More areas now enjoy reliable water supply

Philippine Daily Inquirer

01:54 AM December 11th, 2012

More and more households continue to benefit from piped-in water service connection from Manila Water
as a result of the firms expansion projects. In a statement issued recently, the water firm said commercial
and industrial establishments, too, are connecting to the distribution network that provides clean, potable
and reliable water services.
It said that as of June, Manila Water has a total of 836,338 water service connections, of which 22,396
connections were installed for the first six months of the year with 565 as commercial and industrial
connections. The steady increase in new customers were mainly driven by the high degree of efficiency in
the central distribution system and increased water supply availability, the firm said.
It added that water quality in the east zone is of the highest quality and fully compliant with the
parameters of the Philippine National Standards for Drinking Water. At the onset of the privatization of
state-owned Metropolitan Waterworks and Sewerage System (MWSS) in 1997, only 26 percent enjoyed
24-hour water supply, seven days a week, the statement said. It added that nonrevenue water, or water loss
due to leaks and illegal connections, were also at an all-time high at 63 percent.
After 43 years and P50 billion in capital improvement projects invested, Manila Water said it has been
able to reduce the level of its system loss to 11.5 percent as of June, unprecedented in the water industry.
With the recovery of water loss, the huge volume of water recovered now supplies more than 99 percent
of the 6.1 million residents in the entire east zone with 24-hour water.
The firm said water supply is also now available even to the elevated city of Antipolo, the eastern towns
of San Mateo and Rodriguez as well as to the southern city of Taguig.
Besides ensuring reliable water supply, Manila Water is also now giving emphasis on wastewater
management with the construction of more sewage treatment plants in a bid to revive the major river
systems in Metro Manila. Manila Water is the private concessionaire of MWSS, and also serves parts of
Quezon City and Manila, Marikina, Makati, Pasig, Mandaluyong, San Juan and Pateros.
Explanation
22,396 new connections inclusive of 565 commercial and industrial connections gave rise to the
increasing credit sales and cash receipts of the year. It is also said in the succeeding paragraph that the
Manila Water Company was able to recover from its system loss up to 11.5%. Manila water was able to
deliver services again in the east zone.
However, additional commercial and industrial connections may decrease the rate of collection of
receivables. Wastewater management and construction of more sewage treatment plans may decrease the
current years sales but it is a good investment in the long run.

Manila Water to hike rate, Maynilad to cut charges

Philippine Daily Inquirer
03:18 PM September 22nd, 2012

MANILA, Philippines Customers of Manila Water Co., Inc. will have to pay slightly higher water rates
toward yearend as a result of loan payments in Japanese yen, which has strengthened against the peso. On
the other hand, Maynilad Water Services Inc. is exposed more to the US dollar, which weakened against
the peso, and is passing on gains to customers through slightly lower monthly bills.
Ayala-led Manila Water has announced that the foreign currency differential adjustment (FCDA) will
slightly raise water rates by P0.08 per cubic meter in its area. Manila Water customers using 20 cubic
meters per month would pay P1 more per month than their present rate. The average consumption, which
is 30 cubic meters per month, will result in a P2 increase from the present monthly bill.
This is because of the depreciation of the peso versus the Japanese yen (P0.5253 to P0.5302) during the
third quarter. During this period, more than half of the companys loan payments were made in yen,
which appreciated against the peso.
The adjustment takes effect starting October 7 but the impact will be felt in the November bills, Manila
Water said. Maynilad said the all-in average tariff adjustment on its water rates is -0.09 centavos. Lifeline
customers or those consuming 10 cubic meters of water and below per month will enjoy a 0.22 centavo
reduction in their monthly water bill.
The average consumption across water networks is 30 cubic meters per month. Households at this level of
usage will enjoy a P1.66 reduction on their monthly water bill, Maynilad said. Maynilad said its FCDA
for the fourth quarter of 2012 is -0.19 percent of the average basic charge of P32.92 per cubic meter or
-P0.06 per cubic meter.
The FCDA is a pass-through tariff mechanism that accounts for foreign exchange losses or gains arising
from the payment of foreign-denominated concession fees to the government as well as loans for service
expansion and improvement. Maynilad and Manila Water both review the FCDA on a quarterly basis and
the impact is felt in the three-month period that follows.
The FCDA goes down whenever the peso strengthens against whatever foreign currencies to which
Manila Water and Maynilad are exposed. The FCDA rate goes up whenever the peso depreciates against
these currencies. The two water service providers have said the FCDA does not affect their projected net
income.
The Manila Water concession area includes some parts of Quezon City and Makati, Taguig, Pateros,
Marikina, Pasig, San Juan, Mandaluyong, the southeasterns parts of Manila, and Rizal province.
Explanation:

Increasing water rates may increase cash receipts and credit sales of the company but it may have a
negative impact on their receivable collection. Because of the depreciation of the peso value, the Manila
Water may find it hard to pay its liabilities.

Manila Water to acquire control of Indonesian utility

Philippine Daily Inquirer
11:47 PM October 18th, 2012
Manila Water Company Inc., a unit of the Ayala group, will further expand its presence in Asia, starting
with its acquisition of a majority stake in Jakartas water supply concessionaire.
In a disclosure to the Philippine Stock Exchange, Manila Water said it had signed a share purchase
agreement with Indonesias Suez Environment to acquire the latters 51-percent equity in PT PAM
Lyonnaise Jaya (Palyja). Palyja has been operating the water supply concession contract of Western
Jakarta since 1997 under a 25-year deal with the government-owned PAM Jaya.
Palyja has a total water supply of more than 700 million liters per day, and 5,300 kilometers of pipe
network, Manila Water said. But the Philippine company noted that the acquisition is subject to certain
government and regulatory approvals in Indonesia. There are also other conditions precedent that must
be fulfilled, it added. Manila Water has been expanding both here and abroad.
In July, Manila Water announced it would acquire a 47.35-percent stake in Vietnams Kenh Dong Water
Supply Joint Stock Co., which has a bulk water supply contract with Saigon Water Corp. (Sawaco). Kenh
Dong Water Supply will also open a water treatment plant later this year.
The acquisition allowed Manila Water to widen its presence in Vietnam, which the Ayala group has
identified as one of the high growth areas for infrastructure investments. Sawaco is a state-owned
company that manages Ho Chi Minh Citys water supply.
In December 2011, Manila Water bought a 49-percent stake in Thu Duc Water BOO, another Vietnamese
company with a bulk water supply agreement with Sawaco. Thu Ducs bulk water supply contract with
Sawaco is for a minimum billed volume of 300 mld.
In 2008, Manila Water entered into a five-year performance-based leakage reduction contract with
Sawaco. Manila Water also signed an agreement with Vietnams REE Corp. and Mitsubishi Corp. to
develop water, wastewater and other environmental projects in Vietnam.
Manila Water is also exploring opportunities in India. In February 2011, Manila Water revealed that it
would submit to the Bangalore Water Supply and Sewerage Board an unaccounted for water reduction
and operation and management project.
Explanation:
Acquisition of PALYJA is a good investment for Manila Water because it will surely help them to utilize
their assets more and it could help them to pay their liabilities in the future. Ownage of 51 percent equity
in PALYJA could increase the working capital of Manila Water too. Entering into a five year performance

based leakage reduction contract by Manila Water will surely boost their expenses and may reduce their
receivables and cash for the current and next year.