Metro Pacific Investments Corp. (MPIC) has much easier access now to funding for projects, as pending tariff increase petitions in its regulated businesses have been approved by the government.
Company officials said with these approvals, the banks have started to open up, offering additional facilities to finance projects.
Christopher Lizo, Metro Pacific Tollways Corp. (MPTC) chief finance officer, said the company is now just one cycle delayed in its tariff adjustment from the old three cycles.
The same goes for Light Rail Manila Corp. (LRMC) which is just one cycle late for the tariff adjustment, according to Juan Alfonso, LRMC chief executive officer.
“In 2023, we got seven tollway petitions approved. And we have implemented those approved petitions,” said Lizo.
“In fairness to the current government, they have been approving the petitions as we file them. So we have filed a petition for 2023 adjustment. … but from an implementation timing perspective, because we’re still catching up with what we have lost for the past six years, it’s also impractical to implement all at the same time,” he added.
Alfonso said LRMC got the nod for its tariff adjustment in August after applying for an increase four times in the last eight years.
“The tariffs have fallen behind… We have another tariff increase that is actually scheduled based on our concession agreement for 2024. And then also, the completion of the Cavite extension also allows us to get an increase in 2024,” he said.
“Tariff adjustments allow the operator to continue to make improvements to invest in operation and maintenance to keep the system safe. Unlike other concessions, we don’t have an automatic inflation adjustment or a foreign currency adjustment. So that these increases are very important for us in the railways,” Alfonso added.
Ramoncito Fernandez, Maynilad Water Services Inc. president, said the water concession was also granted a tariff increase in January, “after a dry and drought spell on tariff since 2012.”
“We have done a rate rebasing and regulators approved our business plan and our capex plan and corresponding tariffs, staggered tariffs were also approved,” he said.
“The first tranche was already granted to us last January 2023. The next one is for January of 2024, and so on. So this January 2024, we are expecting a roughly 16 percent tariff increase,” Fernandez added.
He said the tariff increases is greatly needed for the high capital spending needs of the company for its service improvement commitment.
“As we speak, climate change has really been driving a lot of changes in our service capability. Our raw water has been really very variable and also our NRW (non-revenue water) plans have already been hit by the pandemic because we were not repairing anything during the pandemic because the lockdown really prevented us from coming in,” he said.
“Even our sewerage projects were stopped because of the concession review. No one was lending to us during the concession review. So, this catch-up is a must-have if the Filipinos or Metro Manilans will continue to be experiencing service improvements,” Fernandez added.
June Cheryl Cabal-Revilla, MPIC chief finance officer, said approval of the tariff adjustments is a great help to the conglomerate in “operationalizing” the public service that the private sector is doing on behalf of the government as a regulated business operator. – Ruelle Castro
