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Water rates to go up

Posted on December 17, 2012

CONSUMERS SHOULD expect their water bills to go up next year as rate adjustments have been approved by regulators for Manila Water Co., Inc. and Maynilad Water Services, Inc.

"The customers of the east zone and west zone water utilities will have to expect an increase ... which will be implemented in January and will be reflected in their February bills," Metropolitan Waterworks and Sewerage System (MWSS) Administrator Gerardo A. I. Esquivel yesterday said.

"This in the context of our concession agreements ... [that allow for] movements in the foreign currency differential adjustments (FCDA) and consumer price index (CPI). These are reflected in a tariff table approved [earlier this month] by MWSS," Mr. Esquivel said.

Notices of the adjustments were published last Saturday. To be affected are customers of Manila Water, which services the east zone area of Mandaluyong, Pasig, San Juan, Marikina, Pateros, Taguig, Makati, Balara and Cubao in Metro Manila along with several towns of Rizal province; and Maynilad, which holds the west zone area of Manila, Quezon City, Makati, Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon, all in Metro Manila, plus the municipalities of Bacoor, Imus, Kawit, Noveleta and Rosario in Cavite province.

A 3.2% CPI adjustment will be applied to both utilities’ 2012 basic water charge, to take effect 15 days after the notices’ publication. For Manila Water, a reduction in its FCDA to 1.23% will also be implemented, while Maynilad’s "will be negative 0.51% of the 2013 basic charge."

The MWSS Regulatory Office recommended the CPI adjustments for Manila Water and Maynilad on Nov. 28 and Dec. 3, respectively, which were approved by the MWSS board on Dec. 7. The FCDA changes were proposed last Thursday and board gave its approval a day after.

The published notices included a detailed schedule of the new rates. The increase for the average consumer -- those who use 30 cubic meters every month -- will be P6 for Manila Water and P22.52 for Maynilad, spokespersons for the utilities yesterday said.

"Our customers who consume 30 cubic meters will be charged P625 from the current P619," Manila Water corporate communications head Jeric T. Sevilla, Jr. said.

His counterpart at Maynilad, Cherubim O. Mojica, said customers "who consume 30 cubic meters will have to pay P851.24, up from the current P828.72."

Mr. Sevilla said Manila Water customers in the low-income category -- those who consume 10 cubic meters per month or less -- will see their bills rise to P83 from P81, while those using 20 cubic meters can expect a P3 increase to P307.

For Maynilad, those in the lifeline category -- also 10 cubic meters or less per month -- will have to pay P119.62 from P106.71, while the 20 cubic-meter-consumption class will have to shell out P424.22, up from P413.25.

The FCDA is a tariff mechanism formulated to account for foreign exchange losses or gains arising from the payment of concession loans and foreign currency-denominated borrowings of the MWSS and the utilities. The FCDA is adjusted quarterly while the CPI is considered annually, Mr. Esquivel said.

"Besides the basic water charge, customers also pay an environmental charge, sewerage charge, maintenance service charge and [a 12%] value-added tax," he added.

Ayala-owned Manila Water saw its net income rise by 26% to P3.936 billion as of September. The listed firm saw its shares shed 45 centavos or 1.41% to close at P31.55 apiece last Friday.

Maynilad, which DMCI Holdings, Inc. and Metro Pacific Investments Corp. (MPIC) took over in 2007 after a steep debt burden forced the Lopez group -- the original concessionaire -- to give it back to the government, saw its net profit grow by 19% to P5.093 billion in the same period.

MPIC shares closed Friday at P4.49 apiece, down 0.88% or four centavos, while DMCI Holdings closed at P52.90 per share, up 0.28% or 15 centavos. -- Claire-Ann Marie C. Feliciano