Public-private partnerships under fire for soaring utility costs

MANILA – From water, electricity, up to transportation, the government’s public-private partnership (PPP) projects continue to be “profit-driven,” which, according to multisectoral groups, is the culprit behind the increasing prices of social services and basic commodities.

In a press conference, July 2, consumer network Samahan at Ugnayan ng mga Konsyumer para sa Ikauunlad ng Bayan (SUKI) said that the private firms running public utilities for profit through government-sanctioned PPP should be state-regulated at the very least, and stopped at most.

“From various sectors, we are here to call for the end of the government’s privatization of basic necessities,” Amihan Mabalay, spokesperson of SUKI, said in Filipino. “It puts the burden on the masses while the oligarchs are swimming in profit from the rates they are imposing on us.”

Electricity 

Malabay said that the Philippines is one of the countries in Southeast Asia with the highest electricity rates, together with Singapore. 

“A minimum wage earner must pay around P2,000 ($35) monthly as each kilowatt hour costs P13 (less than $1), taking a big chunk out of their meager incomes,” said Mabalay. 

In April 2025, Manila Electric Company (Meralco) announced an increase of P0.7226 per kilowatt-hour (kWh), bringing the overall rate for a typical household to at least P13 per kWh. Workers in the National Capital Region (NCR) earn P695 ($12) (non-agriculture sector), while P658 ($11) for workers in agriculture sector, service, retail establishments with 15 or fewer employees, and manufacturing establishments.

This amount is already a big burden for ordinary Filipinos, Mabalay said, compared to oligarchs who continue to earn billions of net income. Meralco alone reaped a huge P45.1 billion ($799 million) in net income last year. The quality of electricity is also marred with frequent outages as the average Filipino household experiences 28 electricity supply interruptions in a year, according to a 2024 report of the Philippine Institute for Development Studies.

She further emphasized that the Electricity and Power Industry Reform Act (EPIRA) did not bring down rates as promised for 24 years. Under this law, the Energy Regulatory Commission (ERC) shall “promote competition, encourage market development, ensure customer choice and discourage/penalize abuse of market power in the restructured electricity industry.”

However, this has not been the case. Independent think-tank Ibon Foundation said in its research that the power industry is primarily dominated by Aboitiz Equity Ventures, San Miguel Corporation, and First Gen Corporation. Meralco is run by Pangilinan Group and Gokongwei, followed by Visayan Electric Company and Davao Light and Power Company, both owned by the Aboitiz. 

Under EPIRA, no company or related group can own, operate or control more than 25 percent of the national installed generating capacity or more than 30 percent of installed generating capacity of a grid. Distribution utilities cannot own, operate, or control power generation facilities; likewise, generation companies cannot own distribution utilities. Ibon noted, “Yet despite these restrictions, the generation and distribution sectors are dominated by the Pangilinan, Gokongwei, Aboitiz, and San Miguel groups.”

Water 

The privatization of water services puts consumers at a grave disadvantage. 

Leigh Joson Espelimbergo of the Water for People Network (WPN) said that this has been alarmingly evident with the joint venture agreements (JVAs) of the local water districts to the Villar-owned PrimeWater.

According to the 2021 report of Manila Bulletin,  Local Water Utilities Administration (LWUA) administrator Jeci Lapus said that PrimeWater already took over 100 water districts “and counting” in that year alone.

Murky waters, limited water supply, increasing water rates, employee retrenchments, and growing financial losses for local water districts– these have been the major impacts of PrimeWater’s takeover to the local water districts, WPN said. 

“Initially, only the stark cases of San Jose Del Monte and of Bacolod consumers and water district employees stood out,” WPN said in a statement. “But today, calls to terminate JVAs with PrimeWater are emerging in other Bulacan municipalities and Zambales, Pampanga, Pangasinan, La Union, Cavite, Laguna, Quezon, Camarines Norte, Albay, and Cebu.”

Espelimbergo also emphasized that in most cases, the community was not informed of the takeover of PrimeWater. “Even now when investigations are being conducted, the consumer does not know anything about it. In San Fernando La Union, the agreement with PrimeWater was terminated because of recurring problems in their services. However, the company filed a temporary restraining order, prompting their agreement to remain in place.”

