Gov't won't be paying Maynilad, Manila Water

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The government will not be honoring the ₱10.8 billion refunds to water firms despite the ruling of an international tribunal, Presidential Chief Legal Counsel Salvador Panelo says.

Metro Manila (CNN Philippines, December 5) — The government would not pay a single centavo from the billions of refund sought by Maynilad and Manila Water, President Rodrigo Duterte said Thursday.

"Pag dinemanda nila tayo, hindi ako magbayad ng P7 billion...Leche, pakain ko yung pera sa kanila," said Duterte in a briefing at Legazpi, Albay.

[Translation: If they sued us, I will not pay P7 billion...Stupid, I'll make them eat the money.] 

The frustrated president already threatened to sue for economic plunder water concessionaires and former government officials following the tribunal's ruling demanding the Philippines to pay ₱7.39 billion to Manila Water. The Ayala-owned firm brought the government to court for refusing rate hikes from 2013 to 2017, citing its concession deal which pushes the state to "indemnify" the utility firm against any losses that could result from regulatory actions.

Earlier, Presidential Chief Legal Counsel Salvador Panelo shared the same sentiment, saying the dues come from "onerous" supply deals.

"Hindi, kasi nga onerous ang kontrata, masyadong disadvantageous sa gobyerno [We won't pay because the contract is onerous and is too disadvantageous to the government]," Panelo told DZXL on Thursday morning.

Instead, Panelo said Duterte has ordered to revisit and draft new water supply contracts to remove lopsided provisions favoring the businesses. The legal adviser said this review falls within the President's mandate.

READ: New deal to remove Maynilad, Manila Water power to pass on corporate expenses to consumers

"Sa Saligang Batas, ang pangunahing tungkulin ng Pangulo ay pagsilbihan at proteksyunan ang taumbayan [In the Constitution, the primary task of the President is to serve and protect the people]. On the basis of that, the President can do things that can either annul or rescind contracts agreed (which are) against the interest of the people and against public policy," Panelo said. 

He also alluded to collusion between the owners of the water concessionaires and the government officials who signed the supply deals back in 1997. He said all of them would be charged with economic sabotage.

READ: Manila Water open to compromise with gov't for ₱7.4B refund

The Pangilinan-led Maynilad also won a case demanding a ₱3.4-billion reimbursement for losses incurred from March 2015 to August 2016.

The Department of Justice has been tasked to review the details of the supply deals. Panelo has named several one-sided provisions such as those demanding indemnification from the government for any losses incurred by the water company, as well as stopping state intervention in setting utility rates.

Panelo said the administration views water as a "natural resource" rather than a commodity to be sold. Both Maynilad and Manila Water said they are willing to find a compromise with the national government to settle the arbitration cases.