Philippines refuses compensation for water companies

MANILA: The Philippine government will not pay over 10 billion pesos (RM833 million) in compensation for alleged revenue losses to two water distributors as ordered by an international arbitration court in Singapore, officials said yesterday.

Presidential spokesman Salvador Panelo said the basis of the court’s decision, the concession agreements with Manila Water Company Inc and Maynilad Water Services Inc were found to be “onerous” in a review by the Department of Justice.

“No, because the contracts are onerous,” he said, when asked if the government would pay the compensation.

“The (concession agreements) are very disadvantageous against the government.”

The Permanent Court of Arbitration in Singapore ordered the Philippine government last month to pay Manila Water Company Inc 7.39 billion pesos as compensation for income losses suffered between June 2015 and November 2019.

The same court ordered the government in July 2017 to reimburse Maynilad Water Services Inc of 3.4 billion pesos in revenue losses after it was not allowed to increase prices from 2013 to 2017. President Rodrigo Duterte slammed the decision, and directed criminal charges be filed against the two companies, stressing that they should consider their concession a public service and not a business they can profit from.

Justice Secretary Menardo Guevarra said the department was preparing a “serious amendment, if not a total overhaul” of the concession agreements between the government and the two water distributors.

“If the parties will not voluntarily agree by contract, we’ll take legal action,” he told Manila radio station DZMM.