Economy



By Mikhail Franz E. Flores, Reporter


DoF awaits legal advice on Maynilad




Posted on April 15, 2015


THE PHILIPPINE government will honor its contractual obligations to Maynilad Water Services, Inc. with respect to tariff adjustments, but the Department of Finance (DoF) is still awaiting legal advice before its next move, Secretary Cesar V. Purisima said.

Maynilad workers distribute water from a truck. -- BW File Photo
“They wrote a letter, and we sent the letter to Solicitor General. Because the DoF issued the performance undertaking, the issue is whether that’s part of the coverage,” Mr. Purisima told reporters on the sidelines of an event in Makati City yesterday.

“The lawyers... (will) have to guide us on how to address all these. But the important thing is we’re going honor whatever the government’s responsibilities are under the performance undertaking,” he added.

The Metropolitan Waterworks and Sewerage System held off on a tariff adjustment approved in December last year by the International Court of Arbitration of the International Chamber of Commerce at the conclusion of an earlier arbitration process that began in 2013. The MWSS opted to wait for the outcome of its rate dispute with another concessionaire, Manila Water Company, Inc., to ensure consistency in implementation.

Maynilad sought arbitration last month over the government’s refusal to pay P3.44 billion, representing estimated losses arising from the deferred implementation of the utility’s tariff increase.

Metro Pacific Investments Corp. (MPIC) and DMCI Holdings, Inc. hold 52.8% and 25.24% interests, respectively, in Maynilad. Japan’s Marubeni Corp. holds a 20% stake, while the balance is held by other shareholders.

MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld.