MANILA, Philippines - Water concessionaires Maynilad Water Services Inc. and Manila Water Company Inc. will increase their rates starting January 2, 2010.

Maynilad, concessionaire for the western zone of Metro Manila, will increase its basic rate by an average of P1.05 per cubic meter.

On the other hand, Ayala-led Manila Water, the franchise holder for the eastern zone, will increase its average basic tariff by P1.16 per cubic meter.

Water bills of residential customers consuming 15 cubic meters shall increase by P0.47 per day and those consuming 30 cubic meters per month, which make up the majority of customers, shall increase P1.30 per day.

These rate increases, however, exclude the environmental charge and increase in value-added tax that water concessionaires also pass on to consumers.

Every 5 years

Water regulator Metropolitan Waterworks and Sewerage System (MWSS) explained that the rate increase is part of the rate rebasing conducted by the companies every 5 years.

In 2008, the MWSS board and Manila Water agreed to implement the 2008 rate rebasing adjustment on a staggered basis over five years (2008-2012).

The rate rebasing was to be implemented in 2009 but the government mandated that further tariff mitigation measures be adopted in the midst of the global financial crisis. No adjustment was implemented in 2009.

MWSS approved a 15-year renewal/extension of the concession agreement with the two firms. The original agreements end in 2022 but were extended to 2037.

Manila Water said the extension gives the company a longer period to recover its investments, which will enable the company to phase in small water rate increases over many years.

Exchange rate

The MWSS said this is the only basic rate adjustment for 2010.

There may be quarterly adjustments due to foreign currency differentials.

When the US dollar is strong, rates go up. But if it weakens, consumers may get a refund. – Report by Zen Hernandez, ABS-CBN News