MANILA, Philippines – In an apparent show of defiance to Malacanang, a state agency ordered the increase in the water rates of two private concessionaires servicing about 12 million residents of Metro Manila and neighboring areas in Central and Southern Luzon.
The order was issued by Diosdado Allado, the administrator of the Metropolitan Waterworks and Sewerage System (MWSS), who earlier announced the MWSS board of directors had rejected the petitions for increase because it was “socially unconscionable” due to the global economic and financial meltdown.
Besides, Allado admitted that Malacanang had ordered the MWSS to put on hold the petition for such increase to spare the millions of consumers who are already feeling the adverse impact of the crisis.
The petitions were filed with the MWSS, the state regulatory agency, by Manila Water, owned by the Ayala Group of Companies which developed the business district of suburban Makati City, Metro Manila and Maynilad Water which is operated by the owners of the country’s telecommunications giant, the Philippine Long Distance Telephone Company.
Following the rejection by the board, the two concessionaires asked and succeeded in convincing the agency to reconsider its decision.
Allado said the MWSS ordered the increase equivalent to about five US cents per cubic meter for Manila Water and less than six US cents for Maynilad.
But the MWSS chairman defended the decision, saying the increase was to cover the inflation and foreign exchange losses arising from the foreign loans incurred by the two water providers.
He added the MWSS only allowed the implementation of the inflation and foreign currency adjustments because these are contained in the contracts which the agency has with Maynilad and Manila Water.
The increase reflects a 12.2 percent in the monthly water bills of the estimated 12 million Metro Manilans as well as the residents in the neighboring provinces of Bulacan in Central Luzon and Cavite in Southern Luzon being serviced by the two water concessionaires.
But the MWSS and officials of Maynilad and Manila Water assured the increase would not affect those consuming l0 cubic meters a month and below.
They also insisted that consumers who use up to 30 cubic meters a month and who make up the bulk of the consumers of the two concessionaires will still be paying below the average adjustment.
The explanations, however, did not sit well with Malacanang, through Executive Secretary Eduardo Ermita, who expressed surprise when informed of the decision of the MWSS to agree to the increase.
Ermita pointed out that President Gloria Macapagal-Arroyo had ordered MWSS not to grant any petition for such increase this year due to the global crisis.
For this reason, he said he ordered the MWSS to submit a report, including a complete background on the petitions, as he cited the agency’s earlier announcement it would not grant the increase.
Ermita likewise said any move by the MWSS to approve such increase should go through Malacanang for approval by President Arroyo.
“If there is a need for such increase, the MWSS should submit a position paper to the office of the President, which will become the basis of the guidance coming from the President,” Ermita emphasized. “They (MWSS) cannot increase the rates by themselves. This is an instruction coming from the President.”
Ermita also stressed the MWSS should justify its decision to agree to the increase which, he hinted, is a virtual defiance of President Arroyo’s order.
He said the MWSS should have considered the concern and welfare of the greater majority of the people of Metro Manila and the other consumers in the neighboring areas because water is a basic commodity.
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