Water Environment Partnership in Asia

Policy Brief

SeriesMarch 2014

PRIVATISATION OF SANITATION
AND SEWERAGE SERVICES LESSONS LEARNT FROM THE
PHILIPPINES
1. Introduction
Effective management of domestic wastewaterand septage is an urgent need for mostdeveloping countries, especially those in Asia,
because of its huge impacts on economic
growth, public health and the environment. A
recent study by the World Bank on economic
impacts of sanitation in four Southeast Asian
countries, namely Cambodia, Indonesia,
Philippines and Vietnam, estimated that thesecountries lose an estimated 9 billion USD
annually (based on 2005 prices). A total ofmore than 400 million people in these four
countries suffer poor sanitation and hygiene
conditions, leading to at least 180 million
disease episodes and 100,000 premature
deaths annually. In the case of Philippines, thestudy estimated that poor sanitation has led
to economic costs in the order of 1.4 billion
USD or 77.8 billion PhP per year, equivalent
to about 1.5% of its Gross Domestic Product(GDP) for 2005. The health impacts were
estimated at 1 billion USD, which indicatedthe largest source of quantified economic
costs and accounts for about 72% of total
economic cost. The second most importanteconomic impact was on water resources,
which represented about 23% of total costs(Hutton et al., 2008). The latest data on
sanitation coverage from the WHO/UNICEF
Joint Monitoring Programme in 2013 indicatedthat about 74% of the Philippine population
had access to improved sanitation in 2011,about 17 percentage points higher than thevalue in 1990 and slightly above the averagefor Southeast Asia (WHO & UNICEF, 2013).
But it also suggests that nearly 25 million
people in Philippines still have no accessto improved sanitation facilities. With thesefigures, sanitation targets for Philippine MDGs
are expected to be fulfilled by 2015. However,
the task of providing sustainable sanitation
services should not solely mean increasing
the proportion of the population using
improved toilet facilities to meet sanitation

1

targets of MDGs set by each country – otherfactors need to be considered, including
the quality or the performance of thesewastewater treatment facilities as well as
consequences of the effluent in order toprotect the environment and the country’s
water resources as a whole.
Since 1997, the national government has
commissioned two private water utilities,n a m e l y M a n i l a Wa t e r C o m p a n y, I n c .
(MWCI) and Maynilad Water Services, Inc.
(MWSI) to provide their sanitation services
such as scheduled septic tank desludging,developing interceptor collection andwastewater treatment systems and building
sewer networks in both Metro Manila andother fringe areas. Because of the strategicplanning and programming efforts of these
two water concessionaires in accordance withthe concession agreement with the Philippine
government and with the assistance ofinternational donor agencies, many goodpractices for both sewerage and septage
management, such as the decentralised
sewerage management approach andprivatisation of sewerage services, havesuccessfully been implemented in thiscountry.
This policy brief re-examines the challenges
and constraints facing the Philippines, mostly
in the Metro Manila region, in domestic
wastewater and septage management,
including expansion of the sewerage network
and wastewater treatment ratio. This brief
also provides good lessons learnt for water
professionals and policymakers in thewater supply and sanitation sector – notonly in other cities and municipalities of thePhilippines but also in other Southeast Asian
countries – on how decentralised approaches
as well as privatisation policy have greatly
assisted in improved wastewater andseptage management in the Philippines.

