CDO water utility seeks 68-percent tariff hike

CAGAYAN DE ORO CITY – The Cagayan de Oro City Water District (COWD), the country’s first public water utility, is seeking a 68-percent increase in its tariff to help fund its investment requirements.

Based on its petition with the Local Water Utilities Administration (LWUA), COWD plans to increase the water tariff in two tranches; first, from the current P21.84 per cubic meter to P30.58, then to P36.70.

According to Engr. Edna Najeal, COWD general manager, the last time the water utility adjusted its rate was in 2011, or some 15 years ago.

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Power and fuel rates, as well as costs of materials and supplies, have gone up since then, she noted.

COWD wrapped up its public information drive last week to explain to consumers the reason for the planned rate hike.

The water utility needs P9.3 billion in the next 10 years to expand its service pipelines to meet the needs of the fast-growing city and rehabilitate old ones.

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Organized in 1973, it took over the system with some 3,500 service connections run by the City Waterworks System. Today, it serves 108,277 connections in 64 of the city’s 80 barangays, delivering 204,361 cubic meters of water every day through 626 kilometers of pipelines.

Daily, COWD produces at least 118,000 cubic meters of water through its 32 wells and one spring source, and buys at least 85,000 cubic meters from a bulk supplier that processes run-of-river water.

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COWD’s development program seeks to resolve age-old issues of low-pressure to no water, leakages, turbid water, and poor customer service.

As of the end of 2025, the water utility recorded 49 percent non-revenue water, the bulk of which is due to pipe leaks. This is down from 56 percent in 2017.

COWD targets marked improvements in its service delivery capacity in 13 densely populated urban villages in the city where water flows from faucets for only 10 to 15 hours every day.

If LWUA grants the petition and the rate increase is implemented by the fourth quarter of this year, COWD assistant general manager Vanessa Chiu said the water utility will incur a financial shortfall of some P235 million by the end of 2026.

But this will hopefully be addressed when the second tranche of the rate adjustment comes on stream starting next year.

Chiu said that apart from the hike in water tariffs, COWD is also seeking funding support from government sources and loans to ensure that its development program can be effectively rolled out.

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Chiu explained that the proposed rate adjustment is compliant with Department of Budget and Management Memorandum Circular No. 2014-02, requiring local water districts to “ensure that rates are kept affordable for low-income groups.”

The circular states that the amount of water rate for 10 cubic meters must not exceed 5 percent of the average income of residents in the service area.

The COWD official cited Wage Order No. RX-24 of the Regional Tripartite Wages and Productivity Board that took effect on May 1 this year, setting the daily minimum wage of private sector workers at P500 per day or about P11,000 a month. This means the maximum water rate that a minimum wage earner can absorb is P550.

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For households in the basic consumption bracket of 10 cubic meters, the monthly bill would be P305.80 when the first tranche of increase is imposed, and P367 when the second tranche is implemented./coa