The Metropolitan Waterworks and Sewerage System Regulatory Office (MWSS-RO) announced that water rates will be reduced starting 1 January 2016.
For Manila Water Company, Inc. (Manila Water), the average water charge is expected to go down by Php0.26 per cubic meter. For Maynilad Water Services, Inc. (Maynilad), the adjustment is negative Php0.19 per cubic meter.
On 10 December 2015, MWSS Board of Trustees issued resolutions approving and confirming the recommendation of the MWSS-RO to implement the Standard Rates adjustments and Foreign Currency Differential Adjustment (FCDA) for Manila Water and Maynilad. The adjustments will take effect on the first day of the coming year and will be reflected on customers’ bills starting February.
The Concession Agreements (CA) between MWSS and its Concessionaires provide that the Standard Rates for water and sewerage services shall be adjusted each year effective January 1 of each charging year in accordance with the Rates Adjustment Limit or RAL.
RAL is the percentage, either positive or negative,equal to the sum of three factors, namely, C, E, and R. C is the annual percentage change in the Consumer Price Index; E refers to any Extraordinary Price Adjustment; R is any Rebasing Convergence Adjustment.
The FCDA is a mechanism that accounts for foreign exchange (forex) losses or gains arising from MWSS loans and concessionaire loans used for capital expenditures and concession fee payments. This is a corrective mechanism to avoid under recovery or over recovery caused by forex movements.
Manila Water to reduce water tariff
The Php0.26 reduction in water rates for Manila Water is the net effect of the adjustments in the Standard Rates and the FCDA. The changes in the Standard Rates are composed of the following adjustments:
1. “R” Factor of negative 2.21% as applied to the prevailing Average Basic Charge of Php25.25 per cubic meter or an average adjustment of negative Php0.56 per cubic meter;
2. “C” Factor of 0.80% as applied to the prevailing Average Basic Charge of Php25.25 per cubic meter or an average adjustment of Php0.20 per cubic meter.
The negative 2.21% “R” Factor and the 0.80% “C” Factor adjustments result in a RAL of negative 1.41%, lowering the Average Basic Charge byPhp0.36 per cubic meter, from Php25.25to Php24.89 per cubic meter.
The FCDA for the first quarter of 2016 is set at 0.59% of the Average Basic Charge of Php24.89 per cubic meter or Php0.15 per cubic meter. Compared with the 4th Quarter 2015 FCDA of Php0.05 per cubic meter, this adjustment results in an average increase of Php0.10 per cubic meter.
The impact of the adjustments to residential customers is a net decrease of Php1.12 per month for those consuming 10 cubic meters or less and belonging to lifeline customers; Php1.38 per month for those consuming 10 cubic meters or less and not belonging to lifeline customers; and a decrease of Php3.06 and Php6.37 per month for those consuming 20 cubic meters and 30 cubic meters, respectively.
Maynilad to reduce water tariff
The Php0.19 decrease in water rates for Maynilad is the net result of the adjustments in the Standard Rates and the FCDA.
The change in the Standard Rates of Maynilad is limited to the adjustment in the “C” Factor: a 0.80% increase is applied to the prevailing Average Basic Charge of Php33.60 per cubic meter. This results in an Average Basic Charge of Php33.87 per cubic meter or an average upward adjustment of Php0.27 per cubic meter.
An FCDA of 0.21% is applied to the 2016 Average Basic Charge of Php33.87 per cubic meter or Php0.07 per cubic meter. Compared with the 4th Quarter 2015 FCDA of Php0.53 per cubic meter, this adjustment results in an average decrease of Php0.46 per cubic meter.
The impact of the adjustments to residential customers of Maynilad is a net decrease Php0.64 per month for those consuming 10 cubic meters or less; a decrease of Php2.41 per month for those consuming 20 cubic meters; and a decrease of Php5.03 per month for those consuming 30 cubic meters.
Manila Water provides water and wastewater services primarily to the East Zone concession area covering the cities of Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig and Marikina. It is also in charge for the southeastern parts of Quezon City and Sta. Ana and San Andres in Manila. In Rizal province, the Manila Water services the municipalities of San Mateo, Rodriguez, Cainta, Taytay, Angono, Baras, Binangonan, Jala-jala, as well as City of Antipolo.
Maynilad provides water and wastewater services to residents in most of Manila, parts of Quezon and Makati cities, as well as the cities of Caloocan, Pasay, Parañaque, Las Piñas, Valenzuela, Navotas, and Malabon in Metro Manila. Its franchise area also covers the cities of Bacoor and Imus and the municipalities of Kawit, Noveleta and Rosario in Cavite province.