MPIC 2016 Core Net Income Up 17% to Record ₱12.1B

Together, Maynilad and MWIC currently provide water services to a total of 1,437,223 water connections across the Philippines.


Maynilad achieved a 4% increase in volume sold in its concession area in 2016. The number of water connections (or billed customers) rose 4% to 1,312,223 at the end of December 2016 from 1,265,625 in December 2015.

Non-Revenue Water (NRW) increased slightly to 30.6% as at the end of December 2016 from 29.3% in 2015 reflecting reduced water production in anticipation of El Nino last year. Just nine years ago, when MPIC first invested in Maynilad, NRW was at a staggering 68% and millions of customers had inadequate access to water. Just in 2016, Maynilad repaired 27,936 pipe leaks across its concession area, making possible the recovery of some 10 MLD (million liters per day) of water for its customers.

Maynilad installed 62 kilometers of water pipes in the period, expanding its distribution line to 7,637 kilometers. Drinking water supply and sewerage coverage were increased to 100% and 13% of its population, respectively, while maintaining 24-hour service and average water pressure of over 7 psi at 100%.

Maynilad cleaned a total of 96,594 septic tanks from around 175,045 households in 2016, a 53% increase from 2015. This enabled the company to collect and treat over 168,047 cubic meters of septage, in line with its goal of protecting the environment and supporting public health. Sewerage and sanitation service coverage ratios as of end of December 2016 are at 12.7% and 49.2%, respectively.

Capital expenditure in 2016 amounted to ₱9.5 billion and funded one new waste water treatment facility and pumping station, fourteen reservoirs and two water pressure boosters. For 2017, Maynilad will allot ₱13.2 billion for its water and wastewater infrastructure projects; ₱5.0 billion for sewerage and sanitation programs and ₱8.2 billion for water sources and water loss recovery.

Total revenues in 2016 rose 6% to ₱20.2 billion from ₱19.1 billion in 2015 due to the higher billed volume and inflationary increases in tariff. Core Net Income decreased by 26% to ₱7.2 billion from ₱9.7 billion mainly due to the expiration of Maynilad’s income tax holiday in December 2015.

Consolidated billed volume for Maynilad and its subsidiary Philhydro rose 4% to 511.9 MCM from 493.9 MCM.

The matter of the Maynilad tariff implementation remains unresolved as does the related claim on the Republic of the Philippines:

  • In 2014, Maynilad received a favorable award in the arbitration of its 2013-2017 water tariff which centered on Corporate Income Taxes being a recoverable expense. The MWSS has still not implemented the awarded tariff increase while indicating they will await clarification from the Supreme Court of the Philippines before proceeding.
  • Acting in formal accordance with the provisions of its concession, Maynilad has notified the Republic of the Philippines that it is calling on the Republic’s written undertaking to compensate Maynilad for losses arising from delayed implementation of the new tariff. On 27 March 2015, Maynilad served a Notice of Arbitration against the Republic. Hearings on the arbitration completed in December 2016 and we imminently expect resolution in our favor.

Securing compensation and implementation of the tariff adjustment will result in sufficient resources to fund the spending needed to meet agreed-upon service obligations.

MetroPac Water Investments Corporation (MWIC)

MWIC continues to expand its wastewater services and water supply projects outside Metro Manila.

Water projects:

  • The challenge period for the Cagayan de Oro 100 MLD bulk water supply project was concluded in January 2017 with no competing bidder. MWIC expects to be awarded the project in the first quarter of 2017. This network currently serves a population of more than 749,000 people with over 88,000 active service connections.
  • Laguna Water District Aquatech Resources Corporation commenced operation and management of the distribution network of the Laguna Water District on 1st January 2016. A year after taking-over the distribution operations, NRW averaging 27% pre-take over was reduced to 23% and service connection coverage increased to 53% from 52%.
  • Metro Iloilo Bulk Water Supply Corp. (MIB), a joint venture with the Metro Iloilo Water District (MIWD), commenced operation on 5th July 2016. MIB holds the joint venture project for the supply of up to 170 MLD of bulk treated water to MIWD. Since commencement of operations, MIB successfully increased production volume to 44 MLD as of end-December 2016 from pre-take over production of 38 MLD.

To date, MWIC’s operating water projects collectively provide 150 MLD of water in Cebu, Laguna and Iloilo.

Wastewater project:

  • In June 2016, MWIC completed the acquisition of a controlling stake in Eco-System Technologies International, Inc. (“ESTII”), a leading commercial wastewater specialist. This acquisition allows MPIC to diversify its water sector investment holdings and invest in the high-growth wastewater EPC and O&M market. As of end-December 2016, the company has 109 recurring contracts for the operation and maintenance of sewerage treatment plant (STP) facilities and 115 on-going STP construction projects.

Currently these projects are small relative to Maynilad but MPIC believes there is enormous opportunity in bringing the group’s expertise in clean water distribution and wastewater treatment to those communities outside Metro Manila that lack these basic services.


MPTC recorded Core Net Income of ₱3.3 billion in 2016, 27% higher than the ₱2.6 billion recorded a year earlier.

The growth in core income was a function of surging traffic growth, cost controls, and first full-year contributions from SCTEX and CII B&R of Vietnam. The continuing expansion and development of major road networks in northern Luzon added to the increase in traffic along NLEX-SCTEX. Average daily entries for 2016 rose 9% on the NLEX, 17% on the SCTEX and 18% on the R1 Extension of CAVITEX compared with 2015 levels.

Outside the Philippines, MPTC’s investments in Thailand and Vietnam are performing well. Contribution from Don Muang Tollway Public Company Ltd. (“DMT”) of Thailand rose to ₱425 million compared with ₱323 million in 2015 on 12% traffic growth due to lower fuel prices and higher passenger volumes at the Don Muang Airport.

CII B&R of Vietnam contributed ₱134 million to core income in 2016.

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