Manila Water, Maynilad raise rates on forex adjustment

MANILA, Philippines–Metro Manila’s water services providers are set to raise rates within the third quarter due to foreign exchange adjustments.

Low-income households with minimal consumption will be exempted from the higher rates, according to Manila Water Company Inc. and Maynilad Water Services, Inc.

Maynilad, led by Metro Pacific Investments Corporation and DMCI Holdings Inc., said via e-mail that the Metropolitan Waterworks and Sewerage System granted the water services provider a foreign currency differential adjustment in the third quarter of 2012.

The average, all-in increase for this quarter is P0.89/cu.m., Maynilad said. The company explained that the FCDA approved was equivalent to 0.02 percent of the Average Basic Charge of P32.92 per cubic meter (cu.m.) or P 0.01/cu.m.

Consequently, the average FCDA per cu.m. of P0.09 for the first quarter has been adjusted to P0.01 beginning in the third quarter, resulting in a reduction of P0.08/cu.m., Maynilad said.

“This adjustment shall take effect beginning July 29, and will be applied on the August water consumption of our customers. But the impact of this adjustment will be reflected on the September water bill of our customers,” Maynilad said in a statement sent via e-mail.

“Due to the improved economic conditions, we will also limit our voluntary discount of one peso per cubic meter of water consumed to our lifeline customers, or those whose monthly water consumption is 10 cubic meters or less.”

Earlier, in a disclosure to the Philippine Stock Exchange, Manila Water said that, effective 15 days after publication, water rates for Manila Water customers will increase by P0.39 per cubic meter due to the Foreign Currency Differrential Adjustment. This adjustment is based on the exchange rates of $1:P42.70 and JPY1:P0.5253. The FCDA component of the water bill will be adjusted from 1.71 percent to 3.19 percent of the basic charge, the Ayala-led company said.

“Low-income households consuming 10 cubic meters a month or less will be exempt from the adjustment,” according to Manila Water.

The FCDA is a pass-through tariff mechanism that accounts for foreign exchange losses or gains arising from the payment of foreign-denominated concession fees to the government as well as loans for service expansion and improvement.

Maynilad and Manila Water both review the FCDA on a quarterly basis.

The FCDA goes down whenever the peso strengthens against foreign currency, and it goes up whenever the peso depreciates.

Manila Water and Maynilad both said the FCDA does not affect their net income.

Manila Water concession area includes some parts of Quezon City and Makati, Taguig, Pateros, Marikina, Pasig, San Juan, Mandaluyong, southeast parts of Manila, and Rizal province.

Maynilad concession area includes the cities of Manila (all but portions of San Andres and Sta. Ana), Quezon City (west of San Juan river, West Avenue, EDSA, Congressional, Mindanao Avenue, the northern part starting from the districts of Holy Spirit, and Batasan Hills), Makati (west of South Super Highway), Caloocan, Pasay, Paranaque, Las Piñas, Muntinlupa, Valenzuela, Navotas, and Malabon–all in Metro Manila–and the municipalities of Bacoor, Imus, Kawit, Noveleta and Rosario in Cavite province.