Consumers to see lower water bills as VAT removed

CUSTOMERS of Maynilad Water Services, Inc. and Manila Water Co., Inc. will see lower bills starting this month due to the removal of the 12% value-added tax (VAT), the regulator said on Thursday.

The Metropolitan Waterworks and Sewerage System Regulatory Office (MWSS-RO) said customers’ bills will instead include a 2% national franchise tax and the actual rate of the local franchise tax.

“These changes will result in a reduction in Maynilad and Manila Water customers’ monthly water bills,” MWSS Chief Regulator Patrick N. Ty said at a virtual briefing.

This after Manila Water and Maynilad were granted new legislative franchises to maintain and operate the waterworks systems in their respective concession areas.

“If you have a franchise, you are subject to the franchise tax instead of VAT,” Mr. Ty said, noting the tax rate is determined by local government units (LGUs).

These changes will be reflected as “government tax,” which will range between 2% and 2.85% depending on the LGU.

Mr. Ty said Manila Water and Maynilad customers will see these changes in their bills starting March 21, the date of the effectivity of the two companies’ legislative franchises.

If the government tax rate is at 2%, Maynilad customers consuming 10 cubic meters (cu.m.) will pay P118.78 a month, which is P11.64 less than their current P130.42 monthly bill with the 12% VAT.

On a government tax rate of 2.825%, customers will pay P119.74 a month, a reduction of P10.68 from the previous bill.

Maynilad customers using 20 cu.m. a month will see a reduction of between P40.04 and P43.64 in their bills, while those using 30 cu.m. will pay P81.75 to P89.10 less every month.

Manila Water customers using 10 cu.m. every month will pay P138.40 if the government tax rate is 2%, and P138.83 if the rate is 2.825%, reflecting an average reduction of P12 from the current P151.22 bill.

Low-income households in the Manila Water concession area will see an average reduction of P7 in their monthly bills, while those consuming 20 cu.m. will pay around P27 to P28 less a month. Customers using 30 cu.m. will see bills lowered by P55 to P57 a month.

“The MWSS remains committed to ensuring the availability, accessibility, and affordability of water supply in the East and West Concession Areas,” the agency said.

Maynilad supplies water to customers in the west zone, comprised of Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas, Malabon, Manila, Makati, and Quezon City, as well as parts of Cavite province.

Manila Water provides water and wastewater services in the east zone of Metro Manila, which includes Marikina, Pasig, Taguig, Makati, San Juan, Mandaluyong, portions of Quezon City and Manila, and Rizal province.

Metro Pacific Investments Corp., which has a majority stake in Maynilad, is one of three 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 an interest in BusinessWorld through the Philippine Star Group, which it controls. — Luisa Maria Jacinta C. Jocson