MCWD: No looming shutdown due to financial obligations

Local

THE Metropolitan Cebu Water District (MCWD) acknowledged it has outstanding obligations to bulk water suppliers but clarified that no final ultimatum has been issued and there is no imminent risk of a water supply shutdown.

In a statement, MCWD Information Officer Minerva Gerodias said the utility is under fiscal strain largely due to a long-standing pricing model where it purchases bulk water at significantly higher rates than what it charges consumers.

“We have been transparent about our current fiscal strain. This is primarily due to a long-standing ‘buy high, sell low’ model where we purchased bulk water at ₱43 to ₱78 per cubic meter but sold it to consumers at an average of ₱45 per cubic meter,” Gerodias said.

She confirmed that MCWD does have outstanding obligations to suppliers but stressed that the utility is actively coordinating with them while restructuring its payment arrangements.

“We do have outstanding obligations but we are in active communication with our bulk water suppliers. While we are restructuring payment schedules, such as moving toward a 90-day settlement cycle to better manage cash flow, our partners understand that the continuity of water supply is a shared priority,” she added.

Gerodias also addressed reports circulating online that MCWD had been given an ultimatum that could result in the suspension of water supply if unpaid debts are not settled.

She said these claims are inaccurate.

“MCWD has not been given a final ultimatum that would result in a water supply shutdown,” Gerodias said.

She acknowledged that some suppliers have issued demand letters regarding unpaid obligations but clarified that these are standard business communications.

“While it is true that we have received demand letters from some of our bulk water suppliers— which have maliciously been leaked to the media—these are a standard part of business-to-business communication and do not signify a looming service interruption,” she said.

Gerodias explained that delays in payments are often linked to the strict procedures government-owned and controlled corporations (GOCCs) must follow when disbursing public funds.

Unlike private firms, MCWD must comply with Commission on Audit (COA) regulations that require extensive documentation before payments can be released.

“In many cases, the delay in payment is not due to an inability to pay, but rather the time required to fulfill these stringent requirements for disbursement of public funds,” she said.

MCWD said it is implementing several measures to stabilize its finances and address its obligations to suppliers.

Among these steps is the water tariff adjustment implemented in 2025, which the utility said is helping bridge the gap between production costs and revenue.

The district has also established a repayment roadmap with suppliers that outlines scheduled payments for outstanding obligations.

At the same time, MCWD is focusing on reducing Non-Revenue Water (NRW)—water lost due to leaks, illegal connections, or system inefficiencies—from about 30 percent to 25 percent by the end of 2026.

Gerodias said achieving this target could recover more than ₱109 million in annual revenue.

“By prioritizing NRW management and pipe rehabilitation projects in the 2026 budget, we aim to reduce water loss to 25 percent by year-end,” she said.

The utility has also implemented cost-cutting measures to limit non-essential spending.

Despite the financial pressures, MCWD assured consumers that the situation will not disrupt water services.

“There is no looming water shutdown due to our financial obligations,” Gerodias said.

She noted that the main risks to water service interruptions are external factors such as power outages or infrastructure damage from extreme weather events, rather than financial defaults.

MCWD also highlighted its 2026 infrastructure roadmap, backed by an ₱800-million budget intended for system expansion, pipe rehabilitation, and NRW management projects.

“These efforts are meant to secure Metro Cebu’s water future and ensure a stable, long-term supply for every household,” Gerodias said.(TGP)