Review of water concessionaires contract will not discourage investors

MANILA, Philippines — The government’s move to review contracts with water concessionaires is unlikely to discourage investors from coming to the Philippines, said the head of the country’s lead investment promotion agency.

“President (Duterte) has issues with some provisions of the contracts and some are saying it would affect investor confidence. I think it won’t because sanctity of contract is there. That’s the norm. But for this contract (with water concessionaires), it is one-sided so it was ordered to be revised. Not all contracts with governments have these provisions,” Trade Secretary and Board of Investments (BOI) chairman Ramon Lopez told reporters.

He said the purpose of the review of the contract is to make sure there are no onerous provisions.

“So, in my view, this (review) is not creating uncertainty outside as what others might say…It (contract) has to be corrected. That’s the point there and what the President wants. You have to agree on a contract without the so called onerous (provisions),” he said.

Earlier, Metropolitan Manila Waterworks and Sewerage System (MWSS) announced there would be no extension to the concession agreements with Maynilad Water Services Inc. and Manila Water Co. Inc. after their expiration in 2022.

The MWSS later on clarified the extension of the concession agreements has not been revoked and would still be subject to renegotiation.

It also said it would present revisions to the concession agreements to the water concessionaires after the Department of Justice comes up with a draft.

This, as existing concession agreements are seen to have onerous provisions which include prohibiting government from interfering in the setting of rates