By Sheldeen Joy Talavera, A reporter
PRICE OF WATER in Metro Manila will rise from January after the regulator approved rate hikes sought by two regional concessionaires, which could add to inflationary pressure.
The Bureau of Metropolitan Waterworks and Sewerage System (MWSS) has approved a P5.95-per-cubic-meter increase for Manila Water Co., Inc. and P7.32 per cubic meter for Maynilad Water Services, Inc.
Prices will come into effect on 1st Jan. 2025, Patrick Lester N. Ty, executive director of the MWSS Regulatory Office, told a news conference on Thursday.
Customers served by Manila Water in the eastern area who use 10 cubic meters or less will have to pay P24.68 more to P254.83 per month, according to the rate matrix provided by the regulator.
Those using 20 and 30 cubic meters will see their monthly bills increase by P54.79 and P111.83, respectively. Low-income customers who use less than 10 cubic meters will see an increase of P2.87 to P91.40 per month.
Meanwhile, customers in Maynilad in the western area who use 10 cubic meters and below will have to pay P20.08 more, while those who use 20 cubic meters they see their bills increase by P75.89. Customers using 30 cubic meters will pay P155.32 more.
Low-income customers using 10 cubic meters of water will pay P10.56 more to P151.04 per month.
A rate hike could add to inflationary pressures, said Jonathan L. Ravelas, senior consultant at professional services firm Reyes Tacandong & Co.
This will increase domestic costs and increase production costs in water-dependent industries. These companies can pass the cost on to consumers by raising prices, he said.
Although necessary for infrastructure development, this increase will add short-term inflationary pressure,” said Mr. Ravelas in Viber message. “Policymakers will need to monitor and manage these impacts carefully.”
The increase is the third phase of taxes approved for the 2023-2027 rate reduction period. In 2022, the MWSS board illuminated the higher rates at a staggering rate for five years from January 2023.
Depreciation is done every five years, accompanied by a performance review and verification of the assumed cash flows of the two providers. It also sets water prices in a way that allows water suppliers to recover their costs.
“We monitor the way they use money (capital expenditure). [if] they are actually using the necessary capex to downsize,” said Mr. Ty told reporters. “Before we allow them to raise their prices, we will look at how the money is spent, not just what they intend to do.”
“As long as you reach a reasonable goal, we will agree to the tax adjustment,” he added.
Manila Water has spent R32.67 billion of its budget since November, 81% of the target from 2023 to 2024, he said. Maynilad’s capex spending reached P47.59 billion, 83% of the target amount for the two-year period.
In a statement, Maynilad said their commitment to invest more than R163 billion to improve water and wastewater infrastructure in the western region “requires the timely implementation of these drastic changes.”
“We are constantly monitoring it to meet our business plan commitments and we are pleased that the corresponding tax adjustment is being carried out as planned,” it added.
Philippine inflation rose to 2.5% in November from 2.3% in October, though still within the bank’s forecast of 2.2%-3% for the month.
Manila Water serves an area network east of Metro Manila, which includes parts of Marikina, Pasig, Makati, Taguig, Pateros, Mandaluyong, San Juan, parts of Quezon City and Manila, and several towns in the province of Rizal.
Maynilad serves the cities of Manila, except San Andres and Sta. Ana. It also operates in Quezon City, Makati, Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon. It also supplies water to the cities of Cavite, Bacoor and Imus, as well as the cities of Kawit, Noveleta and Rosario, all in the province of Cavite.
Metro Pacific Investments Corp., which owns majority shares in Maynilad, is one of the three Philippine units of Hong Kong-based First Pacific Co. Ltd., others in Philex Mining Corp. and PLDT Inc.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund owned by MediaQuest Holdings, Inc., has an interest in it. BusinessWorld through the Philippine Star Group, which controls.
Source link