42. Country profile and current situationof domestic wastewater management in
the Philippines
The Philippines is an archipelago of
7,107 islands with a total land area ofapproximately 300,000 km2 (Fig. 1). Its
capital city is Manila. The total populationof the Philippines was about 95 million in
2011, and is expected to reach 100 million
by the end of 2014. An estimated 49% ormore than 46 million people are now living
in urban areas (WHO & UNICEF, 2013).
The Philippines is divided into three majorisland groups, namely Luzon, Visayas, andMindanao. As of March 2013 these islandgroups were further divided into 17 regions,
80 provinces, 140 cities, 1,494 municipalities
and 42,026 barangays (National Statistical
Coordination Board, 2013). The greatest
concentration of population is in the Metro
Manila or National Capital Region, which isalso the smallest region of the Philippines interms of land area, at about 638 km2. Metro
Manila is composed of one municipality and16 cities, with a total population of nearly
11.9 million as of May 2010, and a population
density estimated at over 18,000 persons per
km2 (National Statistical Coordination Board,2013).
A review of the Philippine sanitation andsewerage sub-sector to date reveals that
the Philippines has paid little attention to
sewage collection and treatment. Most
efforts and public investments in the sector
have focused on construction of water supply
facilities, which has consumed nearly 97%of the available funding, with only 3% spent
on sanitation (Ancheta, 2000). Most of theinvestments in sanitation come from theprivate sector such as households or ownersof buildings in the form of on-site sanitation
facilities.

Figure 10Administrative map of the Philippines

2

200km

According to the Philippines Environment
Monitor 2006 report, it is estimated that
95% of wastewater flowing from households
directly or via septic tanks is transported
into groundwater, public canals or drainage
systems, eventually entering rivers or otherwater bodies, especially in areas with nosewer systems. As a result, it is reported
that up to 58% of the country’s groundwater
intended for drinking is microbiologicallycontaminated with coliform. Major water
bodies in Metro Manila have been heavily
contaminated with organic matter, making
them unsuitable for marine life. It isestimated that 2.2 million metric tonnes oforganic pollution is produced annually bydomestic (48%), agricultural (37%), andindustrial (15%) sectors. Moreover, untreatedwastewater causes adverse health effects
on people nearby, renders water sources
unsuitable for drinking and other purposesand significantly degrades overall quality oflife (World Bank, 2003).
In both urban and rural areas, flush and pourflush toilets discharging to septic tanks are
the most common practice with 66.9% ofhouseholds in urban areas and 40% in rural
areas (World Bank, 2007). It is estimated thatabout 85% of the Metro Manila population
makes use of septic tanks (AECOM etal., 2010). Unfortunately, many of these

3. Privatisation of sanitation andsewerage services
As part of efforts to improve the water supply
and sanitation sector of the Philippines, theMetropolitan Waterworks and Sewerage
System (MWSS), a government entity
established in the early 1970s has beentasked to provide sanitation and sewerage
services in the country. This showed the endof the central government’s full control ofwater supply and sanitation services in thePhilippines.
Meanwhile, management of provincial andmunicipal water and sewerage systems in
the remaining cities and municipalities is the
responsibility of local governments.

33

septic tanks are poorly designed andconstructed and have open bottoms. The
World Bank (2007) reported that less than
1% of septic tanks in Philippines undergo
regular desludging with sludge undergoing
acceptable treatment and disposal.
According to DILG & DOH (2011), only
seven cities had sewerage systems, andthese only covered a small percentage of
their population ranging from 1–15%. Other
cities and areas still rely on septic tanks
or pit latrines or practice open defecation.
The World Bank (2003) has calculated thatabout 7.2 million cubic meters (MCM) per
day of domestic wastewater is generated
in the Philippines, about 5.2 MCM per
day of which is generated in urban areas.
Unfortunately, less than 10% of sewage
collected from sewerage systems is treatedin sewage treatment plants or communal
septic tanks. Such systems are mostly foundin Metro Manila, Baguio and Vigan City.
Further, about 64% of the rivers havea Biochemical Oxygen Demand (BOD)
exceeding the public water supply criterion(Class A), which is 5 mg/l. In terms of total
volume, the amount of BOD load discharged
to the water bodies of Metro Manila has
been estimated at 330,000 tonnes per year,
comprised of 192,000 tonnes of domestic
and 138,000 tonnes of industrial wastewater(World Bank, 2003).

