Explain water rate hike, Palace tells MWSS

MANILA, Philippines — Malacañang on Thursday told the Metropolitan Waterworks and Sewerage System (MWSS) to explain first the water rate hikes it has granted to the two private concessionaries in Metro Manila and surrounding towns. Executive Secretary Eduardo Ermita said the MWSS cannot approve and implement such a hike on its own. "As much as possible, the President has instructed MWSS not to effect any increase in the rate for water. Now, if there is such a need, they should submit a position paper to Office of the President which would be the basis for a guidance coming from the President. They cannot increase by themselves and this is an instruction given by President," Ermita said. He also urged the MWSS and the concessionaires to take into consideration the current economic crisis that has caused mass layoffs and downsizing of employees and the closing down of some companies. The MWSS on Feb. 3 had reportedly approved the rate increases of P2.27 per cubic meter on the basic charges of the Manila Water Company Inc. (MWCI) and P2.81 per cubic meter on the basic charges of the Maynilad Water Services Inc (MWSI), which would take effect later this month. The hike was due to the inflation and foreign exchange factors. Ermita said the rate adjustment should be fully discussed first and Malacañang wants to see the rational or justification or such a hike. "Pag sinabi nila na (If they said that) they want to adjust it to cover the rate of inflation as far as the company is concerned, e ano (what is the) concern ng (of the) greater majority, ng (of the) user, ng taongbayan (the people) …Water is a basic commodity kaya mahalagang pag-usapan (so it’s important to talk first)," Ermita told reporters. No need to inform Palace MWSS Administrator Diosdado Jose Allado said they do not need Malacañang's approval to effect any rate adjustment. Allado said Palace approval is "not a requirement." He said that is even indicated in the concession agreement between the MWSS and the two private concessionaires. "It is written that the State cannot interfere in matters of concession's rates," he said in a telephone interview. Nonetheless, Allado said the MWSS is prepared to "inform, report or explain" to the Palace since the MWSS administratively is under the Department of Public Works and Highways, which is under the Office of the President. He added that the adjustment is not against the President's earlier request and their Jan. 15 announcement that all basic rate hikes for the year would be frozen due to the crisis. He said the adjustment, however, covers the inflationary and foreign currency fluctuations which are economic factors that is beyond their control. Allado said that such adjustment is usually given "year in-year out" and done after the annual reviews at the start of the year. The MWSS approved the implementation of the inflation and foreign currency differential adjustments to allow the companies to continue its service. It, however, stressed that any rate rebasing adjustments – which is based on the reviews of the on the utilities' spending program and the needed tariff adjustments – would remain frozen. The MWSS and the two concessionaires assured that consumers using 10 cubic meters of water per month or less would not be affected by the new rate adjustments. Manila Water serves some 80,000 households or 700,000 individuals from the East Zone that include residents of Cubao, Marikina, Pasig, Taguig, San Juan, Mandaluyong, part of Quezon City, Makati, Manila and Rizal Province." Maynilad provides water supply for some 150,000 households or 1. 35 million individuals from the West Zone that covers Pasay, Navotas, Caloocan, Malabon, Valenzuela, Parañaque, parts of Quezon City and Makati City, Imus, Noveleta, Cavite City, Bacoor, Muntinlupa, Las Piñas and Manila. - GMANews.TV