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July 27, 2015

TV 5 News: Rollback water rates after ICC ruling

May 31, 2015 12:47 PM means BUSINESS
MANILA - Following the International Chamber of Commerce (ICC) ruling classifying private water concessionaires as “public utilities” that cannot pass on their corporate income taxes to consumers, a senior member of the Philippine Congress has called for a rollback in water rates across the country.
“We are convinced that piped-in water consumers nationwide are entitled to refunds and lower rates, once all private suppliers, including those in the provinces, voluntarily comply with the new ICC verdict,” said House Deputy Minority Leader and LPG-MA Rep. Arnel Ty in a news release.
“Otherwise, water district regulators, including those in the provinces, should compel private distributors to immediately stop their unfair business practice of conveying their corporate income tax burden to consumers,” said Ty, who represents the minority bloc in the House trade and industry committee.
An ICC appeals panel recently concluded the arbitration proceedings between Manila Water Co. Inc. and the Metropolitan Waterworks and Sewerage System (MWSS) with a decision that Manila Water “is a public utility whose corporate income excises should be excluded from the cash flows used for the determination of tariffs.”
“The ruling basically means that being public utilities, private water contractors and providers cannot recover their corporate income tax payments to government by charging these obligations back to consumers via higher rates,” Ty pointed out.
Manila Water has already agreed to lower its tariffs retroactively to comply with the ruling, but the MWSS’s other private concessionaire in Metro Manila and surrounding areas, Maynilad Water Services Inc., has yet to conform with the judgment.
In a formal notice to Maynilad Water, the MWSS has already vowed to “have the issue on the recoverability of corporate income tax, along with its underlying issue pertaining to public utilities, finally resolved in a court of law,” if necessary, according to Ty.
Maynilad Water serves more than eight million consumers in 17 cities and municipalities in Metro Manila and Cavite.
Manila Water serves more than six million consumers in 23 cities and towns in the National Capital Region and Rizal.
Manila Water also has three subsidiaries in the provinces: Laguna AAA Water Corp., Boracay Island Water Co., and Clark Water Corp. A fourth subsidiary also provides bulk water in Cebu. 
The Paris, France-based ICC is the world’s largest and most representative business organization, with thousands of member companies that have interests spanning every sector of private enterprise in over 180 countries.
ICC is engaged in rule-setting, dispute resolution, and policy advocacy. Because its member firms and groups are themselves engaged in international business, ICC has unrivalled authority in establishing rules that govern the conduct of enterprises across borders. Though voluntary, these rules have become part of international trade and are observed in countless transactions every day.
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