Over the last 30 years, owing to rapid
urbanisation, industrialisation and population
growth, Metro Manila has experienced
deterioration of existing infrastructure and ahigh demand for both water supply, sewerageand sanitation services. Consequently,
MWSS took an important positive step insigning 25-year concession contracts in 1997
with two private water utilities for providing
water supply and sanitation services toMetro Manila, and received a 15-year term
extension granted about 10 years thereafter.
The decision of privatisation was aimed atreforming MWSS operations and facilities,
transferring the financial burden to the private
sector and improving service standards andoperational efficiency, as well as minimisingtariff impact. However, under the concessionagreement, MWSS plays dual roles as asset
owner and regulator.

Figure 2

Metropolitan Waterworks and Sewerage System (MWSS)

As of December 2010

Concession Agreement

Mayniland

Manila Water

WEST ZONE

EASTZONELand area (km2 )Service area
(cities/municipalities)
Total population (million)
Population served (million)% Water supply coverage% Sewerage coverage

ManilaMaynilad
Water(West zone)(East zone)
1,400
540
23
17
6.8
5.9
87%
23%

8.4
7.4
88%
8%

Source: Cleofas (2011)

Privatisation of sanitation and sewerage services in Metro Manila

The service area of MWSS was divided into
East and West Zones, and two separate
concession contracts were signed with
Manila Water Company, Inc. (MWCI) andMaynilad Water Services, Inc. (MWSI),
respectively (Fig. 2). According to theconcession agreement, these entities provide
sewerage and septage management to theircustomers in the Metro Manila Region andadjoining provinces, serving approximately
15 million people and an area of 1,940
km2. It is expected that by the end of theconcession period in 2037, each concession
area will be fully covered by a seweragesystem offering complete sewage treatment.
Outside of Metro Manila, a number ofLocal Government Units (LGUs) and Water
Districts (WD) are responsible for planning,
implementation and monitoring of sanitation
programmes through the provincial, city ormunicipal health offices. Further, there are anumber of private companies in major cities
providing septic tank desludging services.

With the passage of the Philippine Clean
Water Act of 2004, there are now three major
national government agencies having direct
involvement in sewerage management and indrafting policy for wastewater management:
the Department of Environment and Natural
Resources (DENR), the Department of
Health (DOH), and the Department of Public
Works and Highways (DPWH). DENR serves
as the lead agency in promulgating the rules
and regulations regarding water effluent
standards. Both DENR and DOH are theprimary regulators of the sanitation sector
and are responsible for carrying out reforms
in the sector. Meanwhile, DOH is primarily
responsible for creating and enforcing
standards for drinking water, septage andsludge disposal. DPWH is assigned toprepare a National Sewerage and Septage
Management Plan (NSSMP) (Fig. 3).

Figure 3
Department of Environment &Natural Resources (DENR)

REGULATORY OFFICE(MWSS)

Department of Health(DOH)

TARIFF, SERVICE STANDARDSCreating and Enforcing
Standards for Drinking Water,
Septage and Sludge Disposal

Pollution Control Standards
CONCESSIONAIRES

Manila Water & Maynilad

Regulatory framework for sanitation and sewerage managementin the Philippines

4Recently, the Philippines government has
initiated much-needed institutional reforms
in the water supply and sanitation sector
in an effort to accelerate the provision ofwater supply and sewerage services, in linewith its commitment under the Millennium
Development Goals (MDGs) and as
underscored in the Philippine Development
Plan (2011–2016). Under this initiative thegovernment prepared the Philippines Water
Supply Sector Roadmap in 2007 with theparticipation of diverse stakeholder groups
including both government and civil society.
At the same time, the Water and Sanitation
Programme (WSP) of the World Bank also
launched a project to help the DOH in
preparing a National Sustainable Sanitation
Plan for 2010–2016. About three years laterin 2010, the Philippine Sustainable Sanitation
Road Map was prepared and released by
the same technical working group led by the
DOH. This Roadmap is considered one of
the major milestones for the long-neglectedsanitation sector and is also expected toserve as a guide for the country to achieve
universal sanitation coverage.
In the last five years a greater emphasis
has been placed on sanitation, withstrong support received from international
development and donor agencies suchas the World Bank. With the extension of
the concession agreement by 15 years to2037 and in response to government calls
for accelerating the provision of sewerage
services, both Manila Water Company andMaynilad Water Services have agreed toprioritise aggressive sanitation and sewerage
programmes. Instead of proceeding withthe conventional approach of centralised
sewerage systems, which require hugeinvestments, cause significant construction
impacts, face difficulties in securing land
space and create consumer discontent, bothwater concessionaires decided to employ
different strategies. However, as mentioned
earlier, most households in Metro Manila
use septic tanks, thus both concessionaires
attempted to boost desludging operations intheir service areas.

