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MWSS cuts water rates of Maynilad, Manila Water

Instead of granting a rate hike petition filed by two water firms, the Metropolitan Waterworks and Sewerage System-Regulatory Office (MWSS-RO) on Thursday ordered lowering of water rates in Metro Manila

The MWSS reduced Maynilad's average basic water charge by 4.82 percent or P1.46 per cubic meter and reduced Manila Water's average basic water charge by 29.47 percent or P24.57/cu.m., to be implemented in equal tranches per year in the next five years.

This is contrary to the two water firms' petition for rate hikes of P8.58/cu.m. for Maynilad and P5.83/cu.m. for Manila Water.

GMA 7's “24 Oras” also reported that Maynilad's P1/cu.m. currency exchange rate adjustment (CERA) charge will also be done away with, along with Maynilad and Manila Water's corporate income tax, the cost of which is passed on to customers.

“Marami pong expenses [ng mga water companies] dito na nakita namin na hindi dapat ma-allow,” said Emmanuel Caparas, MWSS Acting Chief Regulator. “For example, mga donations... charitable contributions, ang mga gastos para pampa-basketball, pampa-sports clinic, mga bagay na ganoon.”

Caparas also said the water companies were over-estimating the cost of their projects.

Meanwhile, the two water firms will seek arbitration for the denial of their petition for higher water rates and the cutting water tariffs.

In a disclosure to the Philippine Stock Exchange, Manila Water said it will challenge the MWSS rate determination as this will "severely compromise and impair" its service obligations to customers.

"It is clear that the MWSS arrived at this rate determination after cutting away significant programs for building and maintaining the water and wastewater systems in the East Zone," Manila Water said.

"As such, we will file the dispute notice which officially commences the process of arbitration as prescribed in the Concession Agreement," it added.

In a separate disclosure, Maynilad said the decision to reduce its water tariff is "unjustified."

"Maynilad will thus initiate arbitration proceedings to dispute the MWSS decision and to settle the tariff re-basing issues promptly, to avoid any disruption in its operations to the detriment of its consumers," it said.

Maynilad also said it will review its current service levels and future infrastructure investments to determine how it can continue providing services to the West Zone without compromising the long-term financial stability of the company. — DVM, GMA News