THE METROPOLITAN Waterworks and Sewerage System Regulatory Office (MWSS) has given the go signal for two Metro Manila water concessionaires to adjust rates in the second quarter.
MWSS Chief Regulator Patrick Lester N. Ty said in a briefing the board of trustees approved the implementation of a foreign currency differential adjustment (FCDA) for the April to June period, after reviewing the proposals of Manila Water Co., Inc. and Maynilad Water Services, Inc.
Manila Water, concessionaire for the east zone, will apply an FCDA of 0.84% of its average basic charge of P28.52 per cubic meter (cu.m.) or P0.24 per cu.m. This translates to an increase of P0.05 per cu.m. from P0.19 per cu.m. FCDA in the first quarter.
Residential customers of Manila Water who consume 10 cubic meters or less will see a P0.27 rise in their monthly bills during the quarter. Those who consume 20 cu.m. and 30 cu.m. will see their bills go up P0.60 and P1.22, respectively.
“The reason why there is an increase in the rates of Manila Water is because there are significant portions of its loans payable in this quarter that are in Japanese yen and euros. Since these two currencies appreciated against the Philippine peso, this caused an increase in their FCDA,” Mr. Ty said.
Meanwhile, west zone water concessionaire Maynilad will implement an FCDA of -0.41% or -P0.15 per cu.m. of its average basic charge of P 36.24 per cu.m. This adjustment is P0.01 per cu.m. lower than the previous FCDA of -P0.14 per cu.m.
Jennifer C. Rufo, Maynilad head of corporate communications, said in a mobile phone message that monthly bills of residential customers who use 10 cu.m. or less will decline by P0.03 in the second quarter.
Customers of Maynilad who consume an average of 20 cu.m. and 30 cu.m. will see a P0.10 and P0.20 reduction in their bills, respectively.
“The majority of the loans of Maynilad that are payable for this quarter are in United States dollars. The peso appreciated against the dollar which caused the rollback,” MWSS’ Mr. Ty said.
The FCDA is a tariff mechanism which allows water concessionaires to regain losses or return gains caused by the movement of 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.
RATE REBASING TALKS
Meanwhile, Mr. Ty said the MWSS regulatory office can now start preliminary discussions on the next rate rebasing period. He said they will try to wait for the revised concession agreement before making any moves.
To recall, President Rodrigo R. Duterte ordered the revision of the water concession agreements with Manila Water and Maynilad after the water crisis that affected Metro Manila in 2019.
Under the current five-year rate rebasing period, Manila Water is eligible to hike rates by P6.22 to P6.50 per cu.m., while Maynilad is allowed to increase rates by P5.73 per cu.m. The rate hikes will be implemented in tranches and is set to end in 2022.
“We will try to wait for the revised concession agreement before we start. But if we are forced to start the preliminary discussions for the rate rebasing for next year, we will factor that in. But there might be new terms and conditions and adjust it accordingly,” Mr. Ty said.
“We are going to be looking for a consultant, via a public bidding, that will be doing the rate rebasing with us probably by the end of the year,” he added.
Further, Mr. Ty assured that there would be no spike in water rates even after both water companies deferred adjustments in rates for 2021.
“In effect, any upward pressure for the deferral will be felt in the fifth rate rebasing or that’s going to be in 2023. For next year, there will be no pressure to make that adjustment,” he said.
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.
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