TEMPORARY FIX. File photo of a 'tawid-uhaw' or a temporary PrimeWater tank in San Jose del Monte, Bulacan, which the company resorts to whenever there's no waterTEMPORARY FIX. File photo of a 'tawid-uhaw' or a temporary PrimeWater tank in San Jose del Monte, Bulacan, which the company resorts to whenever there's no water

[Vantage Point] PrimeWater’s sellout: A ghost buyer and a broken utility

2025/12/20 08:00

What stands out immediately in the PrimeWater-Crystal Bridges transaction is not what is disclosed, but what is conspicuously absent. In Philippine capital-market practice, silence can be as revealing as disclosure — and here the buyer’s lack of submitted financial statements to the Securities and Exchange Commission (SEC) is itself a material signal that deserves scrutiny.

From a governance and market-integrity perspective, Crystal Bridges’ failure to file any financial statements raises a clear red flag, even if it is technically defensible under a narrow reading of SEC rules. While privately held investment vehicles are not always required to publish audited financials in the same way as publicly listed firms, the moment such an entity acquires control of a regulated infrastructure operator with nationwide concessions, the disclosure bar rises — not legally by default, but practically, reputationally, and regulatorily.

Water utilities are quasi-public assets. They sit at the intersection of consumer welfare, long-dated concession contracts, and systemic credit exposure. A buyer stepping into that role without any publicly verifiable financial trail forces regulators, lenders, and consumers to take solvency, funding capacity, and related-party risk largely on trust.

The Villar family’s decision to walk away from PrimeWater is being framed as fatigue — too many complaints, too much politics, too little reward. But viewed through the full record, the exit looks less like exhaustion and more like a calculated retreat from a business that became impossible to defend in public, regulatory, and electoral terms. (READ: Voters in hardest-hit PrimeWater service areas decisively reject Camille Villar)

PrimeWater did not implode financially. It imploded reputationally.

By the time former senator Cynthia Villar told reporters on July 31 that PrimeWater had turned out to be a “bad investment” that “doesn’t earn much” and had become “just being used against us in politics,” the damage had already been done. 

An estimated six million customers were affected, many of whom were paying on time while experiencing dry taps. READ: [Vantage Point] Taps go dry with expensive, inefficient PrimeWater service

A Rappler team had solidly documented that water shortages in San Jose del Monte and other areas were not works of fiction. Also, a Thomson Reuters Foundation report published in August 2023 via Reuters documented residents describing “murky” or unusable water alongside higher bills, plus complaints that fell “on deaf ears,” and it noted Commission on Audit (COA) scrutiny of several PrimeWater-related partnerships.

The situation had turned into a ‘daylight nightmare,’ if there is such a word, that became a major campaign-stage issue. President Ferdinand “Bongbong” Marcos Jr. had publicly acknowledged the complaints. The Local Water Utilities Administration (LWUA) had assembled volumes of documentation and openly cited lack of investment as the root cause. (READ: [Local Vote] In vote-rich Calabarzon, PrimeWater makes a killing)

In utilities, that is the point of no return.

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Making money out of bad service

More telling is that PrimeWater’s financial record contradicts the narrative of a money-losing venture, as the Villar family matriarch claimed. Its profits climbed steadily, breaching ₱1 billion as early as 2022. According to its latest financial statement obtained by Vantage Point, the company’s profits rose further by 2024. 

PrimeWater’s 2024 audited financial statements, signed off by Punongbayan & Araullo with an unqualified opinion, show a company that is capital-intensive but operationally cash-generative. Total assets rose to ₱42.37 billion, liabilities to ₱26.04 billion, and net income to ₱1.35 billion. 

More importantly, operating cash flows reached ₱6.08 billion, broadly matching the scale of reinvestment needs, with ₱5.85 billion plowed back into infrastructure. This is not cosmetic profitability; it is a utility throwing off real cash, albeit one that must constantly reinvest just to stand still.

Yet the PrimeWater statements also reveal why the identity and balance-sheet strength of the buyer matter so much. Service concession assets account for ₱26.1 billion of carrying value — by far the dominant asset class. 

These are long-dated, amortized over 25 years, and economically viable only if financing remains stable, lenders stay supportive, and regulators retain confidence in the operator’s backers. Any question regarding the ultimate owner’s financial depth becomes a question about the sustainability of the concessions themselves.

