MCWD defends rates, financial stability

THE Metropolitan Cebu Water District (MCWD) has asserted its financial stability and defended its current water rates, responding to warnings of potential bankruptcy from Cebu City Mayor-elect Nestor Archival.

The water distributor explained in a statement on Wednesday, June 4, 2025, that it is using a “blended cost” model, which combines internally produced water with purchased bulk water.

Cebu City Mayor-elect Nestor Archival, in an interview with SunStar Cebu on Monday, June 2, warned of potential bankruptcy due to an “unsustainable” operational model that could lead to collapse within two years.

Archival cited consumers’ complaints about MCWD’s increased water rate despite inadequate supply and service.

He said the practice of buying water from bulk suppliers at P65 per cubic meter and selling it at P28 per cubic meter is unsustainable, leading him to warn that such a situation could result in privatization and possibly leading to higher prices.

MCWD countered that in 2024, revenue per cubic meter exceeded operating expenses. For the first quarter of 2025, the effective rate was higher than the blended cost, resulting in sufficient revenue.

This means that MCWD in 2024 made more money from selling water than it cost them to supply it. This positive trend continued into the first three months of 2025, where the average price it actually got from customers for water was higher than its average cost to provide that water — a situation that meant MCWD was earning enough revenue.

Tariff adjustment

However, MCWD said a tariff adjustment is needed to offset rising costs for water treatment materials, network maintenance, expansion projects and operational and personnel expenses.

MCWD filed for a 60 percent water rate adjustment with the Local Water Utilities Administration in 2022, but only received a provisional 38 percent increase in 2025.

The water district stressed it had not adjusted its rates since January 2015, and chose not to do so in 2020 during the Covid-19 pandemic. During that period, it also suspended disconnections and allowed staggered bill payments.

The provisional adjustment, implemented on March 1, 2025, raised the minimum charge for residential connections from P152 to P209.76.

MCWD said many residential consumers have seen lower bills due to the integration of the purchased water adjustment and power cost adjustment into the base rate, which reset those charges to zero.

Commercial establishments with two-inch or larger meters and daily consumption exceeding 700 cubic meters contribute significantly to MCWD’s revenues.

Still, MCWD said the full 60 percent adjustment is necessary to optimize the cost-revenue margin and support its financial sustainability.

MCWD said it is a government-owned and -controlled corporation that operates as a non-profit and on a self-sustaining basis. It receives no subsidies from the local or National Government.

Profits are reinvested into water service and infrastructure improvements.

Large-scale rehab

However, MCWD admitted current revenues are insufficient to fund large-scale rehabilitation, source development and infrastructure projects.

Securing sustainable and diversified water sources is a top priority for long-term reliability in MCWD’s

service area.

The agency seeks support from local governments in obtaining permits, right-of-way access, expedited approvals and financing for major infrastructure and sourcing projects.

MCWD also raised concerns about the need for alternative sources, such as desalination and surface water facilities, to meet growing demand, as groundwater sources are under stress. / EHP