MCWD defends tariff hike

Local

CEBU’s water district is not profiting from its recent tariff hike, but is instead trying to survive and sustain its services.

In a statement released Wednesday, June 4, the Metropolitan Cebu Water District (MCWD) defended its water pricing structure and ongoing tariff adjustments.

It cited rising operational costs and the need for long-term infrastructure investments to address growing demand and supply challenges in Metro Cebu.

This clarification came amid mounting public concerns over what some consumers have described as “expensive” water rates despite unreliable service.

Cebu City Mayor-elect Nestor Archival earlier warned that MCWD’s current pricing model, particularly its high-cost bulk water contracts, could lead to financial instability and potential privatization within two years if left unaddressed.

MCWD said that while it does source part of its supply from bulk water providers at rates as high as P65 to P70 per cubic meter, a significant portion of its water is still produced internally at a lower cost.

The resulting “blended cost,” or average production expense, remains lower than the effective rates charged to consumers.

“For the first quarter of 2025, MCWD’s effective rate is higher than the blended cost,” the utility stated. “While this still generates sufficient revenue, the increasing costs of water treatment materials, infrastructure maintenance, and personnel expenses necessitate a tariff adjustment.”

The water district emphasized that it operates as a non-profit, government-owned and controlled corporation, and that every peso it earns is reinvested into improving services, securing future supply, and expanding water access.

By law, MCWD’s earnings are capped at 12 percent per cubic meter and are not subsidized by local or national government funds.

To support its 10-year strategic plan, MCWD said it applied for a 60 percent water rate adjustment in 2022 with the Local Water Utilities Administration, but has so far only been granted a 38 percent provisional increase.

This provisional tariff took effect on March 1, 2025, raising the minimum charge for residential use (0–10 cubic meters) from P152 to P209.76. Tiered rates apply to higher consumption.

Despite the increase, MCWD said many households actually saw reduced monthly bills after it integrated the Purchased Water Adjustment and Power Cost Adjustment into the base rate, resetting those additional charges to zero.

This clarification followed public comments from Archival, who earlier criticized MCWD’s pricing and water supply system. He cited the case of the bulk water rate with Cebu Manila Water Development Inc. (CMWDI), a former joint venture partner that charged MCWD P65 per cubic meter while MCWD sold to consumers at P28, an arrangement he said was financially unsustainable.

According to a local news report, Archival expressed concerns that MCWD may be headed toward collapse, potentially leading to privatization and even higher rates.

He also questioned the transparency of contracts with suppliers like CMWDI and stressed the need for more accountability in the MCWD board.

MCWD did not address these specific remarks directly, but noted that while it continues to operate in a financially stable manner, it needs the full 60 percent adjustment to secure future viability.

The revenues collected are sufficient for daily operations, but not enough to fund massive infrastructure upgrades, the agency said.

MCWD pointed out that it had not applied for any rate increase from 2015 to 2020 and even delayed its application due to the COVID-19 pandemic, choosing instead to suspend disconnections and allow staggered payments to ease the burden on consumers.

The utility also highlighted the urgent need to develop new water sources, including surface water and desalination, as groundwater in Cebu has been increasingly compromised due to over-extraction, contamination, and saltwater intrusion.

However, several planned expansion projects have stalled due to delays in obtaining permits and support from local government units.

“As MCWD continues to responsibly manage its resources, rising operational costs, environmental pressures, and infrastructure gaps present growing challenges,” the statement read. “Sustaining financial stability requires forward-looking decisions—and the tariff adjustment is a critical step in that direction.”

MCWD reiterated its appeal for support from LGUs in facilitating permits, expediting project approvals, and aiding in financing large-scale water source development.

The district remained firm in its mission to provide an adequate and sustainable water supply to its consumers.

“With the continued partnership of consumers and local government units, MCWD is confident in its ability to deliver on its mission—not just for today, but for the decades ahead,” it said.(TGP)