Iloilo’s Water Future Needs Oversight, Not Haste

The recent public hearing on Aboitiz InfraCapital’s (AIC) unsolicited proposal to supply bulk water to Iloilo City has surfaced a broader, more critical debate – one that goes beyond numbers and contracts.

At its core, this is not just about whether AIC’s proposed PHP40 per cubic meter rate is too high. It is a battle between two governance models: Public-Private Partnerships (PPP) versus Government-to-Government (G2G) arrangements.

In the face of climate-driven water insecurity and surging urban demand, Iloilo must ask: which of these models best protects the public good in the long run?

Atty. David Garcia of the Iloilo City Public-Private Partnership Office admitted during the hearing that if a viable G2G deal exists, “that’s what we are going to take.” Metro Pacific Iloilo Water (MPIW), the current distributor, echoed this preference, asserting that a G2G option anchored on a 1 CMS (1 cubic meter per second) allocation from the Jalaur River megadam could be completed sooner and at far lower cost than AIC’s proposal.

MPIW’s COO Angelo David Berba said this would allow water to flow in two to three years, with rates kept at around PHP30 per cubic meter — significantly lower than AIC’s PHP40 opening rate, which could increase to PHP50 once operational costs are factored in.

But AIC has insisted that its offer is misunderstood. It claims to offer a sustainable, long-term solution to Iloilo’s water shortage and stresses that it does not seek to act as a “middleman.” Yet the concerns voiced by MPIW and some city officials are rooted in historical memory and regulatory caution.

For Ilonggos, the term “middleman” evokes painful memories of a private bulk supplier that operated with little to no regulatory oversight and triggered complaints over pricing and service quality.

In many ways, AIC’s proposal — while dressed in legalese and project guarantees — bears the same risks. There is currently no national legal framework that directly regulates bulk water pricing in PPP arrangements.

Unlike MPIW, which is covered by the Local Water Utilities Administration (LWUA) and subject to pricing rules from the National Water Resources Board (NWRB), AIC would function outside this regulatory ecosystem.

This means that even if AIC starts at PHP40 per cubic meter, there is no ceiling or independent check that prevents it from raising rates in the future – whether due to inflation, energy prices, or internal cost recovery. Iloilo could walk into the same trap experienced in the deregulated power sector, where the absence of strict oversight led to unexpected price surges borne by the public.

AIC’s defenders argue that rate increases would follow a tariff-by-contract formula with built-in annual inflation adjustments. But a contract-based ceiling is not the same as an external regulatory guardrail. It presumes both transparency and trust – two commodities not always abundant in high-stakes infrastructure deals.

Moreover, the city’s water woes – while urgent – should not be used as a blanket justification for an opaque and high-risk proposal. AIC has yet to secure the necessary water rights from the National Irrigation Administration (NIA), which already rejected its application due to conflicts with its agreement with the Asian Development Bank (ADB). The mere idea of pressing forward despite this denial suggests a troubling insistence on form over substance – one that could end in costly legal and bureaucratic delays.

Indeed, redundancy in water supply is vital. Iloilo’s growing population and climate vulnerabilities demand alternative sources, backup infrastructure, and innovation. But redundancy without accountability is a false solution. The city needs more supply, yes – but not at the expense of transparency, regulatory oversight, and rate stability.

In contrast, MPIW’s proposed desalination project – though power-intensive – is backed by existing legal and regulatory agreements, including a fixed PHP30 rate already embedded in its joint venture contract with the Metro Iloilo Water District (MIWD). While not perfect, it is anchored in a system that is accountable to public agencies.

The water security of a city is a matter of public trust. It should never be subjected to speculative pricing models or corporate monopoly. Iloilo’s leaders – both at City Hall and in the national government – must take this opportunity to codify national regulations for bulk water pricing, streamline the G2G pipeline, and establish a clear policy framework for future PPPs.

This issue goes beyond a single proposal – it will help define how Iloilo manages and protects its water resources for years to come.

Let us not trade short-term supply for long-term suffering. Let us not repeat the mistakes of the past in a more expensive package. And most of all, let us not gamble with the people’s basic right to affordable, accessible water.