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MANILA, Philippines - The Office of the Government Corporate Counsel (OGCC) has admitted that consumers will eventually have to pay for arbitration costs including lawyers' fees and litigation expenses in case the concessionaires do not agree with new position of the regulatory office that income taxes are not supposed to be passed on to consumers.
Government Corporate Counsel Raoul Creencia said it is clear from the concession agreement that all expenses related to arbitration will also be passed on to consumers.
From the letters that Maynilad and Manila Water have submitted, they are opposing the position of the regulatory office.
Creencia said his office continues to hope that the concessionaires will see the light in their decision and realize that it is indeed unfair and unjust to pass on income taxes to consumers.
As an example, Creencia said if income taxes that will be paid by both concessionaires amount to $100 million when the new ruling is implemented, the cost of arbitration will be around 5 to 8% of that amount or around $5 to $8 million that will have to be shouldered by the consumers.
Creencia said the government can also move to amend certain provisions of the agreement but it will be difficult to strike down the whole agreement all together.
But Creencia welcomed the move of militant groups in asking the Supreme Court to declare the contract null and void.
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