No more probe on taxes charged by water firms to consumers—Enrile

Senate President Juan Ponce-Enrile. INQUIRER FILE PHOTO

MANILA, Philippines –Former Senate President  Juan Ponce-Enrile saw no need for Congress to investigate the income tax payments and other expenses being charged to consumers by two water concessionaires, saying that “interested” lawmakers  should just file a case before the Supreme Court.

“What can Congress do? They cannot pass a law to impair the obligation of the contract between the contracting parties,” Enrile said in an interview Monday.

“Eventually, they will have to bring it to the court. Those who are interested legislators, they will have to file a case in court.”

“There is no need to investigate this. If they really believe this erroneous contract entered into by the MWSS, then they should now get their lawyers and study it and then file the case,” he said.

It was Senator  Ralph Recto who sought a Senate inquiry into the reported income tax payments that the Maynilad  Water Services Inc. and  Manila Water Inc. had allegedly  passed on  to their consumers, a move that immediately got  the support of his colleagues, Francis “Chiz” Escudero and neophyte Senators Nancy Binay and Paolo Benigno “Bam” Aquino.

Recto’s move was prompted by a revelation of consumer advocacy group Water for the People Network (WPN) that Maynilad and Manila Water had allegedly passed on their income taxes to water consumers, which had reached P15.5 billion from 2008 to 2012 or P3.1 billion a year.

Aside from income tax payments, WPN claimed that the two concessionaires had also charged to consumers other business-related expenses including those for foreign trips, entertainment and recreation as well as those for advertising, gifts, flowers and other tokens for all occasions.

But Enrile expressed doubts whether Congress has the power to intervene since the concession agreements were signed between the two concessionaires and the Metropolitan Waterworks and Sewerage System (MWSS), a government-owned and controlled corporation.

While it was Congress that granted the MWSS the franchise to put up a distribution system of water in Metro Manila, the franchise did not govern the contracts signed with the two water concessionaires.

“They do not have any franchise because the franchise holder is MWSS. They were given a contract and the one that governs that contract is not a law, not the franchise of MWSS but the contract between MWSS, representing the government and Ayalas in the case of Manila Water, and the owner of the Maynilad, used to be owned by the Lopezes and I think now it was passed on to Mr. (Manny) Pangilinan,” he explained.

Enrile said the government could not just disregard the contract without the consent of involved parties.

“Now the only remedy here of the government would be to renegotiate the contract if the parties agree,” he said.

“You cannot change a contract in mid-term. You have to renegotiate it,” said the senator.