Manila Water
The Poor as Profit Center
Companies in Asia are discovering that. helping the poor can be profitable
These companies, which are engaged in what is called “inclusive business,” are commercially profitable operations whose core business model is to provide large-scale innovative solutions to the problems of people who live on less than US$3 a day – or about 60% of Asia’s population.
This group of people, sometimes called the “base of the pyramid,” is neglected by many companies as customers. They are often only helped by companies through corporate charity or other programs.
“Inclusive business differs from corporate social responsibility and social enterprise because of its business scale, growth potential, and focus on systemic changes for poor people,” said Armin Bauer, a Principal Economist with the Manila-based Asian Development Bank (ADB).
Inclusive business is also distinguished from impact investments in that it places the impact on poor and vulnerable people and de-emphasizes impact on the environment or good governance, he said.
Inclusive business relies on profit-making as an incentive to improve the well-being of low-income and vulnerable populations.
Manila Water: A business model
The Manila Water Company, which provides water utility services to about seven million people in the eastern part of Manila, is an example of this business model.
The company took over as the public water provider for the eastern part of Manila in 1999. Rather than focusing on wealthy or middle class neighborhoods, the company prioritized serving slum areas, in which about one in four people had access to clean, piped water.
The company, part of listed conglomerate Metro Pacific Investments Corp., connected about a million people, mostly the poor in urban slum areas, with water and made significant profits.
“The business plan of Manila Water was to start with providing service to poor areas, not just do it as an add-on later,” said Mr. Bauer. “They upgraded service to the wealthy areas after they made substantial profits serving the poor first.”
ADB and its partners are supporting such inclusive business models through a variety of means. This includes a US$3.6 million grant that will help companies throughout Asia become better at inclusive business, or assisting the poor while making a profit.The grant will help ADB improve its expertise at making inclusive business deals with private sector companies, and also help ADB member-countries develop policies that promote businesses that directly benefit the poor.
This includes, for example, linking inclusive business startups to existing government resources, such as small business loans. Other assistance includes supporting government job creation programs thatbenefit the poor, such as slum upgrading programs and climate-proofing poor neighborhoods.
Among the potential projects to receive support this year are a cacao project and seafarers scholarships in the Philippines; spice production in Cambodia and India; a water project in China; a drip irrigation program in India; and rural bank loan projects in Pakistan and Tajikistan.Prior to this most recent grant, ADB conducted market studies in countries throughout Asia to better understand the potential for inclusive business in the region.
The studies looked at how many inclusive business companies are already operating in the region, how many financial institutions support inclusive business, the problems the companies face and possible solutions, as well as opportunities to start new inclusive businesses.
ADB’s investments in inclusive business companies have steadily increased in recent years. Six out of the 22 approved private sector projects in 2013 were considered inclusive business. This was up from 5% from the period between 2000 and 2012.
Thanks! But No Thanks!
“Thanks! But no thanks!” That is how I feel about the drainage improvement, reblocking and repaving of Balete Drive from Aurora Boulevard to E. Rodriguez Avenue in Baranggay Mariana, Quezon City. The way it was done is almost the perfect model of how such a project should be done on an important alternative route to EDSA to the East and to Gregorio Araneta Avenue to the West. Gregorio Araneta Ave. or C 3 is the base of a triangle formed with Aurora and E. Rodriquez (formerly Espana Extension.) as the legs that meet at Cubao just short of the intersection of Aurora and EDSA (formerly Highway 54).
We received a written notice from our Baranggay Chairman, Regina Celeste “Bong” C. San Miguel dated March 25, 2014, warning us residents that the following side streets would not be accessible from Balete Dr. for a period of one week during the month of April: 3rd Street, Dama de Noche, Bouganvilla and Sampaguita Streets.
The first sign of work was the raising of all the water pipe manholes (Manila Water) by about two inches. Next, came the drilling of the cement paving in the areas that were to be re blocked. My only negative observation in this age of weekend long re blockings, was that a week was allowed to pass between the drilling and the tearing up of the cement paving prior to the re cementing by blocks (I suppose that is what is meant by re blocking.).
