Customers of east zone concessionaire Manila Water Company Inc. will see slightly lower water rates at the start of the third quarter of the year, as a result of foreign exchange savings.
In a disclosure to the Philippine Stock Exchange, Ayala-led Manila Water said that it will implement a downward adjustment of P0.54 per cubic meter because of the foreign currency differential adjustment (FCDA), based on the exchange rate of $1:P41.14 and 1 yen:P0.4221.
“The FCDA component of the water bill will be adjusted from negative 0.37 percent of the second quarter of 2013 to negative 1.97 percent of the basic charge for the third quarter of 2013,” Manila Water said.
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.
The foreign currency differential adjustment goes down whenever the peso strengthens against foreign currencies, and it goes up whenever the peso depreciates.
The Metropolitan Waterworks and Sewerage System-Regulatory Office reviews the FCDA quarterly and the adjustment is applied to the basic tariff for every month of the following quarter. The FCDA has no impact on the projected net income of the company.
The east zone covers parts of the cities of Quezon and Makati, the southeastern parts of Manila, Taguig, Marikina, Pasig, San Juan, Mandaluyong, the municipality of Pateros, and Rizal province.