Maynilad passes on forex gains to customers

June 20, 2013

Customers of West Zone concessionaire Maynilad Water Services, Inc. (Maynilad) will enjoy a significant reduction in their water charges beginning July 6 until December 31 this year, after the water company refinanced over US$120 million worth of loans.

Maynilad gained ₱978 million from the refinancing transaction, which will result in a rate adjustment of ₱4.96 per cubic meter (average, all-in). Consequently the total rate adjustment will be ₱4.79 per cubic meter (average, all-in), which includes the FCDA adjustment published on 18 June.

From ₱46.56 per cubic meter (average, all-in) in the second quarter, the water rate will go down to ₱41.77 per cubic meter (average, all-in), a reduction of around 10.3%.

In effect, households consuming 10 cubic meters or less every month will see their water bill decrease from ₱119.12 to ₱108.11, while the water bill of those consuming 20 cubic meters will go down from ₱422.35 to ₱380.63.

Meanwhile, residential customers consuming 30 cubic meters a month will save ₱85.32, since their water bill will be reduced from the current ₱847.42 to ₱762.09. The downward adjustment will be reflected in August to January 2014 water bills of Maynilad customers.

Under its Concession Agreement with the Philippine government, Maynilad must pass on to customers its foreign exchange gains or losses arising from the payment of its foreign-denominated loans from banks and concession fees to the MWSS. The adjustment is revenue neutral and has no impact on the projected net income of Maynilad.

Maynilad is the largest private water concessionaire in the Philippines in terms of customer base. It is a concessionaire of the MWSS for the West Zone of the Greater Manila Area, which is composed of the cities of Manila (all but portions of San Andres & Sta. Ana), Quezon City (west of San Juan River, West Avenue, EDSA, Congressional, Mindanao Avenue, the northern part starting from the Districts of the Holy Spirit & Batasan Hills), Makati (west of South Super Highway), Caloocan, Pasay, Paranaque, Las Pinas, Muntinlupa, Valenzuela, Navotas and Malabon all in Metro Manila; the cities of Cavite, Bacoor and Imus, and the towns of Kawit, Noveleta and Rosario, all in the Cavite Province.