Meanwhile, the drainage was dug up and redone in a few parts of Balete Dr., mainly in the short stretch from 3rd Street to Aurora. Unlike the EDSA re blocking that was supposed to be done “One Time, Big and Fast Time” during the Holy Week holidays (giving rise to the package deal “Bisita Iglesia cum Stations of the Cross”, the latter being the EDSA traffic one had to endure to go around the seven Churches.), Balete Dr. was finished with a new thick coat of asphalt overlay over the old cement paving by early Holy Week, Holy Monday, I believe.
I don’t know who was responsible for our Balete Dr. project – Quezon City or the National Government’s DPWH? I don’t know who was responsible for planning and implementing the project with such a high level of professionalism – the DPWH, the City or the Baranggay? The reason why I include our Baranggay Government as the possible author of such a good example is what I learned when I last attended our Baranggay Assembly several years ago.
At that time, theManila Water was digging up Dona Magdalena Hemady Avenue (a parallel North – South street between Balete and Gilmore Avenue.). Usually, when the utility companies dig up a street they just dig as wide as their drainage or water pipes require to be able to be put in place. Then, they just replaced the foundation and paving on top of the pipe, and not always in uniformity with the untouched portions of the street.
At that time, our Baranggay Council was requiring Manila Water to replace the disturbed foundation and paving block by block. Manila Water was crying “Ouch!” in the pocketbook and asked for the assistance and intervention of the then City Mayor, now Speaker Francisco “Sonny” Belmonte.
Look around the Metropolis and you will see many streets where the surface is uneven because of either the utility diggings or the repaving that has not taken account of the height of existing manhole covers. The latter results in a series of holes in perfect alignment in an otherwise new and perfect asphalt overlay (The thicker the new asphalt, the deeper the hole.).
That was the “Thanks!” to whoever – National, City or Baranggay, was responsible portion. Now, the “But No Thanks!”
My parents transferred from Santol Street at the boundary of Manila and Quezon City to our home on Balete Dr., between Campanilla and Sampaguita Streets, Rosario Heights, Cubao, Q. C. in 1941. I grew up here. I lived here since 1948 except 1974 – 1975 and 1978 – 1981. I still remember the time in the 50’s when the area bounded by Balete and Dona M. Hemady still had rice paddies. The entire block across from us on Balete was vacant except for Talahib grass and burned every summer. The main roads, Balete, Hemady, Gilmore, Broadway (now Dona Juana Rodriquez Avenue) and Victoria Avenues were asphalted. However, all the side streets were merely gravel roads.
The White Lady of Balete Drive (Garchitorena y Recto) lived at Balete, Bouganvilla and Hibiscus Streets. She haunted Balete Dr. and became the best known Ghost in the Philippines well ahead of the White Lady of Loakan in Baguio City.
There was a time when we had a Quorum of the Senate living in our community now better known as New Manila. Our Barrio was organized under the leadership of an American neighbour – Mrs. Mariana Wilkinson. The first election was held at our house when the QCPD still used Volkswagen Beetles as Mobile Units and Patrol Cars.
Gradually, progress caught up with our community, as well as with the White Lady. The main streets were cemented. The side streets were asphalted. The empty lots were filled with houses. Then, our Baranggay became a favourite for Townhouse Developers. Land values went up. Real Estate taxes went up too.
Local governments got their ERA share of National Taxes. Baranggays got their share too. They had so much money that they paved and repaved roads and streets that were good enough as residential roads. When I met Mayor Belmonte more than ten years ago at our Thursday Club at Annabel’s on Morato, I thanked him for repaving our street – Campanilla. However, I suggested that, we should have saved the money and used it for building bridges across the Diliman Creek and the San Juan/San Francisco River to decongest the few streets that do cross these water obstacles.
He agreed and informed me that that was his priority. Our road, transport and traffic planners complain that our roads are finite and limited but that the number of vehicles keeps on increasing. According to them expropriation of land and the relocation of occupants for the building of new roads is expensive and tedious. However, we have so many roads that are only partially usable because they are dead end streets due to creeks and rivers that traverse or block them.
