Yet, Maynilad Water Services’ IPO prospectus includes a warning that sounds less like standard financial caution, and reads more like a political brief on the consequences of operating in a country where politics and business are deeply intertwined.
The heroes or villains—depending on where your political loyalties lie—are two of the country’s most powerful political families, led by President Ferdinand Marcos Jr. and Vice President Sara Duterte.
Their deepening feud takes center stage in a key section of the filing discussing Philippine risks. It includes an unusually detailed and blunt recounting of recent events, in a document that traditionally discusses politics in broad, if not cautious, terms.
Deal breaker for investors?
Maynilad is betting that investors will see potential gains outweighing the risks. After all, the IPO offers a strong growth narrative and promises an attractive dividend of at least 50 percent of the previous year’s profit.
Its operations are closely linked to the national economy. It serves about 10 million customers, making it the largest water concessionaire in both the Philippines and Southeast Asia operating within a single service area.
The art of avoiding lawsuits
IPOs come with risk disclosures, and the bankers, financial advisers, and lawyers behind these deals do their best to outline factors that could affect the company and investors’ money.
“The banks made an assessment that the political risks are particularly elevated for this kind of business, and given recent history,” an industry expert, who reviewed the Maynilad IPO prospectus, told InsiderPH.
“Thus, a very detailed disclosure, discussion,” the expert added
It’s not just about keeping investors informed, but also serves as a safeguard against future legal repercussions.
“It’s CYA [cover your ass] for banks,” the expert said.
High-profile rift raises political, and economic risks
Maynilad’s IPO prospectus detailed public disagreements between the President and Vice President, which led to her resignation as Education Secretary in June last year.
The Vice President also claimed that her life has been threatened and has pointed to the current administration as the source of the threat, according to the document.
“There can be no assurance that election-related acts or political violence will not occur in the future, and any such event could negatively impact the Philippine economy,” Maynilad stated.
Businesses, especially highly regulated ones like Maynilad, thrive in stable environments. It’s also hard to plan future investments when the outlook is clouded by political uncertainty.
“Such political or regulatory changes may include (but are not limited to) the introduction of new laws and regulations that could impact our business,” Maynilad said.
ABS-CBN franchise loss brought up
“For example, in July 2020, a majority of a committee of the Philippine Congress rejected the request for a 25-year extension of the franchise of one of the Philippines’ largest broadcasters,” Maynilad said.
It was referring to the Lopez family’s ABS-CBN, the country’s dominant TV broadcaster, which was shut down after Duterte’s allies in Congress killed its franchise renewal, a move widely criticized as politically motivated.
Are these risk warnings extreme?
Maynilad doesn’t seem to think so. The company faced direct pressure during the Duterte administration, culminated in the rewriting of its decades-old concession contract alongside that of Manila Water Co.
“[I]n January 2020, then Philippine President Rodrigo R. Duterte ordered the review of the original concession agreement on the ground that it allegedly contained onerous provisions that were unfavorable to the government and the consuming public,” Maynilad said in another segment of the prospectus.
Tough lesson
The lesson it learned from the Duterte years? Change can happen on a whim, even after a contract has been signed. It maintains this view in the IPO document.
“The franchise and the revised concession agreement may be exposed to political and reputational risks, and we are subject to government inquiries and similar actions from time to time,” it said.
After the revised agreement was signed, Maynilad’s shareholders, including Manuel V. Pangilinan-led Metro Pacific Investments Corp. and the Consunji family’s DMCI Holdings, maintained control of the company.
Manila Water Co., the capital’s other major water provider, took a different route. The Ayala Group ceded control, selling the utility to tycoon Enrique Razon Jr.
What’s next?
The recent arrest of former President Duterte and his transfer to The Hague—where he faces accusations of crimes against humanity—has only raised the stakes.
"On March 13, 2025, former President Rodrigo Duterte and his entourage arrived at The Hague, where he will face charges over the deadly anti-drug crackdowns he oversaw while in office," the Maynilad filing showed.
“These complaints and developments may increase political tensions in the Philippines. These or other developments could increase the friction between the Dutertes and the current administration,” Maynilad warned.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
