βWe are not only investing in physical infrastructure, but also the long-term viability of Iloiloβs water system,β MPIW Chief Operating Officer Angelo David C. Berba said. βUnlike proposals focused on selling bulk water at excessive rates, we are focused on service delivery, affordability, and sustainability.β
Iloilo City is moving forward with Aboitiz InfraCapitalβs (AIC) bulk water proposal despite its formal rejection by the National Irrigation Administration (NIA) and the Asian Development Bank (ADB) on legal, strategic, and cost grounds.
The city granted AIC Original Proponent Status and advanced the plan to a Swiss Challenge, keeping it alive even after NIA ruled in March that it conflicted with its advisory agreement with ADB for the Jalaur River Multi-Purpose Project Stage II (JRMP II), the intended water source.
NIA also cited violations of the Public-Private Partnership Code, which prohibits unsolicited proposals when a comparable government-backed project is underway. It said the AIC plan directly competes with the government-to-government (G2G) arrangement of the Metro Iloilo Water District (MIWD), a publicly funded scheme designed to keep water rates affordable.
At the core of this proposal is a raw water intake facility and a 23-kilometer high-line canal, for which the National Irrigation Administration (NIA) would be forced to pay the nearly β±27 billion in total βavailability paymentsβ over 33 years β even if no one uses the water. This is a blatant βtake-or-payβ scheme that transfers virtually all financial risk to the government, while guaranteeing profits for Aboitiz.
Despite the governmentβs massive payment of β±27 billion, Aboitiz plans to charge an exorbitant β±40 per cubic meter (VAT exclusive and in todayβs prices) for bulk water. At the consumer level, this translates to an estimated β±80 per cubic meter, which is double the current rate paid by Iloilo City households. This proposal would make Aboitizβs bulk water supplyβsourced from a riverβthe most expensive in the country. In the end, both the government and ordinary Ilonggos will bear the cost, while Aboitiz walks away with guaranteed profits.
By contrast, the MIWDβNIAβADB arrangement, in development since 2017, is projected to deliver affordable water without exposing local governments to contingent liabilities. In July, MIWD and NIA signed a memorandum in preparation for the allocation of 1 cubic meter per second (86 million liters daily).
Critics say the cityβs decision raises questions of policy coherence and financial prudence, given that national agencies and a multilateral lender have already backed a reasonable, legally compliant alternative. The city government has yet to explain why it is still pursuing the more expensive and riskier option.
