No Source, No Buyer, No NIA Approval: Middleman Scheme by Aboitiz to Inflate Iloilo Water Rates

Iloilo City may be trading decades of financial security for the promise of a quick water fix.

The local government is pressing ahead with a bulk water agreement with Aboitiz InfraCapital (AIC) that critics say put the city—and its residents—on the hook for massive costs, while the private company stands to collect full profits.

Instead of buying directly from the government-funded Jalaur River Multi-Purpose Project (JRMP II), nearly complete and financed with taxpayers’ money, AIC would act as a middleman, selling water to the city. The current utility, Metro Iloilo Water District (MIWD), would be sidelined, leaving the city to handle permits, marketing, and payments.

The contract contains a “take-or-pay” clause, obliging Iloilo City to pay up to P27 billion over 33 years regardless of actual water use. Early termination or project failure could tack on billions more in penalties.

Zooming into AIC’s proposal, the bulk water price could climb to P40 per cubic meter. Once distribution costs are added, retail rates could surge to P80–P86 per cubic meter—the highest in the Philippines. Immediately, this could hike monthly household bills from P200 to as much as P800, a disservice to Filipinos.

By contrast, MIWD could source water directly from JRMP II at a fraction of the cost, sparing residents from this steep financial burden.

The legality of the arrangement is also in question. AIC’s earlier attempt to tap Jalaur water was blocked by the National Irrigation Administration after the Asian Development Bank deemed it unnecessary.

The Public-Private Partnership Code prohibits unsolicited proposals where government projects already exist. Yet Iloilo City granted AIC “Original Proponent Status,” paving the way for the deal.

Concerns extend to Aboitiz’s record elsewhere. Its Apo Agua project in Davao City is six years behind schedule, took a decade to develop, and saw costs more than double, with overruns potentially passed to consumers.

If the deal goes through, AIC will control Iloilo’s bulk water supply and profits, while the city and its residents carry the full financial risk. Critics warn the arrangement could lock the city into decades of costly obligations for a resource it does not fully control.

The question remains: is Iloilo falling to false promises today, only to pay dearly tomorrow? (Advertorial)