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Water under the bridge

Newspapers today report that the President has apparently calmed down from his earlier vitriol against the private water concessionaires in Metro Manila. The Palace issued clarifications that the concession contracts won’t be rescinded—yet. However, they should still be amended to remove “onerous provisions.”

I’m always amazed by the amount of bad reasoning that hits social media every time a controversy erupts in this country. This latest brouhaha over water is no exception, on both sides of the issue. Some examples:

Complaints have been flying around about the purportedly shoddy service of the two concessionaires, Manila and Maynilad Water. But just 20 years ago, in 1997, only 3 million people in Metro Manila were enjoying water from MWSS, representing 67-percent coverage. Today over 7 million people are being serviced by 93-percent coverage, including 2 million from marginalized communities.

I wager that these folks still remember having to pay an arm and a leg for water from privately owned trucks. If that was the best government could do at the time, is it reasonable to expect that government could have performed as well as the concessionaires had privatization not happened?

Having said that, was the improvement in service worth whatever had to be paid by consumers? One columnist has bandied about the number P120 billion as the total profits reportedly earned by Manila Water since privatization. Nonetheless, it’s the return that matters, not the absolute number. On that score, another columnist says the company has been limited to an ROE of only a little over 7 percent, which seems appropriate for a utility that enjoys monopoly status.

At the same time, Manila insists that they’ve spent over P166 billion to improve water and wastewater services. Who’s telling the truth here? The company can validly claim a presumption of regularity since they’ve got their auditors, MWSS, SEC, and PSE all looking over their shoulders.

It was under former President Arroyo that the concession agreement with Manila Water was extended, in 2009. And it was under former President Aquino III that MWSS committed various actions, starting in 2014, on which the Singapore arbitrators subsequently ruled in favor of the concessionaire.

Bottom line: Duterte has been dealt a bad hand, and not for the first time, thanks to his feckless, reckless predecessor. If the original contracts were badly written against government—even if there may have been no choice at the time because we badly needed private investors to supply an essential commodity like water—it’s his unenviable job to set things right.

As we’ve always maintained, it’s on the wholesale supply side that the water problem needs to be fixed. This is government’s job alone. Luckily, DPWH Secretary Villar recently added his powerful voice to the chorus by pushing for the building of the Kaliwa river dam. This is an old plan that dates back all the way to the Marcos years, which gives you an idea of the level of government efficiency.

Villar distanced his agency from the MWSS record, reminding us that his agency does not sit on their board. That may be true, of course, but the last I checked, the “public works” that’s part of his agency’s name also includes projects like dams.

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On the brighter side of things, the Mindanao wholesale electricity spot market (WESM) may finally see the light of day by next January, after being delayed since late 2018. According to DOE, the ERC will also have to play its part by relaxing its requirements that must be met by power distributors before they can join WESM.

Hooking up the island of Mindanao to a nationwide power grid is an old dream that’s finally coming true. It will also improve the overall efficiency of the grid, which is now also under attack (as usual, with perfect hindsight) over its minority Chinese presence. And if anyone complains about high electricity prices today, they ought to remember the bad old days of day-long brownouts under PNot’s sainted mother. Not to mention the fact that electricity in this country—unlike in most others—is not subsidized by taxpayers’ money.

Over on the housing side, Pag-IBIG will soon be raising its members’ savings rate, from P100 a month today, to P150 by 2021 and P200 by 2023. Higher savings will fund the dramatic growth of housing loans under the agency’s dynamic young CEO, Acmad Moti, as well as enable lower loan interest rates and higher dividend payouts to members.

Moti is to be commended for consulting in full with all his constituencies in advance of this increase in rates. I’m sure that the process brought him into contact with all the leftists and free-lunchers who think that Pag-IBIG should be able to grant more and more loans out of thin air.

To cap it all, the incidence of poverty has declined from 23.3 percent in 2015 to only 16.6 percent in 2018, according to NEDA. This was due to “improved labor market conditions” as well as government social assistance programs like the 4 Ps. The country is now on track to meet its target of 14-percent poverty by 2022, on schedule and the larger sustainable development goal (SDG) of eliminating “extreme poverty” by 2030.

This improvement means over a million Filipino households were lifted from poverty since Duterte took office in early 2016. This is no mean feat. The United Nations and the do-gooders in the West ought to commend him for that, but I won’t be holding my breath waiting for them to do so.

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Appropriate to the second week of Advent, today’s first reading (Is 40: 1-11) proclaims the Lord’s coming: “Prepare the way of the Lord! Here comes with power the Lord God…Like a shepherd he feeds his flock, in his arms he gathers the lambs.”

The picture of the caring shepherd is continued in the Gospel (Mt 18: 12-14) when Jesus asks the crowd, “If a man has a hundred sheep and one of them goes astray, will he not leave the ninety-nine in the hills and go in search of the stray?”

Divine love is all-embracing and all-inclusive: “It is not the will of your heavenly Father that one of these little ones be lost.” This is the comfort offered to us as we draw closer to the events of the Nativity in Bethlehem.

Readers can write me at [email protected]

Topics: Manila water , Maynilad Water , MWSS
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