THE revised rehabilitation plan of the Lopez-owned Maynilad Water Services Inc. goes against public policy because it absolves the water utility from posting a bond which secures the performance of its obligations.
This is one of the three reasons why the nongovernment organization Action for Economic Reform (AER) filed a petition Friday asking the Quezon City Regional Trial Court to dismiss Maynilad's petition for rehabilitation. The court will rule on AER's petition Monday. The same court is expected to rule on Maynilad's rehabilitation petition in early October.
In its petition the AER said that Maynilad's petition for rehabilitation should "not be given due course by the court" because it is "contrary to public policy, since it absolves petitioner from the duty of posting a bond in order to secure the performance of its obligations."
In a Friday afternoon press conference in Quezon City, just hours before the petition was filed, lawyer Nepomuceno Malaluan of the AER said that if Maynilad's rehabilitation plan is approved by the court, "payment for the premium for the performance bond disappears in the financial plan."
The same petition also said that the court has no jurisdiction to approve the rates that Maynilad seeks to implement in its rehabilitation plan. According to the petition, jurisdiction to approve water rates is "vested with the regulatory office and the MWSS, after due notice and hearing."
The Times earlier reported that if Maynilad's rehab plan is approved, it will increase water rates by 35.4 percent.
The same AER petition also said that Maynilad's rehabilitation plan "does not include a liquidation analysis in the manner required by the Interim Rules."
THE Bangko Sentral ng Pilipinas said that the country's credit rating could be downgraded yet again if Congress will not pass any of the administration's priority tax measures this year.
"If nothing happens this year [in the passage of any of the tax measures], we could be courting a downgrade," Cora Guidote, executive director of the central bank's Investment Relations Office, told reporters.
Philippine debt instruments have been rated as below investment grade. Earlier, Moody's Investors Service has downgraded its outlook from stable to negative for the country's sovereign rating with "Ba 2" noninvestment rating.
Fitch Ratings and Standard and Poor's have not changed their sovereign rating outlook for the country at "BB" stable.
The downgrade may make it more expensive for the government to borrow locally at a time when the Arroyo administration is faced not only with a P197.8-billion budget deficit but with some P500 billion in debts incurred by the National Power Corp. (Napocor).
Recently, S&P has downgraded the Philippines' long-term local currency rating, which reduced the rating from "BBB" to "BBB minus," citing potential risks of a large government debt coupled with a shallow domestic capital market.
The improvement in the sovereign rating, which is a benchmark rating for the country and all of its constituents, will lower the government's costs of borrowings, improve the investors' sentiment, the benchmark for corporate issues, balance of payments and gross international reserves.
The tax measures already endorsed by Malacañang to Congress are: increasing to P2 the specific tax on petroleum products, increasing the value-added tax to 12 percent and later to 14 percent, indexing sin taxes, rationalizing government fees and charges, taxing the windfall telecommunications profits, shifting to the gross-income tax system, granting a general tax amnesty and the Lateral Attrition Law.
Approval of at least two of the priority tax measures, particularly the indexation of sin taxes, would create a significant impact on the government's efforts to avert a fiscal crisis and bolster investors' confidence.
In a related matter, the finance chief expressed her opposition to a proposal to stop automatic annual budget allocation for debt servicing.
Amatong said the financial position of the government will further worsen if the proposal to remove the automatic annual budget allocation for debt servicing will be carried out.
This is one of the three reasons why the nongovernment organization Action for Economic Reform (AER) filed a petition Friday asking the Quezon City Regional Trial Court to dismiss Maynilad's petition for rehabilitation. The court will rule on AER's petition Monday. The same court is expected to rule on Maynilad's rehabilitation petition in early October.
In its petition the AER said that Maynilad's petition for rehabilitation should "not be given due course by the court" because it is "contrary to public policy, since it absolves petitioner from the duty of posting a bond in order to secure the performance of its obligations."
In a Friday afternoon press conference in Quezon City, just hours before the petition was filed, lawyer Nepomuceno Malaluan of the AER said that if Maynilad's rehabilitation plan is approved by the court, "payment for the premium for the performance bond disappears in the financial plan."
The same petition also said that the court has no jurisdiction to approve the rates that Maynilad seeks to implement in its rehabilitation plan. According to the petition, jurisdiction to approve water rates is "vested with the regulatory office and the MWSS, after due notice and hearing."
The Times earlier reported that if Maynilad's rehab plan is approved, it will increase water rates by 35.4 percent.
The same AER petition also said that Maynilad's rehabilitation plan "does not include a liquidation analysis in the manner required by the Interim Rules."
THE Bangko Sentral ng Pilipinas said that the country's credit rating could be downgraded yet again if Congress will not pass any of the administration's priority tax measures this year.
"If nothing happens this year [in the passage of any of the tax measures], we could be courting a downgrade," Cora Guidote, executive director of the central bank's Investment Relations Office, told reporters.
Philippine debt instruments have been rated as below investment grade. Earlier, Moody's Investors Service has downgraded its outlook from stable to negative for the country's sovereign rating with "Ba 2" noninvestment rating.
Fitch Ratings and Standard and Poor's have not changed their sovereign rating outlook for the country at "BB" stable.
The downgrade may make it more expensive for the government to borrow locally at a time when the Arroyo administration is faced not only with a P197.8-billion budget deficit but with some P500 billion in debts incurred by the National Power Corp. (Napocor).
Recently, S&P has downgraded the Philippines' long-term local currency rating, which reduced the rating from "BBB" to "BBB minus," citing potential risks of a large government debt coupled with a shallow domestic capital market.
The improvement in the sovereign rating, which is a benchmark rating for the country and all of its constituents, will lower the government's costs of borrowings, improve the investors' sentiment, the benchmark for corporate issues, balance of payments and gross international reserves.
The tax measures already endorsed by Malacañang to Congress are: increasing to P2 the specific tax on petroleum products, increasing the value-added tax to 12 percent and later to 14 percent, indexing sin taxes, rationalizing government fees and charges, taxing the windfall telecommunications profits, shifting to the gross-income tax system, granting a general tax amnesty and the Lateral Attrition Law.
Approval of at least two of the priority tax measures, particularly the indexation of sin taxes, would create a significant impact on the government's efforts to avert a fiscal crisis and bolster investors' confidence.
In a related matter, the finance chief expressed her opposition to a proposal to stop automatic annual budget allocation for debt servicing.
Amatong said the financial position of the government will further worsen if the proposal to remove the automatic annual budget allocation for debt servicing will be carried out.
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