THE profitability of the country’s 512 water districts (WDs) has steadily declined since 2015 even while their total assets have continuously increased in value over the same period,
From a high of 8.6 percent in 2015, return on assets (ROA) rating as of yearend 2020 has dropped to 4.15 percent, a six-year low, according to the annual report of the Commission on Audit released last December 22.
The ROA is arrived at by dividing profit after tax by the total assets.
Auditors said the ROA reflects the quality of management of the water districts and how efficient its resources are being handled.
“The ROA measures how profitable are the WD’s assets. The higher the rate, the better, as it indicates that assets were effectively managed to generate more net income,” the COA explained.
Combined assets over the last five years soared by 47.55 percent from P63.51 billion to P93.71 billion.
However, records of profits after tax failed to keep pace with P5.46 billion posted in 2015, P5.84 billion in 2016, P5.4 billion in 2017, P5.03 billion in 2018, P4.09 billion in 2019, and P3.89 billion in 2020.
The 2021 figure has not been released with the fiscal year having just ended.
A closer look into the water districts’ financial performance over the same period showed the increase in expenses each year has far outstripped annual income generated.
Between 2015 and 2020, expenses climbed P3.92 billion or an average of P784 million per year while income only rose P2.35 billion or an average of P470 million year on year.
