News Release

Palace discloses revised water concession deal with Manila Water

The national government and Manila Water Co., Inc. have finished the renegotiation of the 1997 MWSS Concession Agreement and have come up with a Revised Concession Agreement that, according to Presidential Spokesperson Secretary Harry Roque Jr, was modeled after the contract of the New Clark City Water and Wastewater Joint Venture Agreement of the Bases Conversion Development Authority.

“Isang Revised Concession Agreement ang nabuo na nagbibigay ng mas magandang serbisyo ng tubig sa Metro Manila at advantageous sa pamahalaan at consumers. Patunay ito, ang interes ng mga Pilipino ang nasa isip at puso ng ating Presidente,” said Secretary Roque in a press briefing on April 5, 2021, where he cited important provisions of the Revised Concession Agreement with Manila Water.

The Palace Spokesperson mentioned the removal of the government non-interference clause, the recognition of Manila Water as a public utility, and the removal of provisions that unduly compromise medium and long term government liabilities or contingent liabilities.

First among these removed provisions is the national government’s performance undertaking for future debt. “Wala na po yung probisyon na bagama’t pribado ang mga kumpanyang nagbibigay ng tubig eh aba’y yung mga pagkakautang nila ay magiging pagkakautang pa ng ating gobyerno,” said Secretary Roque.

The revised concession agreement also states that all debt and expenditures of the concessionaire must be reviewed by the Regulatory Office, and that all fully recovered assets are immediately transferred to the government to ensure that there is no double payment at the end of the contract.

“Nalimitahan na rin po ang Material Adverse Government Action (MAGA) sa mga aksyon ng Ehekutibo, para hindi mananagot o liable ang National Government sa mga bagay na outside ng kanyang control. Eh kung nademanda po ang mga water concession agreement at nagkaroon ng desisyon ang ating hukuman, eh bakit naman kinakailangan gobyerno ang managot dun kung meron naman talagang pananagutan ang mga concessionaires,” Sec. Roque remarked.

Department of Justice Secretary Menardo Guevarra agreed that the Revised Water Concession Agreement is beneficial to the consumers with the concession now deemed as a public utility.

The Justice Secretary said that a very important feature of the revised agreement that is aimed to protect the interest of the consumer, is that Corporate Income Tax cannot be charged to consumer, whereas it used to be part of the expenditures being passed on by the concessionaire to the consuming public. Guevara added that tariff freeze will also be in effect until December 31, 2022 out of consideration for the country’s current situation.

Meanwhile, tariff adjustment for inflation will only be 2/3 of the Consumer Price Index, unlike in the previous contract, which had a 100% inflationary impact, Roque explained. “Ibig sabihin kung three percent po ang inflation, two percent lang ang pupwede nilang maitaas,” Roque said.

Also removed was the provision on Foreign Currency Differential Agreement, said Sec. Roque, which will result in the much lower tariff increases and will protect consumers from possible tariff spikes because of foreign exchange movements. “Dati-rati po kase yung pagbago ng FOREX ay sagot ng gobyerno, parang ginagarantiya natin na walang inflation, walang deflation. Ngayon po, wala na pong ganyang probisyon,” Roque said.

The Palace spokesperson added, “Kampante po kami na dahil po dito sa bagong concession agreement, revised concession agreements sa Manila Water, eh protektado na po ang gobyerno at ang ating mga consumers. Susunod pong magkakaroon ng renegosasyon ang Maynilad Water.”

On another matter, World Health Organization (WHO) Philippines Representative Dr. Rabindra Abeyasinghe said that the increase in the number of COVID-19 cases is seen not only in the Philippines but worldwide, in nearly all of six regions covered by the WHO. Dr. Abeyasinghe explained that there are three factors that are thought to be contributing to the increase: the circulation of new variants, the increase in the gradual reduction in Minimum Public Health Standards (MPHS) being implemented, and the vaccine optimism due to the gradual rollout of vaccines that has led to reduction in compliance to MPHS.

Meanwhile, Department of Health Undersecretary Maria Rosario Vergeire underscored the need to immediately decongest hospitals to address the surge, including the transfer of recovering patients to step-down care or in isolation facilities to free up hospital beds. Usec Vergeire added that this would also entail ensuring the immediate availability of patient transport vehicles, as well as setting up hotline or telemedicine in local government units (LGUs) with call transfer capacity. Dr. Vergeire also emphasized the need to institutionalize triage system in LGUs for patient assessment and referral to the right facilities, and the conversion of public schools as isolation or temporary treatment and monitoring facilities, as well as the setting up of hospital tents to augment the need for more beds. ### OPS-PCOO