Maynilad Water Services, Inc. (Maynilad) and Manila Water Company, Inc. are forgoing some water rate increases they are qualified to implement in the coming year, including the next tranche of the rate rebasing adjustment as well as the mandated Consumer Price Index (CPI) adjustment.
This was announced separately by both companies on Tuesday.
In a text message, Metropolitan Waterworks and Sewerage System (MWSS) Chief Regulator Patrick Ty said the MWSS-Regulatory Office (MWSS-RO) has been discussing this matter with both Maynilad and Manila Water since the start of this year.
“We just received the proposals of the two Concessionaires and we are currently evaluating them,” Ty said.
In a statement, Maynilad said that with this deferral, the company “hopes to alleviate the day-to-day struggles of its customers as they and the whole country strive to recover from adversity and rise stronger than before, ready to start anew”.
"During these difficult times when no one is spared the economic impact of the COVID-19 pandemic, Maynilad is one with the government in finding ways to help our countrymen make the situation more manageable," it also said.
Manila Water, on the other hand, said “in the spirit of Bayanihan and to alleviate the plight of our customers due to the pandemic, Manila Water will not be implementing the rate adjustment in 2021 under the approved 2018 Rate Rebasing.”
Done every five years, rate rebasing is review of water utilities' past performance and the projection on their future cash flows.
It is supposed to set the water rates at a level that would allow both Maynilad and
Manila Water to recover their expenditures and earn a rate of return.
For 2020, Maynilad and Manila Water also volunteered to defer the implementation of the next tranche of annual rate hike approved under the current rate rebasing period, which started in 2018.
Their decision came as both companies were being scrutinized by no less than President Rodrigo Duterte for their allegedly onerous contracts with MWSS.
To be implemented in tranches from 2018 to 2022, the approved increase in Maynilad's rates under the fifth rate rebasing period would be P5.73 per cubic meter (/cu. m.).
For this year, it was supposed to increase its rates by P1.95/cu.m, then another P1.95/cu.m in 2021.
As for Manila Water, the increase in its rates under rate rebasing would play around P6.22 to P6.55/cu.m.
This year, it was supposed to increase its rates by P2/cu.m, and another P2/cu.m by 2021.
By 2022, depending on the medium-term water sources project that the company will be allowed to pursue, the Ayala-led firm could charge its customers an increase of P0.76/cu.m up to P1.04/cu.m.
The CPI adjustment, on the other hand, is the annual inflation adjustment and takes place every January.
Maynilad is the largest private water concessionaire in the Philippines in terms of customer base.
It is the agent and contractor of the Metropolitan Waterworks and Sewerage System (MWSS) for the West Zone of the Greater Manila Area, which is composed of the cities of Manila (certain portions), Quezon City (certain portions), Makati (west of South Super Highway), Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon all in Metro Manila; the cities of Cavite, Bacoor and Imus, and the towns of Kawit, Noveleta and Rosario, all in Cavite Province.
Meanwhile, Manila Water caters 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.