Tolentino urges Senate to investigate ‘onerous’ water contracts

Published December 9, 2019, 10:42 PM

by Ellalyn De Vera & Richa Noriega

By Vanne Elaine Terrazola

Senator Francis Tolentino on Monday called on the Senate to investigate the government’s contracts with Manila Water Company, Inc. and Maynilad Water Services, Inc.

Senator Francis "Tol" N. Tolentino (Senator Francis Tolentino official Facebook page / MANILA BULLETIN)
Senator Francis “Tol” N. Tolentino
(Senator Francis Tolentino official Facebook page / MANILA BULLETIN)

In his privilege speech, Tolentino slammed the concession agreements entered into by the government with the two Metro Manila water concessionaires, contracts which President Rodrigo Duterte called “onerous”.

Describing it as a form of “modern-day slavery” of Filipinos, the neophyte senator said the Senate should conduct an inquiry in aid of legislation on the water deals after the Singapore-based Permanent Court of Arbitration ordered the government to pay the two water distributors more than P10 billion for the losses they incurred due to a rate dispute.

Tolentino enumerated the provisions of the agreements that are deemed disadvantageous to the government, citing among others the section which allows the concessionaires to pass on operating expenses, business taxes, and payments to consumers.

He said Manila Water and Maynilad, according to their financial statements, charged its consumers a total of P20 billion for its expenditures in 2018. Aside from this, he said the two water distributors also included in consumers’ bills their corporate income taxes: around P2.8 billion for Maynilad and some P2 billion for Manila Water.

“In effect, it is as if these concessionaires are charging their consumers consumption tax — which is defined as the tax levied on consumption spending on goods and services or percentage tax — which is generally considered regressive, contrary to Section 28, Article 6 of the 1987 Constitution which provides that the system of taxation shall be progressive,” Tolentino said.

He also noted that the Supreme Court ruled that public utilities are prohibited from recovering corporate income tax as operating expenses, and thus they cannot pass this off to their consumers.

The senator said the water companies have also been “earning substantially” more than the cities they serve. In 2018, Maynilad reported an income of P10.3 billion, while the local government units they serve like Caloocan City and Pasay City earned P2.2 billion and P2.1 billion respectively, including their shares from the Internal Revenue Allotment.

Manila Water, meanwhile, reported a total income of P8.6 billion, while the LGUS they serve such as Pasig, Taguig, and Antipolo earned P6.9 billion, P5.5 billion, and P1.4 billion respectively.

“What we have here is not just a breach of contract, fraud, or even robbery, but what we have is a modern-day slavery where the Filipino people become like slaves for water similar during the Roman times when salt is as rare as a precious item,” Tolentino said.

Like Duterte, Tolentino also questioned the provisions barring the government from interfering with rate adjustments and waiving its right to appeal.

He also objected to sections of the concession agreement which prohibit the government from taking actions to stop or declare illegal the transactions included in the deal, as well as from investigating the breaches that might be committed by the concessionaires.

He said the provisions violate the Constitution, which, for instance, grants the Senate oversight powers and the authority to conduct legislative inquiries.

The government is not inclined to pay the P10 billion reimbursement to the two water concessionaires and even threatened to sue the government and company officials who crafted the onerous deals.

Tolentino said he hopes that Manila Water and Maynilad will cooperate with the government in coming up with a fair agreement.

“We hold them to their words – that they will, in good faith, work out an agreement with the government wherein the public welfare is upheld and protected. Let the one who has ‘palabra de honor’ (word of honor) keep to his promise in view of the expectations such promise has already created,” he said.

 
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Tolentino urges Senate to investigate ‘onerous’ water contracts

Published December 9, 2019, 12:00 AM

by manilabulletin_admin

By Vanne Elaine Terrazola

Senator Francis Tolentino on Monday called on the Senate to investigate the government’s contracts with Manila Water Company, Inc. and Maynilad Water Services, Inc.

Senator Francis "Tol" N. Tolentino (Senator Francis Tolentino official Facebook page / MANILA BULLETIN)
Senator Francis “Tol” N. Tolentino
(Senator Francis Tolentino official Facebook page / MANILA BULLETIN)

In his privilege speech, Tolentino slammed the concession agreements entered into by the government with the two Metro Manila water concessionaires, contracts which President Rodrigo Duterte called “onerous”.

Describing it as a form of “modern-day slavery” of Filipinos, the neophyte senator said the Senate should conduct an inquiry in aid of legislation on the water deals after the Singapore-based Permanent Court of Arbitration ordered the government to pay the two water distributors more than P10 billion for the losses they incurred due to a rate dispute.

Tolentino enumerated the provisions of the agreements that are deemed disadvantageous to the government, citing among others the section which allows the concessionaires to pass on operating expenses, business taxes, and payments to consumers.

He said Manila Water and Maynilad, according to their financial statements, charged its consumers a total of P20 billion for its expenditures in 2018. Aside from this, he said the two water distributors also included in consumers’ bills their corporate income taxes: around P2.8 billion for Maynilad and some P2 billion for Manila Water.

“In effect, it is as if these concessionaires are charging their consumers consumption tax — which is defined as the tax levied on consumption spending on goods and services or percentage tax — which is generally considered regressive, contrary to Section 28, Article 6 of the 1987 Constitution which provides that the system of taxation shall be progressive,” Tolentino said.

He also noted that the Supreme Court ruled that public utilities are prohibited from recovering corporate income tax as operating expenses, and thus they cannot pass this off to their consumers.

The senator said the water companies have also been “earning substantially” more than the cities they serve. In 2018, Maynilad reported an income of P10.3 billion, while the local government units they serve like Caloocan City and Pasay City earned P2.2 billion and P2.1 billion respectively, including their shares from the Internal Revenue Allotment.

Manila Water, meanwhile, reported a total income of P8.6 billion, while the LGUS they serve such as Pasig, Taguig, and Antipolo earned P6.9 billion, P5.5 billion, and P1.4 billion respectively.

“What we have here is not just a breach of contract, fraud, or even robbery, but what we have is a modern-day slavery where the Filipino people become like slaves for water similar during the Roman times when salt is as rare as a precious item,” Tolentino said.

Like Duterte, Tolentino also questioned the provisions barring the government from interfering with rate adjustments and waiving its right to appeal.

He also objected to sections of the concession agreement which prohibit the government from taking actions to stop or declare illegal the transactions included in the deal, as well as from investigating the breaches that might be committed by the concessionaires.

He said the provisions violate the Constitution, which, for instance, grants the Senate oversight powers and the authority to conduct legislative inquiries.

The government is not inclined to pay the P10 billion reimbursement to the two water concessionaires and even threatened to sue the government and company officials who crafted the onerous deals.

Tolentino said he hopes that Manila Water and Maynilad will cooperate with the government in coming up with a fair agreement.

“We hold them to their words – that they will, in good faith, work out an agreement with the government wherein the public welfare is upheld and protected. Let the one who has ‘palabra de honor’ (word of honor) keep to his promise in view of the expectations such promise has already created,” he said.

 
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