By Joyce Pangco Pañares, Roy Pelovello, Rio N. Araja

MALACAÑANG has warned Maynilad Water Services Inc. and Manila Water Co. not to push through with their planned rate increase before the end of the month to cover foreign exchange losses and rising cost of operations.

Press Secretary Cerge Remonde said increasing the rates of the two concessionaires was “tantamount to defying Palace orders.”

But Metropolitan Waterworks and Sewerage System Administrator Diosdado Jose Allado backed the rate adjustments, for a freeze in water prices, saying that government would have to shoulder the losses to be incurred by the two firms if the water rate increases are not granted.

Allado said the government will violate provisions in the agreements with Manila Water and Maynilad if it would bar rate adjustments. The agreement allows to adjust their rates annually to enable them to catch up with the inflation and the foreign exchange rate.

“Under the concession agreement, rate adjustment is allowed a year. The government would be forced to pay the firms’ losses due to non-implementation of the increases,” he said on radio.

The government must consider that once it assumes the losses, it would only be forced to pass on the liability to the public through tax payments, Allado said.

Executive Secretary Eduardo Ermita said the increases will be an added burden to the people amid the global economic crunch.

Ermita said the Metropolitan Waterworks and Sewerage System should take steps “not to effect any water rates increase” until the concessionaires submit a position paper to the Palace.

“They cannot increase by themselves. Considering the economic situation, any water rate increase is an added burden to the people,” the Palace official said.

Manila Water said it would add an average P2.27 per cubic meter to its basic charge while Maynilad said it would add P2.81 per cubic meter of water used with the exemption of consumers using 10 cubic meters or less.

Manila Water serves 5.6 million customers in Metro Manila’s east zone, while Maynilad serves six million customers in the west zone.

Manila Water provides water to several portions of Manila in San Andres and Sta. Ana; Quezon City on the east of San Juan River, West Avenue, Edsa, Congressional and Mindanao avenues, districts of Tandang Sora, Pasong Tamo and Matandang Balara; Makati City on the east of South Super Highway; Mandaluyong City; San Juan; Marikina City; Pasig City; Pateros; Taguig and Rizal province.

Opposition solons are calling for a congressional investigation into the decision to allow the utility firms to hike their ates.

In a text message, Cibac (Citizens Battle Against Corruption) party-list Rep. Joel Villanueva said the MWSS ruling was contrary to the earlier statement of the regulatory agency’s new chief.

“Two weeks ago the new MWSS administrator categorically promised that there would be no rate increase. Now, we suddenly have this new rate hike,” Villanueva noted.

Villanueva said the MWSS approval of the new water rate hike shows that the “uselessness” of our regulatory agencies, especially in dealing with utility companies, is getting worse.

Bayan Muna Rep. Satur Ocampo also expressed dismay over the rate hikes the water distributors are imposing.

“The water distributors must take into higher consideration the impact of economic crisis on the consuming public over their profits in adjusting water rates,” said Ocampo.