Metro Pacific Investments Corp. (MPIC) said the government’s approval of its units’ petitions for tariff rate increases has made it easier for them to tap loans for their projects.
With the approvals, company officials said the banks “have started to open,” and have offered additional financing facilities to bankroll projects.
In the company’s tollways business, Metro Pacific Tollways Corp. CFO Christopher Lizo said the company’s tariff adjustment is delayed by just one cycle, from the previous three cycles.
“So in 2023, we got seven tollway petitions approved. And we have implemented those approved petitions,” Lizo told reporters in a recent interview.
“So in fairness to the current government, they have been approving the petitions as we file them. We have filed a petition for an adjustment for 2023. We expect that this will be approved, but from an implementation timing perspective, because we’re still catching up with what we have lost for the past six years, it’s also impractical to implement (the tariff hikes) all at the same time.”
For Light Rail Management Corp. (LRMC), the operator of LRT 1 and 2, the company’s tariff adjustment is late by just one cycle, according to company CEO Juan Alfonso. He said LRMC has secured its tariff adjustment last August.
“The tariffs have fallen behind them. We have another tariff increase that is actually scheduled based on our concession agreement for 2024. And then also, the completion of the Cavite extension also allows us to get an increase in 2024,” he said.
“You know, tariff judgments allow the operator to continue to make improvements to invest in operation and maintenance to keep the system safe. Unlike other concessions, we don’t have an automatic inflation adjustment or a foreign currency adjustment. So these increases are very important for us in the railways.”
Ramoncito Fernandez, Maynilad Water Services Inc. president, meanwhile, said that the water concession was also granted a tariff increase last January. Maynilad is the West Zone concessionaire.
“The first tranche was already granted to us last January 2023. The next one is for January of 2024, and so on. So in January, we are expecting a tariff increase of roughly 16 percent.”
He said the tariff increases are needed for the high-capital spending requirements of the company to improve its service.
“As we speak, climate change has really been driving a lot of changes in our service capability. Our raw water has been really very variable and also our NRW [non-revenue water] plans have already been hit by the pandemic because we were not repairing anything during the pandemic because the lockdown really prevented us from coming in,” he said.
“Even our sewerage projects were stopped, because of the concession review. No one was lending to us during the concession review. So, this catch-up is a must-have if the Filipinos or Metro Manila will continue to be experiencing service improvements.”
June Cheryl Cabal-Revilla, MPIC’s chief finance officer, said the approval of the tariff adjustments allow the company to “operationalize” the public service that the private sector is doing on behalf of the government as a regulated business operator.
“And if we only stand back, all the things that we’re doing now are used to be government run. And because there are many complaints in terms of quality and servicing the department, it had to be privatized, and thus we are all here. We’re all on the same side of providing good public service to everybody,” she said.