VERA FILES FACT CHECK: Duterte falsely claims LP gave water concession to Ayalas

Read this fact check in Filipino

During the oath-taking ceremony of new members of the Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban) on Oct. 16, 2021, President Rodrigo Duterte accused the opposition Liberal Party (LP) for giving the Ayalas, a prominent business family in the country, a water distribution contract. His claim is false.

STATEMENT

Duterte said his party supports poor and middle-class Filipinos, but is still open to the “enlightened rich people.”

He said the PDP-Laban is not like other parties that receive funding from the “oligarchs,” adding:

Katong mga dato, mga Liberal niadto, mga… You know, the big --- kamo nahibaw mo’g kinsa --- they were funded by the oligarchs. So tan-awa og unsa’y nahitabo. Ang tubig gihatag sa Ayala…”

(The rich people, the Liberal went there, the… You know, the big --- you know who they are --- they were funded by the oligarchs. Now look at what happened. They gave the water to the Ayala….)

The president further said:

Mao na abusado kaayo ang ABS-CBN. Wala’y bayad-bayad og taxes unya mao pa’y isog. And they continue really to utilize and ‘yung ano... ‘yung mga partido hantod karon. Mao lang ni siya gihapon.”

(That is why ABS-CBN is so abusive. They don’t pay taxes, yet they are the ones who are aggressive. And they continue to really utilize the... the political parties even until today. It’s still the same.)

Source: RTVMalacanang, PDP-Laban Oath-Taking of New Members and Proclamation of Local Candidates (Speech) 10/16/2021, Oct. 16, 2021, watch from 10:33 to 11:19 (transcript)
FACT

Contrary to Duterte’s claim, the government entered into a concession agreement with the Ayala-led Manila Water in 1997 under the administration of President Fidel V. Ramos, a member of the then-ruling party LAKAS-National Union of Christian Democrats-United Muslim Democrats of the Philippines (Lakas-NUCD-UMDP).

In 1996, Ramos signed Executive Order No. 311, encouraging the private sector to participate in managing all or segments of water distribution facilities of the Manila Water Sewerage system (MWSS), which lacked the capability to address the water crisis in Metro Manila.

A year later, the government, through the MWSS, gave exclusive water distribution contracts to Manila Water and Maynilad (at the time partly owned by Benpres Holdings Corp., the former name of Lopez Holdings Corp.), to service residents in Metro Manila, Rizal, and Cavite.

In 2009, the MWSS, under the term of then-President Gloria Macapagal-Arroyo, a political ally of Duterte, extended the 25-year concession agreements with the companies for another 15 years, from 2022 to 2037. Duterte, however, ordered the cancellation of the contract extension due to alleged “onerous” provisions in 2019.

But the MWSS later affirmed in April and May 2021 the contract extensions of both companies up to 2037 after a government-led panel reviewed and “eliminated” the “onerous” provisions, such as making consumers shoulder corporate income taxes.

In the same Oct. 16 event, the president falsely claimed that media network ABS-CBN, which is among the subsidiary companies of Lopez Holdings, does not pay its tax dues. Bureau of Internal Revenue (BIR) officials have repeatedly cleared the network of tax deficiencies in congressional hearings on its franchise renewal application in 2020. (See VERA FILES FACT CHECK: Duterte makes false claim on ABS-CBN's tax 'violation’)

In July last year, BIR Assistant Commissioner Manuel Mapoy told the House Committee on Legislative Franchise that the media giant paid at least P15 billion in taxes from 2016 to 2019. (See VERA FILES FACT SHEET: What’s next for ABS-CBN after losing franchise bid?)

The BIR has yet to reply to the query of VERA Files Fact Check on whether ABS-CBN had tax deficiencies for fiscal year 2020.


Editor's note: This page has been updated to correct the name of the ruling party. An earlier version of this article reflected the incorrect "Partido Demokratiko ng Pilipinas - Lakas ng Bayan" instead of "Partido Demokratiko Pilipino - Lakas ng Bayan".


Sources

RTVMalacanang, PDP-Laban Oath-Taking of New Members and Proclamation of Local Candidates (Speech) 10/16/2021, Oct. 16, 2021 (transcript)

Manila Water, Our Story, Accessed Oct. 20, 2021

Manila Water Sewerage System, Our History, Accessed Oct. 20, 2021

Malacañan Museum, Fidel V. Ramos, Accessed Oct. 20, 2021

Official Gazette, Executive Order No. 311, s. 1996

Manila Water, Press Statement on the Award Recently Issued by an Arbitral Tribunal in favor of Manila Water as Administered by the Permanent Court of Arbitration, Dec. 4, 2019

Manila Water, Concession Agreement, 1997

Maynilad, Concession Agreement, 1997

Philippine Stock Exchange, Company Information of Lopez Holdings Corporation, Accessed Oct. 20, 2021

Maynilad, Our Company, Accessed Oct. 20, 2021

Manila Water, Manila Water Term Extension Agreement with Annexes, Oct. 23, 2009

GMA News Online, Duterte’s order led MWSS to cancel Maynilad, Manila Water contract extension —DOJ chief, Dec. 11, 12019

Rappler.com, MWSS cancels Manila Water, Maynilad concession agreement extension, Dec. 11, 2019

Inquirer.net, MWSS revokes extension of Maynilad, Manila Water concession deals, Dec. 11, 2019

Manila Water Sewerage System, NEW CONCESSION AGREEMENT BENEFICIAL TO ALL, April 6, 2021

Manila Water Sewerage System, NEW CONCESSION AGREEMENT WITH MAYNILAD PUTS WATER SECURITY PROJECTS ON TRACK, May 19, 2021


(Guided by the code of principles of the International Fact-Checking Network at Poynter, VERA Files tracks the false claims, flip-flops, misleading statements of public officials and figures, and debunks them with factual evidence. Find out more about this initiative and our methodology.)

Have you seen any dubious claims, photos, memes, or online posts that you want us to verify? Send us a message here or here.

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