MPIW kept Iloilo rates low amid expansion, crises

By Joseph Bernard A. Marzan

Angelo David Berba, Chief Operating Officer (COO) of Metro Pacific Iloilo Water (MPIW), informed the Sangguniang Panglungsod of Iloilo City on Monday, June 10, that a rate increase is essential to further improve the water situation in their service areas.

The city council convened as a Committee of the Whole in response to a May 27, 2024, letter from former councilor and lawyer R Leone Gerochi to Public Utilities Committee chairperson Councilor Romel Duron.

Gerochi’s letter referenced an unspecified radio report about a proposed water rate increase by MPIW, which serves Metro Iloilo Water District’s (MIWD) areas.

Berba explained that MPIW has been fulfilling its plans despite rising operational expenses due to the continuous increase in the inflation rate.

He highlighted increases in five key expenditures since 2019:

– Bulk water price: P20.71 per cubic meter, up 33% from P13.81.

– Fuel price: P64.25 per liter, up 34% from P47.92.

– Material cost of 150-millimeter pipes: P5,248, up 74% from P3,022.

– Chemical for water quality: P5,000, up 25% from P4,000.

– Labor costs: P480, up 22% from P395.

Berba said the rate adjustment is meant to augment the substantial funds of MPIW, which is already implementing its key projects in the past years without any tariff hike.

Despite these costs, MPIW’s rates remain among the lowest in Metro Iloilo at P200 for the first 10 cubic meters (P20 per cubic meter).

This is in comparison to other water utilities, such as South Balibago (P356.50), Lambunao Water District (P352), Banate Water District (P303), Dumangas-Barotac Water District (P283), Metro Roxas Water District (P252), Metropolitan Cebu Water District (P243), and Davao City Water District (P214).

Berba noted that the P9.19 per cubic meter per month increase they are petitioning with the Local Water Utilities Administration (LWUA) is their first since taking over in 2019. The increase, initially planned for 2021, was delayed in consideration for its customers due to the COVID-19 pandemic.

Due to the pandemic, their asset verification process was delayed, and only 36% (P612 million) of the P1.699 billion capital expenditure (capex) budget was utilized.

Berba emphasized that an increase in the current distribution tariff would help in addressing the current water system’s issues. These issues include water supply shortages, limited water availability and pressure, high water loss and pipe leakages, aging pipelines and assets, rampant illegal connections or water theft, and challenges from road widening projects and power outages.

“We acknowledge the problem here in Iloilo City. As you can see on the map, we are experiencing water supply shortages. The map indicates water availability and water pressure. In Iloilo City, most customers have less than 15 hours of water supply due to pipe conditions and location but Php1 billion worth of capex projects will be rolled out this 2024 to address this problem,” Berba explained.

To note, MPIW also serves the towns of Maasin, Cabatuan, Sta. Barbara, Pavia, San Miguel, Oton, and Leganes.

From 2019 to 2023, MPIW implemented 60 improvement projects, focusing on non-revenue water (NRW) reduction, septage management, service improvement, and asset replacement.

Their data as of May 2024 showed an increase from 23% in 2019 to 26%, with close to 50,000 connections up from 40,417 in 2019.

The firm also reduced NRW from 56% in 2019 to 38% in May 2024.

Their short-term goals include recovering 15 million liters per day from NRW and pipe leaks using Sahara Mobile Leak Detection Technology.

In the medium term, they aim to establish a desalination plant, and in the long term, they plan to source additional sustainable Bulk Water Providers within Western Visayas.

Berba reiterated that these goals depend on completing current improvement projects. MPIW’s capex projections are P970 million for 2024, P950 million for 2025, P1 billion for 2026, P531 million for 2027, and P896 million for 2028.

MIWD General Manager Alfredo Tayo III said MPIW has substantially complied with its obligations under the 2018 joint-venture agreement with Metro Pacific Water.

“Based on our requests and their responsiveness, I would say it is satisfactory, though not perfect,” Tayo told the media after the hearing.

He acknowledged that the pandemic delayed MPIW’s capex targets but added that they should have addressed NRW concerns earlier.

“In [the 2-year] period [2020 and 2021], they should have concentrated on addressing the [NRW], because the supply is there, but it’s not reaching the service connections due to NRW,” Tayo said.

MPIW will be investing P8 Billion in total for its 5-year development plan