Reduced water rates seen next month

MANILA, Philippines — Customers of water concessionaires Maynilad Water Services Inc. and Manila Water Co. Inc. will see lower water bills at the start of 2021.

At a virtual briefing yesterday, the Metropolitan Waterworks and Sewerage System-Regulatory Office (MWSS-RO) said the MWSS Board of Trustees has approved the recommendation to reduce tariffs based on the first quarter foreign currency differential adjustment (FCDA) for both concessionaires.

This means that a rollback would be implemented for the January to March 2021 period for both water firms.

MWSS chief regulator Patrick Ty said the Philippine peso keeps on appreciating versus other foreign denominations like the US dollar and Japanese yen, thus the reduction.

Maynilad’s decrease is equivalent to P0.05 per cubic meter while that of Manila Water is a decrease of P0.15 per cu.m. of its basic charge.

Manila Water customers who consume up to 10 cu.m. per month would have a rollback of P0.76 per month while those consuming an average of 20 cu.m. would have a downward adjustment of P1.69.

Customers using 30 cu.m. would see a rollback of about P3.54.

Meanwhile, Maynilad residential customers consuming an average of 10 cu.m. or less every month would have a rollback of P0.05 per month while those consuming 20 cu.m. would have a P0.64 decrease in their water bills.

Those using more than 30 cu.m. would experience a decrease of P1.30 per month.

Adjusted rates for both Maynilad and Manila Water would be effective starting Jan. 1.

FCDA is the tariff mechanism granted to utility companies to allow them to recover losses or give back gains arising from the fluctuating movement of the peso against other currencies, as the concessionaires pay foreign-dominated fees as well as loans to fund projects that will improve service for their customers.

Gains and losses could arise from the payment of concession loans and foreign currency-denominated debt whose proceeds are used to improve services.

Maynilad is the largest private water concessionaire in the country in terms of customer base. It serves the areas of Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas, Malabon, and certain portions of Manila, Quezon City, Makati and Cavite.

Manila Water, on the other hand, caters to the East Zone that covers parts of Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig, Marikina, most parts of Quezon City, portions of Manila, as well as several towns in Rizal.

The government will begin the preparatory process for the mandatory rate rebasing as early as next year so as to avoid delay in determining the acceptable tariff increase or decrease to be passed on to consumers by 2022.

At a virtual briefing Wednesday, the MWSS-RO said the agency will begin the preliminary process for the mandatory five-year rate rebasing by 2021 to ensure that the public is protected.

MWSS’s Ty said that based on the concession agreement, a rate rebasing determines the level of rates for water and sewerage services that permits both concessionaires to recover over the life of the concession period its operating, capital maintenance and investment expenditures.

It was in 2018 when MWSS approved the rate rebasing, which would last until 2022 and which resulted in a total hike of P5.73 per cu.m. for Maynilad and P6.22 to P6.50 per cu.m. for Manila Water.

The increases were supposed to be implemented in four tranches with the first one set in October 2018.

Starting next year, Ty said MWSS-RO will prepare the terms of reference and start bidding for certain contracts including high-level consultants, international experts and auditing firm who will check the books of the concessionaires.