Manila Water Company, Inc. (Manila Water) is allowed to raise water rates only in 2023 under the new concession agreement, Justice Secretary Menardo I. Guevarra said on Monday, April 5.
“Wala tayong magiging increase, meaning water rates or tariffs, until Dec. 31 of 2022 on consideration for the existing situation natin (There will be no water rates increase until Dec. 31, 2022),” he said during the press briefing hosted by Malacanang.
“Next possible adjustments sa ating water rates will happen in 2023 (The next possible adjustments will happen in 2023),” he added.
Last March 31, Manila Water signed the new water concession deal with the government represented by the Metropolitan Waterworks and Sewerage System (MWSS).
“Definitely the revised water concession agreement will be beneficial to the consumers because this concession has been deemed as a public utility and therefore all the things associated with an enterprise being considered a public utility will now be applied to this water concession agreement,” Guevarra said.
Among the new provisions, he said, is that the water rates will only be based on two thirds and not the entire consumer price index, and will no longer be determined by the foreign exchange rates.
“One very important feature of the revised agreement is on the matter of corporate income tax which used to be part of the expenditures being passed on by the concessionaire to the consuming public. Now definitely hindi na siya kasama na maicha-charge (It is no longer added as among those being charged),” he said.
Also, he said, the most important feature of the new agreement is the removal of the non-interference clause which prevents the government from having a say in water rates.
“But here in the revised agreement wala na yang ganyang possible penalties or prohibition on the national government from interfering (there are no more penalties or prohibition against the government from interfering),” he said.
“So, kung ang tingin ng national government hindi makakabuti sa mga consumers ang let’s say ang water rates na ini-impose ng water concessionaire, hindi makatarungan, hindi fair, hindi equitable, then the national government may enter the picture, may put its foot down and intervene if necessary without fear of getting penalized or getting sued for such intervention (So, if the national government finds that the water increase imposed by the water concessionaire is not just, fair, equitable, then the national government may enter the picture, put its foot down and intervene without fear of getting sued for such intervention),” he explained.
Because of this onerous provision in the previous agreements, Guevarra recounted that Manila Water and Maynilad Water Services, Inc., the other water concessionaire in Metro Manila and nearby provinces, was able to sue the government for around P11 billion before the Permanent Court of Arbitration in Singapore.