitan Waterworks and Sewerage System (MWSS) to explain why it granted a rate increase for Metro Manila’s two water utility firms in spite of President Arroyo’s instruction to hold off any increases this year.
Executive Secretary Eduardo Ermita appeared to be surprised about the rate increase that was announced by Maynilad Water Services Inc. and Manila Water Company Inc. that was approved by the MWSS.
The Ayala-owned Manila Water has announced that it will increase its rates by P2.27 per cubic meter while the Lopez-owned Maynilad will hike its rates by an average of P2.81 per cubic meter.
According to the two concessionaires, the rate increase would cover adjustments in foreign currency and inflation.
Ermita said the President made it clear that as much as possible, the MWSS should not allow any increase in the water rates.
At the start of the year, the MWSS vowed there would be no water rate increases this year in deference to the effects of the prolonged global financial crisis on the country.
Ermita said any move by the regulatory agency to approve a rate increase for the two utilities should go through the Palace for perusal by the President.
“If there is a such a need (to increase the rates), they should submit a position paper to the Office of the President, which will be a basis of the guidance coming from the President. They cannot increase by themselves. This is an instruction given by the President,” Ermita said.
“I think we should consider the economic situation that we are in right now,” he added.
Ermita said that the MWSS should justify to the Palace the rationale behind its approval of the rate increase.
“We have to consider the concern of the greater majority of the people. Water is a basic commodity,” Ermita said.
When the MWSS announced its decision to suspend rate hikes for this year, the two concessionaires immediately asked the body to reconsider.
The two firms said they need to increase their rates to finance their capital expenditures in order to ensure the continuous and efficient delivery of the service to their customers.
At the time, MWSS administrator Diosdado Allado said “there will be no increase in the rates in all the service areas covered by the MWSS at least for this year.”