THE Metropolitan Waterworks and Sewerage System (MWSS) board of trustees has approved fourth-quarter rate adjustments for Manila Water Co. and Maynilad Water Services, Inc. to account for foreign exchange losses or gains.
In a statement, MWSS said it approved a hike of P0.86 per cubic meter for Manila Water and a rebate of P0.29 per cubic meter for Maynilad.
The rates will take effect on Oct. 1, 2024.
The approval was based on the recommendation of the MWSS Regulatory Office (RO) following its evaluation of proposals from the two concessionaires for foreign currency differential adjustment (FCDA).
Manila Water customers in the east zone who consume 10 cubic meters will have to pay P3.65 more every month, while those who consume 20 cubic meters and 30 cubic meters will see their monthly bills go up by P8.10 and P16.54, respectively.
For Maynilad customers in the west zone, those who consume 10 cubic meters will see a reduction of P0.83 in their monthly bills, while those who use 20 cubic meters will have to pay P3.14 less. Customers consuming 30 cubic meters will get a rebate of P6.43.
Lifeline customers, or those whose monthly consumption does not exceed 10 cubic meters, will not experience any rate adjustments.
The FCDA is a quarterly reviewed tariff mechanism that accounts for foreign exchange losses or gains arising from fluctuations in foreign exchange rates, as payments are made for foreign currency-denominated loans that are used to fund the expansion and improvement of water and sewerage services.
“It is a corrective mechanism formulated by the MWSS RO to avoid under-recovery or over-recovery caused by forex movements,” the regulator said.
Manila Water said that the rate hike was based on the difference between the foreign exchange rates in the first and second quarters. The company said that the peso fell by an average of 4.6% versus the US dollar and the euro, which a larger part of Manila Water’s loans was denominated.
For Maynilad, it said that the rebate was driven by the appreciation of the local unit against the Japanese yen, wherein the concession loans are denominated. This offset the depreciation of peso against US dollar in the concession fees.
In July, the MWSS RO conducted a public consultation as it reviewed the guidelines for carrying out FCDA.
The FCDA was temporarily halted when the revised concession agreement (RCA) between MWSS and the two concessionaires took effect in November 2021.
Amendments to the RCA were signed on May 10, 2023, and took retroactive effect with a June 29, 2022 start date. This introduced a modified FCDA for concession loans obtained after June 29, 2022, but only for “extraordinary” movements of the exchange rate.
Manila Water serves the east zone network of Metro Manila, covering parts of Marikina, Pasig, Makati, Taguig, Pateros, Mandaluyong, San Juan, portions of Quezon City and Manila, and several towns in Rizal province.
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 the cities of Cavite, Bacoor, and Imus, and the towns of Kawit, Noveleta, and Rosario, all in Cavite 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. — Sheldeen Joy Talavera