Maynilad to increase rates in Q2

Published March 12, 2020, 12:00 AM

by manilabulletin_admin

By Madelaine B. Miraflor

Metropolitan Waterworks and Sewerage System (MWSS) is allowing Maynilad Water Services, Inc. to slightly increase its water rates for the next three months as part of the quarterly Foreign Currency Differential Adjustment (FCDA).

MWSS Chief Regulator Patrick Lester Ty said on Thursday that the MWSS Board of Directors has already approved the implementation of the 2020 second quarter FCDA for both Maynilad and Manila Water, but only the former will be increasing rates while the latter applied for downward rates adjustment.

Approved every quarter, FCDA is a tariff mechanism that will allow concessionaires to recover or compensate for fluctuations in foreign exchange rates.

This, as gains and losses can arise from the payment of concession loans and foreign currency-denominated debt whose proceeds are used to improve services.

To be specific, Maynilad will implement an FCDA of negative 0.21 percent of its 2020 Average Basic Charge of P36.24 per cubic meter (/cu.m) or negative P0.08/cu.m. This is an upward adjustment of P0.05/cu.m compared to the first quarter 2020 FCDA of negative P0.13/cu.m.

As a result, starting April 1, Maynilad customer consuming 10 cubic meters or less will see their monthly bills go up by P0.18, while the monthly bills of those consuming 20 cubic meters per month and 30 cubic meters per month will increase by P0.69 and P1.40, respectively.

Maynilad provides water and wastewater services to residents in most parts of Manila; northern and western parts of Quezon City; western parts of Makati; and the Cities of Caloocan, Pasay, Parañaque, Las Piñas, Valenzuela, Muntinlupa, Navotas, and Malabon in Metro Manila.

It also serves the Municipalities of Meycauayan and Obando in the Province of Bulacan; and the Cities of Cavite, Bacoor and Imus, and Municipalities of Kawit, Noveleta, and Rosario in the Province of Cavite.

Manila Water, on the other hand, will implement an FCDA of 1.69 percent of its Average Basic Charge of P28.52/cu.m or P0.48/cu.m. This is an downward adjustment of P0.21/cu.m compared to the first quarter 2020 FCDA of P0.69/cu.m.

The impact of this to Manila Water residential customers consuming 10 cubic meters or less, except lifeline customers, are expected to have a decrease on their monthly bills of P1.11 per month.

Meanwhile, those Manila Water customers consuming 20 cubic meters per month and 30 cubic meters per month will go down by P2.46 and P5.02 respectively. Manila Water lifeline customers are exempt from the quarterly FCDA charges.

Manila Water provides water and wastewater services primarily to the East Zone concession area covering the Cities of Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig and Marikina. It is also in charge of the southeastern parts of Quezon City, and Sta. Ana and San Andres in Manila. In the Province of Rizal, MWCI services the City of Antipolo and Municipalities of San Mateo, Rodriguez, Cainta, Taytay, Teresa, Angono, Baras, Binangonan, and Jala-jala.

The newly approved FCDA, which is part of Manila Water and Maynilad’s respective concession agreements with MWSS, came after the the rate adjustments scheduled for the entire year as well for the first quarter of 2020 have both been deferred.

These adjustments are the first quarter FCDA as well as the next tranche of annual rate hikes approved under the five-year rate rebasing, which is a review of the water utilities’ past performance and the projection on their future cash flows.

Done every five years, the review is supposed to set the water rates at a level that will allow both Maynilad and Manila Water to recover their expenditures and earn a rate of return.

Such postponement in water rates adjustments came as Maynilad and Manila Water both became the subject of President Rodrigo Duterte’s ire as well as their allegedly onerous contracts with the MWSS.

The review on these contracts is now on-going.