MANILA, Philippines - After recently telling its customers to expect higher water rates in July, Maynilad Water Services announced yesterday that it would be lowering its rates instead after converting its dollar-denominated debts into peso-denominated loans.
The west zone water concessionaire said the rate cut takes effect on July 6 until Dec. 31, after which another review of the rates would be made.
The company explained that a rate cut was made possible after a successful refinancing of $120-million worth of loans by converting these into peso-denominated loans.
The refinancing was completed in March but the Metropolitan Waterworks and Sewerage System approved the rate adjustment only yesterday.
On June 17, Maynilad announced a P0.17 per cubic meter upward adjustment in its rates beginning July 3 due to the weakening of the peso against other foreign currencies particularly the US dollar.
Yesterday, Maynilad said it gained P978 million from the refinancing transaction, which has made possible a rate adjustment of P4.96 per cubic meter.
With the Foreign Currency Differential Adjustment announced recently factored in, the total rate adjustment is at P4.79 per cubic meter.
From P46.56 per cubic meter in the second quarter, water rate is set to go down to P41.77 per cubic meter or a reduction of around 10.3 percent.
In effect, households consuming 10 cubic meters or less every month will see their water bill decrease from P119.12 to P108.11, while the water bill of those consuming 20 cubic meters will go down from P422.35 to P380.63.
Meanwhile, residential customers consuming 30 cubic meters a month will save P85.32, because their water bill will be reduced from the current P847.42 to P762.09.
The downward adjustment will be reflected in August 2013 to January 2014 water bills of Maynilad customers.
Under its concession agreement with the government, Maynilad must pass on to customers its foreign exchange gains or losses arising from the payment of its foreign-denominated loans as well as concession fees to MWSS.
The company said the adjustment is revenue neutral and has no impact on the projected net income of Maynilad.