THE government’s cancellation of the extension of its water contracts with two concessionaires may negatively affect investor confidence in the Philippines, a Fitch Group unit has warned.

In a report released on Monday, Fitch Solutions said the Metropolitan Waterworks and Sewerage System’s recent revocation of concession extension agreements with Manila Water Co. Inc. and Maynilad Water Services Inc. “exemplifies the high regulatory risk which contracts between the government and private organizations are subjected to.”