Water bills to go down in first quarter of 2021

Metro Manila consumers will see lower water bills in the first quarter of 2021. — PHILIPPINE STAR/MICHAEL VARCAS

By Revin Mikhael D. Ochave, Reporter

CUSTOMERS of the two water concessionaires in Metro Manila will experience lower monthly bills for the first quarter of 2021, according to the regulatory office of the Metropolitan Waterworks and Sewerage System (MWSS).

In a virtual briefing on Wednesday, MWSS Chief Regulator Patrick Lester N. Ty said the agency’s board of trustees has approved the implementation of the foreign currency differential adjustment (FCDA) for the first quarter, after a review of the proposals made by Manila Water Co., Inc. and Maynilad Water Services, Inc.

Mr. Ty said the FCDA adjustment will be effective from Jan. 1 to March 31, 2021.

East zone water provider Manila Water will apply an FCDA of 0.66% or P0.19 per cubic meter (/cu.m.) of its average basic charge of P28.52/cu.m.

This translates to a P0.14/cu.m. decrease from the previously set FCDA of P0.33/cu.m. in the fourth quarter.

Residential customers of Manila Water who consume 10 cu.m. or less will see a reduction of P0.76 in their monthly bills, while those who consume 20 cu.m. and 30 cu.m. will see their bills go down by P1.69 and P3.45 per month, respectively.

For west zone water provider Maynilad, the approved FCDA will be -0.39% or –P0.14/cu.m. of its average basic charge of P36.24/cu.m.

It is equivalent to a P0.05/cu.m. decrease than the previous quarter’s FCDA of –P0.09/cu.m.

Maynilad customers who consume 10 cu.m. or less will get a P0.05 reduction in their monthly water bills.

Meanwhile, those who use 20 cu.m. and 30 cu.m. will see a decline of P0.64 and P1.30 in their monthly water bills, respectively.

The MWSS announcement is welcome news for consumers after Maynilad and Manila Water said they will not implement water rate hikes in 2021.

In November, both water concessionaires deferred their respective water rate increases for 2021 under the rate-rebasing adjustment approved by the regulatory office of the MWSS, as part of efforts to help customers amid the coronavirus disease 2019 (COVID-19) pandemic.

In 2021, Maynilad was supposed to implement a P1.95/cu.m. increase in its basic charge while Manila Water was set to impose a price hike of P2/cu.m.

Under the current five-year rebasing period, Manila Water is eligible to increase rates by P6.22 to P6.55/cu.m., while Maynilad is allowed to increase rates by P5.73/cu.m.

The rate hikes will be implemented in tranches through 2022.

The two concessionaires also waived their respective rate increases this year, after they drew the attention of President Rodrigo R. Duterte regarding the “onerous” provisions in the concession agreement with the government.

Mr. Ty said the rate adjustments will be deferred to the next rate rebasing period.

“The failure to implement any tariff adjustment will push the tariff upwards in the next rate rebasing. But it is not automatic that it will have an upward adjustment. It is just a pressure to push it up,” Mr. Ty said.

“We also have the option of spreading it out in the next rate-rebasing,” he added.

The FCDA is a tariff mechanism which allows water concessionaires to regain losses or return gains caused by the movement of the peso against other foreign currencies.

The water providers pay foreign currency-denominated concession fees to MWSS, as well as loans that are used to fund projects to expand and improve water and sewerage services.

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