Very little expropriation and relocation is required to turn a dead end road into a more useful alternate route to decongest the existing neighborhood thoroughfares. The cost of a small bridge is relatively small in this age of flyovers and underpasses. Some examples of these strategies are the following bridges across the Pasig River: Makati – Mandaluyong, Pandacan and Rockwell.
On the local level in Quezon City we have the example of the following bridges across the Diliman Creek: East of EDSA, we have the Kalayaan Ave/K – J/Miami and K – H/Cambridge bridges. West of EDSA, we only had the Morato Ave bridge in the 40’s. To this were added the bridges on Scout Jimenez Street (formerly Leyte Street) and T. Gener (formerly K – B Street) and the Roxas bridge behind the St. Luke’s Medical Center (QC).
Kudos MWSS: Let MWC, Maynilad Hurt
by: Mentong Laurel
LAST September 11, the MWSS denied appeals of the privatized water utilities companies Manila Water and Maynilad for water rate hikes and ordered lowering of water rates for the next five year. As a result, water rates are expected to lower by more than one peso per cubic meter starting October. This is still a far cry from the real lowering of rates that must be attained by the public to match the average water tariff in the region, but it is a good start.
Congratulations to the Metropolitan Waterworks and Sewerage System (MWSS) for taking a stand to be pro-People. Special thanks to MWSS acting chief regulator Emmanuel Caparas and his team for standing up for Public Welfare and the Public Good, against the corrupt 1997 concession agreement signed under the corporatist-enforcer Fidel V. Ramos and the compromised MWSS board members then.
The iniquitous pass-on to water consumers of corporate income tax is now ended because of Caparas’ “heroic stand” against pressures from the corporate powers and its controlled media and economist-advocates to keep the income tax pass-on privilege for their corporations. #OpinYon #MWSS #Maynilad
read cont | http://bit.ly/1fL7DlD
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- NBI probes padded list of MWSS retirees (newsinfo.inquirer.net)
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- Philippine Water Regulator Orders Companies to Cut Tariffs – Bloomberg (bloomberg.com)
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People Win vs. Corporatist Greed
by: Mentong Laurel
ON September 15, 2013 newspapers front-paged the MWSS (Metropolitan Waterworks and Sewerage System) order for water concessionaires In Metro-Manila to cut their water rates for the next five years. Manila Water for the east zone is to reduce its rate by P 7.24/cubic meter and Maynilad Water in the west zone by P 1.46/cubic meter. The two privatized and corporatized water service utilities said they will dispute the MWSS order and submit it to arbitration proceedings. Manila Water claimed the tariff reduction would compromise its ability to serve its customers fully while Maynilad said it was “unjustified”.

The two water companies applied for rate hikes. But various consumer activist groups, individual and media advocates questioned the propriety of the companies passing off its income taxes to consumers. The debate raged since June with the public weighing heavily against the water companies and its apologists on the fairness and legality of passing off income taxes to consumers. The MWSS and the advocates stood strongly on the ground provided by the Puno Supreme Court in a 2003 decision, supported by COA (Commission on Audit) findings that disallowed Meralco’s passing on income tax to consumers and granting a P 30-B refund to its five million customers. #OpinYon #opinion
read cont | http://bit.ly/1fa7vMn
Related articles
- Water firms ordered to lower rates (manilastandardtoday.com)
- MWSS denies hike plea, orders lower water rates for next 5 years (newsinfo.inquirer.net)
- Solons to probe ‘irregularities’ in setting water rates (bulatlat.com)
- Manila Water Plunges by Record on Rate-Cut Order: Manila Mover (bloomberg.com)
- Enrile, Trillanes face off over water deals (manilastandardtoday.com)
- Philippine Water Regulator Orders Companies to Cut Tariffs – Bloomberg (bloomberg.com)
- Water firms face P43-b refund bid (mst.ph)
- Consumer groups see arbitration between MWSS (business.inquirer.net)
- Trillanes, Enrile face-to-face again over water firms’ corporate income taxes (newsinfo.inquirer.net)
- Decision on water rate hike out soon (newsinfo.inquirer.net)