‘They are screwing us’: Duterte slams Ayalas and Pangilinan for allegedly onerous water contracts

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President Rodrigo Duterte yesterday lashed out at water concessionaires Maynilad and Manila Water a week after the latter was awarded damages in a court case against the government at the Permanent Court of Arbitration in Singapore.

The court ordered the Philippine government to pay the Ayala family-owned Manila Water PHP7.39 billion (US$144 million) to compensate it for losses suffered between June 2015 to November 2019, CNN Philippines reported. In 2018, the government was ordered to pay Maynilad PHP3.4 billion (US$66.5 million) by the same Singapore court because the Philippines refused to allow it to increase prices from 2013 to 2017.

While the government manages the country’s dams, the water is treated and distributed to consumers through Manila Water and Maynilad, companies with whom the government has longstanding contracts dating back to 1997, during the administration of then-President Fidel Ramos. In a speech in Malacañang Palace yesterday, Duterte complained that the decades-old contracts were onerous.

“There is a lot of water. The problem is we gave it to awkward people who are not Filipinos, or if they are Filipinos they have no souls— Manila Water and Maynilad. To Pangilinan and Ayala,” the president said.

“It has been been a longstanding issue, but no one is going after them because they are afraid the Ayalas and [Maynilad CEO Manny] Pangilinan will not give them money, especially during the elections. You need them. No one will talk. But when I saw the contract, I said, ‘Son of a bitch. They are screwing us. And they are screwing us all the way.’”

Duterte also lamented that the government cannot dictate to the two companies how much they should charge their consumers.

“They are the distributors, yet the water belongs to us. In the contract, the water is categorized not as a natural resource, but as a commodity. And the painful thing is, we cannot interfere,” Duterte added.

“We must not do anything to jeopardize their operation. If at any given period or during the lifetime of the contract, if they lose the money you have to pay for the losses.”

He then went after opposition Senator Franklin Drilon, a vocal critic of many Duterte allies.

“I have nothing against Drilon, but I distinctly recall Drilon said something [like] ‘President Duterte, do not tinker with that contract because we will end up paying so many billions of pesos.’ Senator Drilon, are you one of those who drafted the contract? I’m asking you. I’ve said I’m ready to go down. I’m not scaring you, but if I fall I will bring you down with me,” Duterte said.

“If we interfere in the pricing, we will get sued. You Filipinos, how many years have you been paying for water treatment? You’ve been paying it for so many years until now the water that comes out stinks. You f**kers, you did not treat the water but you still charge for it. Son of a bitch.”

It was also yesterday, shortly before Duterte’s testy speech, that Justice Secretary Menardo Guevarra told reporters that his department reviewed the contracts with Maynilad and Manila Water and found that they were allegedly disadvantageous to the government and consumers. He also singled out as particularly onerous the “prohibition against government interference in rate-setting and the provisions on indemnification for possible losses in the event of such government interference.”

He added that the extension of the contracts until 2037 was highly irregular because it was granted at least 13 years before the contracts were set to expire in 2022.

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