The accounting policy shift in 2024 — from the revaluation model to the cost model for property and equipment — adds another layer to this story. The retrospective restatement wiped ₱1.3 billion off assets, increased liabilities by ₱321 million, and cut equity by ₱905 million as of 2023. 

While this move arguably improves conservatism and comparability, it also underscores how sensitive PrimeWater’s balance sheet is to accounting judgments. In such a context, the financial capacity of the controlling shareholder is not a footnote; it is a risk mitigant. 

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Keeping the public in the dark

If the public will be kept in the dark about Crystal Bridges’ financials, consumers, investors, and regulators alike cannot assess whether the parent company can absorb shocks, inject equity, or refinance debt if assumptions proved optimistic.

There are also softer but no less important signals embedded in PrimeWater’s numbers. Advances from related parties remain at ₱3.58 billion, and management fees of ₱350 million continue to flow within the group. 

Accrued expenses nearly doubled year-on-year. Fully depreciated assets worth ₱947 million are still in use — normal for utilities, but a reminder of capital-replacement risk. These are manageable issues under a transparent, well-capitalized ownership structure. They become more concerning when the new owner’s own financial standing is effectively a black box.

Enter Crystal Bridges — and the discomfort deepens.

The buyer’s financial silence is not illegal, but it is destabilizing. A holding company acquiring a nationwide water portfolio without publicly filed financial statements asks customers, regulators, and markets to accept a leap of faith precisely when trust is already depleted. This is the worst possible sequencing for a utility transition: service failure first, ownership opacity second.

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[Vantage Point] Lucio Co’s PrimeWater bet: The price of trust

Lucio Co’s baggage

And then there is the baggage — unavoidable, contextual, and impossible to ignore.

Lucio Co’s public record is not one of conviction, but it is one of persistent allegation. For more than two decades, across multiple administrations, his name has surfaced in smuggling and tax-related controversies. 

Former Philippine National Police (PNP) chief and now Senator Panfilo Lacson had spoken openly — if carefully — about long-standing suspicions, always underscoring the same refrain: no arrest without evidence, no warrant without a paper trail. Senate hearings, customs intelligence lists, and media reports repeatedly cited Co, even as cases stalled or collapsed for lack of proof. Courts ultimately ruled in his favor in major tax disputes. No criminal conviction stands as of 2025.

That history matters not because it proves wrongdoing — it does not — but because it illustrates a pattern that regulators and markets understand all too well: businesses that operate in gray zones of perception accumulate risk even when they clear legal hurdles. Repeated allegations, even unresolved ones, raise the bar for transparency. They do not lower it.

Which is why Crystal Bridges’ invisibility is such a poor fit for a water utility acquisition.

PrimeWater is not a supermarket chain or a real-estate holding company. It is a monopoly service provider whose legitimacy rests on three pillars only: service delivery, investment discipline, and trust. The Villar family lost the first two in the public eye. The new owner has yet to establish the third.

Put bluntly, this is not about whether Lucio Co is guilty of anything. It is about whether a sector — already bruised by underinvestment and political fallout — can afford an owner whose financial capacity is not publicly verifiable. When millions of households are paying for water that does not reliably arrive, the market does not care about legal technicalities. It cares about accountability.

The deeper lesson from PrimeWater is not that privatization has failed. It is that privatization without sustained capital, transparency, and consumer-centric enforcement inevitably collapses under its own contradictions. Utilities cannot be run like political side-businesses or balance-sheet conveniences. They demand patience, visibility, and a tolerance for scrutiny that many conglomerates underestimate.

If the Villar family exited because PrimeWater became a liability rather than an asset, the question now shifts to Crystal Bridges: will it confront that liability head-on or merely inherit it quietly?

PrimeWater’s rising revenues amid documented service complaints are not, by themselves, a smoking gun. But in a public-utility context, the combination of (1) growing collections, (2) allegations of chronic service failures and ignored complaints, and (3) a change of control into an ownership vehicle whose financials are not publicly visible is enough to justify the sharpest, most pro-consumer regulatory posture. (READ: PrimeWater allegedly not paying contractors, water districts: ‘Dami ’nyong nabudol’)

The deal may be legal. The deal may even be strategically sound. But until tap water flows reliably and clearly — and until the new owner stops operating like a ghost — the market should treat the transaction for what it currently looks like to the paying public: a transfer of billing rights, and not a restoration of service. – Rappler.com

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[Vantage Point] The Villar empire: From untouchable to a governance test case

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