The regional chapter of WPN in La Union said that the decision of the San Fernando Regional Trial Court was unacceptable and a setback for the consumers in the province. 

“It is disappointing that the RTC still favored PrimeWater despite overwhelming evidence of its incompetence and failure to fulfill its obligations and commitments under the Joint Venture Agreement (JVA) between PrimeWater and MSFWD signed in 2016,” the group said in a statement.

Backed by the community leaders and advocates present in the press conference, the network called for the swift termination of JVAs where firms are “proven guilty of wrongdoing and undermining the right to water”, for the contract to be made publicly available, and consumers to be represented and consulted in the process of investigation.

Airport fees

Josie Pingkian of Migrante International said that consumers and Overseas Filipino Workers (OFWs) bear the brunt of privatizing Ninoy Aquino International Airport. “The rehabilitation and maintenance of the operation of NAIA should be at the hands of the government, not a big corporation,” she said in Filipino during the press conference.

Ramon Ang’s San Miguel Corporation (SMC) officially took over the management and operations of NAIA in September 2024, through its subsidiary New NAIA Infra Corp (NNIC). Notably, SMC also owned the New Manila International Airport (NMIA), which the Global Witness (GW) identified as a “disaster-prone project.” The $15 billion project has also displaced 700 families, many without adequate compensation, and caused irreversible damage to the country’s critical ecosystems.

What are the fee adjustments?

• Terminal fees: P950 ($16) terminal fee for international flights, from previous P550 fee. P390 ($7) terminal fee for domestic flights, from previous P200 ($4) fee.
• Rental rates: Rental rates for the concessionaires have already increased to P3,200 ($56) per square meter from P700 ($12) per square meter.
• Landing and take-off fees: Fees charged to airlines have nearly doubled, according to Transportation Secretary Jaime J. Bautista.

“Privatization will add more burden to OFWs who return home each year. Even before they leave the country, OFWs already face numerous charges imposed by the government and recruitment agencies. From the rising cost of flight tickets to and from the provinces, to the increasing terminal fees, this will become an added burden for our OFWs and their families,” said Pingkian.

She also emphasized that while the OFWs are exempt from travel fees and terminal taxes, they still have to go through a process of refund. In some cases, OFWs do not have their overseas employment certificate (OEC) yet, which is required to process the refund.

Meanwhile, SUKI also said that the announced fee changes have been laid down without proper consultation, “violating the Public-Private Partnership (PPP) code itself.” They called on the administration of Marcos Jr. to suspend any fee increases while cases are still pending before the Supreme Court against the privatization of NAIA.

The high court has been urged to declare as unconstitutional the Manila International Airport Authority (MIAA) Administrative Order No. 1, series of 2024, which entails the fee increases, and the PPP agreement with SMC. Lawyers Joel Butuyan, Ma. Soledad Derequito-Mawis, Antonio Gabriel La Viña, Roger Rayel, and Jose Mari Benjamin Francisco Tirol said that the bidding violates the provisions of the new PPP code and the adoption of fee increases lack “genuine and meaningful public participation.”

Continuing fight

Urban poor leader Mimi Doringo said that the P50 ($1) wage increase in the National Capital Region (NCR) will mean nothing to ordinary Filipinos if the prices of basic social services continue to surge.

The National Wages and Productivity Commission (NWPC) recently approved a P50 daily wage increase for the minimum wage earners in the National Capital Region. 

“Now as before, we reiterate our call that public service should not be treated as a business. Remove taxes on our basic needs, such as value-added tax and excise tax,” said Doringo.

During the recently concluded 19th Congress, the Makabayan bloc filed House Bill 8079, seeking to prohibit electricity distribution utilities from owning stakes in power generation companies and retail electricity suppliers. The bloc also filed House Resolution 2279, calling for an investigation into PrimeWater’s alleged failure to deliver reliable, safe, and affordable water services.

Makabayan lawmakers ACT Teachers Partylist Rep. Antonio Tinio and Kabataan Partylist Rep. Renee Co both reaffirmed that they will continue to oppose privatization and refile bills that seek to end the profit-driven PPPs.

“What they are doing now is an anti-competitive behavior, and we are seriously questioning it. It is one of the issues that the Makabayan bloc is actively pushing. We need to question it or reverse the whole policy,” Tinio said. (AMU, RVO)

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