MCWDjustifies rate increases and financial security
Cebu's Water Woes: MCWD Stands Firm Amid Bankruptcy Worries
The Metropolitan Cebu Water District (MCWD) has been rallying back against bankruptcy fears, reassuring its financial stability and maintaining its current water rates. Recently, these claims were met with skepticism by Cebu City Mayor-elect Nestor Archival.
MCWD's defense began with a detailed explanation of their "blended cost" model, an economic strategy that blends internally produced water with bulk water purchases. Archival, on the other hand, raised concerns about the unsustainable nature of this model, pointing out the practice of buying water at P65 per cubic meter only to sell it at P28.
Despite Archival's warnings, MCWD proudly declared that their revenue per cubic meter exceeded operating expenses in 2024, continuing through the first quarter of 2025. In other words, MCWD made more money selling water than it cost to supply it.
However, the water district acknowledged the necessity of a tariff adjustment to offset increasing expenses related to water treatment materials, network maintenance, expansion projects, and operating and personnel costs. In 2022, MCWD requested a 60 percent water rate adjustment, although they only received a provisional 38 percent increase in 2025.
The recent adjustment raised the minimum charge for residential connections, while many residents have reported lower bills due to revised adjustments impacting power costs. Commercial establishments with larger water consumption contribute significantly to MCWD's revenues, but the full 60 percent adjustment is still needed to optimize the cost-revenue margin and ensure financial sustainability.
MCWD operates as a government-owned and -controlled corporation, acting on a non-profit and self-sustaining basis. The district emphasizes its lack of subsidies from either the local or National Government, with generated profits being reinvested into water service and infrastructure improvements.
With revenue insufficient to fund large-scale rehabilitations, sourcing, and infrastructure projects, MCWD seeks assistance from local governments to expedite approvals and financing for crucial developments. The agency also advocates for alternative sources, such as desalination and surface water facilities, to combat growing demand and groundwater stress.
While MCWD maintains financial stability, there are ongoing concerns about the long-term sustainability of the district's operational model, potentially leading to future rate adjustments based on market conditions.
Insights
- MCWD is collaborating with Vivant Hydrocore Holdings, Inc., which could improve operational capacity and influence future financial decisions.
- Unlike other water districts such as Metro Pacific Iloilo Water, MCWD is focusing on maintaining its financial stability without major infrastructure investmentsmentioned.
The Metropolitan Cebu Water District (MCWD) is collaborating with Vivant Hydrocore Holdings, Inc. to enhance its operational capacity and potentially impact future financial decisions. In the context of COVID-19, MCWD remains committed to maintaining its financial stability, a marked difference from water districts like Metro Pacific Iloilo Water that prioritize significant infrastructure investments.
