President Rodrigo Duterte had exposed a collusion between an unnamed rival in the 2016 elections and water concessionaires to dupe the public on the suspension of water rate increases that the government was later on required to reimburse through a ruling of a Singapore-based international tribunal.
In an address after leading the distribution of benefits to former rebels at the San Isidro Civic Center (SICC) in San Isidro, Leyte on Thursday night, the President said in his native Visayan dialect that the rate increases were suspended in 2013 to lift the popularity of the then incumbent.
“I looked into it when they incurred losses because the politicians blocked them from increasing their rates because of the elections. That is when I learned about it. They thought I wouldn’t win,” Mr. Duterte related.
“Just like all of you here. You didn’t expect me to win. Did you think I would win? You didn’t, right? But the problem is I won. And that is when everything got messed up,” he revealed.
The entities behind the water firms, the Ayala group for Manila Water and magnate Manny V. Pangilinan for Maynilad are known backers of former President Benigno Aquino III and his Liberal Party.
In September 2013, regulator Metropolitan Waterworks and Sewerage System ordered Manila Water and Maynilad to reduce tariffs by 29.47 percent and 4.82 percent respectively in five equal annual tranches over five years after it found “the utilities were unable to justify the need for higher rates based on their business and investment plans.”
The companies appealed against the decision at the International Chamber of Commerce which reversed the order against Maynilad in December 2014, allowing its tariffs to increase by 9.8 percent.
Later on, in November 2019, the Singapore tribunal ordered the government to pay Manila Water P7.4 billion covering alleged four years of losses the company suffered from disapproved rate increases.
Thieves in ties
The President noted that pressure was applied on the government to comply with the international tribunal’s ruling through water supply disruptions.
“No, really. I was tipped off about their scheme when Manila went two weeks without water. So I kept on asking if there really was no water. I found out that there was in fact plenty of water. At the time, I just kept on cursing,” he noted.
Noting that both billionaires “are listening now because this is being broadcasted nationwide.”
“Well it’s good for them to hear this. They have violated the rights of the people. They are just distributors of water yet they have become millionaires, while the Filipinos have lost. That’s why I am angry at them,” he expressed.
“Do not deceive the Filipino. Because the water problem, in case it’s not yet clear to you, their contract states that they are the only ones who can increase their rates. Not decrease. Only the increase of rates was stated in the contract,” the President indicated.
Onerous pass ons
The President also lamented that the water firms collect both their income tax payments and losses as pass on expenses to water users.
“And then the income tax which they had to pay the government covers everyone. Our salaries before you receive them are taxed at source, which means the tax is deducted automatically. That’s what they have stated in the contract which they could pass on to those who consume water, the Filipinos. That’s what makes it bad,” the President said.
“When they apply for a rates increase, it would have to be checked by a regulator, who is also an inutile son of a b****, he has to check it. And the losses incurred during that period will be charged to us,” according to the President.
“Where else would you see that? We pay the losses of their company. That’s how bad they have gotten the Philippines into. And the officials back then agreed to it. Sad to say … But it started during the Ramos administration. During Arroyo’s term, they extended the contract. From 1997 they extended it until 2037. The contract will end in 2037,” President Duterte added.
“There are rich people in the Philippines who are crazy (and) they’re the ones whom we should kill… Just like Ayala and Pangilinan who own Globe and Smart. They are all thieves, those sons of b******. That’s the whole truth,” the President said.
“Now we are fighting. I told them to try their best. If they kill me… That’s what I’ve been telling the military. We have the same duties. We love our country. And if I don’t get to the finish line, don’t give up on this fight against the rich people because… To use a very obscene word, they really f***** us,” he added.