The Metropolitan Waterworks and Sewerage System-Regulatory Office (MWSS-RO) said the MWSS Board of Trustees has approved the removal of the foreign currency differential adjustment (FCDA) from customer bills of concessionaires Manila Water Co. and Maynilad Water Services Inc.
A document signed by Patrick Ty, MWSS-RO chief regulator, showed this takes effect on November 18 and will result in lower water rates for Manila Water customers but higher rates for Maynilad customers.
Removal of the currently implemented FCDA equivalent to negative 0.55 percent of the 2021 average basic charge of P36.24 per cu. m. or negative P0.20 per cu. m. from customers’ bills will result in the increase of rates for water and sewage services of Maynilad customers.
To shield Maynilad clients from higher rates, its FCDA was temporarily converted into a transitory adjustment bill from November 18 until the end of the year.
The cash flow effect of the FCDA removal for Maynilad will then be considered in the next rate rebasing exercise for the concessionaires set for 2023 that is expected to further systemize the billing system of both water supply distributors.
For Manila Water, the removal of the currently implemented FCDA equivalent to 0.84 percent of the 2021 average basic charge of P28.52 per cubic meter (cu. m.) or P0.24 per cu. m. from customers’ bills will result in the decrease of standard rates for water and sewerage services.
Manila Water customers consuming an average of 10 cu.m. per month or less, will experience a decrease of P1.26 in their monthly water bill. Those consuming 20 cu. m. per month’s monthly bill will go down by P2.79, while those consuming 30 cu.m. per month will have P5.69 lower charge in their monthly bill.
The FCDA was a quarterly-reviewed tariff mechanism that allowed the concessionaires to recover losses or give back gains arising from fluctuations in foreign exchange rates that also serves as a corrective mechanism to avoid under recoveries or over recoveries.
The mechanism was scrapped under the revised concession agreements of Manila Water and Maynilad with the government alongside a tariff freeze until Dec. 31, 2022.
