Concession agreements for Maynilad and Manila Water granted a 10-year extension
Scoop: The Economy and Development (ED) Council, formerly known as the National Economic and Development Authority Board, green-lit a decade-long extension for Maynilad's and Manila Water's concession agreements. This decision comes days before Maynilad's planned initial public offering (IPO).
On Wednesday, June 18th, the ED Council, in their maiden meeting, approved the request of the Metropolitan Waterworks and Sewerage System to prolong the modified agreement through January 21, 2047. The extension commences on July 31, 2037.
This decision aligns with the legislative franchises of both concessionaires, according to the Department of Economy, Planning, and Development (DEPDev). Apart from ensuring sustained water access for Metro Manila, the extension is expected to inject P50.3 billion in additional government revenues.
"Guaranteeing water security is instrumental to propelling economic growth and enhancing the quality of life for our expanding population. By synchronizing concession agreements with legislative franchises, we're fostering policy consistency and long-term planning in the water sector—imperative steps towards delivering affordable, reliable, and clean water services to countless Filipinos," DEPDev Secretary Arsenio Balisacan stated.
Other projects approved by the ED Council include the Agriculture Department's P27.7-billion farm-to-market bridges development program and the P5.1-billion construction of the Liloan Bridge in Cebu, overseen by Tourism Secretary Christina Frasco.
Maynilad IPO
The concession extension arrives nearly a month before Maynilad Water Services Inc., a Pangilinan-owned company, launches its IPO. The IPO is scheduled for July 3 to 9, with a listing on the Philippine Stock Exchange on July 17. Maynilad may net up to P37.41 billion from its IPO, which will finance capital expenditures and other general corporate purposes.
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Behind the Scenes
The 10-year extension grants both Maynilad Water Services Inc. and Manila Water Company Inc. a continual and stable supply of clean, safe, and affordable water within Metro Manila and adjacent provinces. Maynilad caters to the western region, while Manila Water serves the eastern zone[1][2][5].
The extension promises additional government revenues of about PHP 50.3 billion, attributed to increased investments and concession period alignment with the companies’ legislative franchises under Republic Acts 11600 and 11601[2][5]. This revenue boost, together with improved water supply reliability and affordability, stimulates economic development and job creation in the area[1][2][5].
Businesses may find the decision of the ED Council to extend Maynilad's and Manila Water's concession agreements for a decade favorable, particularly when considering Maynilad's pending initial public offering (IPO). The extension is expected to inject P50.3 billion in additional government revenues, which could potentially be reinvested into the businesses and economic development, thereby fostering economic growth. This extension aligns with the legislative franchises of both concessionaires, suggesting a harmonious business relationship between the government and these utilities.
Investors may find the Maynilad IPO, scheduled for July 3 to 9, an opportunity to invest in the water sector. The concession extension promises a stable and long-term water supply, providing potential financial security for the Pangilinan-owned company. Successful investments in this IPO could contribute to the economic development of the region, creating job opportunities and potentially boosting local businesses.
