Government ordered to pay Manila Water P7.39 billion

MANILA, Philippines — An international arbitral court has ordered the Philippine government to pay the Ayala-led Manila Water Co. P7.39 billion in indemnification for losses incurred after being barred from raising rates.

The Permanent Court of Arbitration in Singapore issued the ruling, according to Manila Water.

“The Tribunal ruled that Manila Water has a right to indemnification for actual losses suffered by it on account of the Republic’s breach of its obligation,” it said.

The P7.39 billion represents the actual losses Manila Water suffered from June 1, 2015 to Nov. 22, 2019.

The tribunal also ordered the government to pay 100 percent of the amounts paid by Manila Water to the PCA and 85 percent of Manila Water’s other claimed costs.

Manila Water said it will work with the government for an orderly and managed implementation of the decision.

The Metropolitan Waterworks and Sewerage System (MWSS0, which approves or rejects water rate adjustments, refused to comment as the case is against the national government.

The water firm sued the government after losing a case filed in 2015 by MWSS, which rejected its plea for rate hike.

It was in 2015 when MWSS won the case filed by Manila Water against it so the water firm decided to instead sue the Philippine government.

In rejecting Manila Water’s rate hike petition, the MWSS disallowed the recovery of corporate income tax (CIT), saying CIT is not supposed to be recoverable because the concessionaire is a public utility.

The disallowance of the CIT recovery translated to P2.77 per cubic meter downward adjustment.

The Manila Water ruling came more than two years after the arbitral tribunal ruled on a similar case filed by the Pangilinan-led Maynilad Water Services Inc.

The same tribunal ordered the Philippine government in July 2017 to reimburse Maynilad P3.4 billion for losses from March 2015 to August 2016, and ruled that Maynilad is allowed to recover its losses from September 2016 onwards.

Maynilad has yet to receive indemnification from the government for the case it won in 2017.