In the case of MWCI, an innovative approach
was adopted. A new master plan wasdeveloped for the East Zone service areas
with over 6.2 million customers by 2012,according to the 2012 Manila Water Annual
Report. Initially the company first focusedon upgrading the common technology ofexisting communal septic tanks (CSTs) into
community-based, decentralised treatment
plants before eventually focusing on larger
combined sewer-drainage systems. Major
upgrades to the community-based treatment
plants have been completed, mostly
through World Bank-funded Manila Second
Sewerage Projects since 2002. A total of 28
package sewage treatment plants (STPs)
were constructed and operated along withthe rehabilitation of older facilities like theMakati South Sewage Treatment Plant.
For the rest of its coverage area, MWCI
has chosen to invest in desludging trucks
and enhancing septage treatment capacity,
both aimed at raising the removal efficiencyof septic tanks in areas that have yet tobe connected to sewer networks. MWCI’s
proactive approach to the challenge ofproviding sewerage and sanitation services
was effective as it resulted in significant
increases in the number of beneficiaries
served. Through an ongoing follow-up projectcalled Manila Third Sewerage Project,upgrades of existing communal septic tanks
to STPs have continued since 2005. Further,in order to accelerate sewerage services,
this approach was implemented with the new
combined sewer-drainage system (Fig. 4).
As of December 2012, it is estimated that
3.3 million residents in the eastern section of
Metro Manila had benefited from the Manila
Third Sewerage Project (2005–2012), which
had contributed to increased seweragecoverage from about 3% in 2003 to 30% in2012 for the same target beneficiaries. In
addition, an average additional 50,000 septic
tanks were de-sludged per year from 2008 to2012 for a total of 262,012 septic tanks in the
Manila Water Company, Inc. (MWCI) service
area (World Bank, 2013).

Figure 4

Upgrade of Communal
Septic Tanks (CSTs)

Septage
Management

Combined SewerDrainage System- Upgrade existing CSTs to- Septic tank desludging in 5‒7- For areas served by individual- Optimize connections to existing- Sludge is treated in septage- Use of drainage systemdecentralised STPs

separate sewer system

year cycles

treatment plants

septic tanks.

- Laying of interceptors

Key strategies for further acceleration of sewerage service expansion by MWCI
Source: Cleofas, 2013

55

Figure 5

LEGEND
Existing STP
STP Projects
Main Road
Manicipal Boundary
Water Bodies
Waste Water Coverage (2017)
Existing STP
Waste Water Projects
20122013 - 2017

Existing and planned STPs in the East Zone
Source: MWCI, 2014

As of 2013, MWCI had more than 300 kmof sewer lines, with 35 operating sewage
treatment plants (STPs) with treatment
capacity of around 135 MLD compared to
one treatment plant in 1997, with a maximum
capacity of 142.6 million litres per day (mld).
Treated wastewater is discharged into the
Pasig, Marikina, or San Juan rivers or into
Laguna Lake. Most of these plants utilise
the biological activated sludge process for
wastewater treatment. Construction of the 6
additional STPs, under the on-going projects,
by 2017 is expected to increase wastewatert r e a t m e n t c a p a c i t y s i g n i f i c a n t l y. T h ecompletion of these facilities will increase
wastewater treatment capacity to more than

6

493 mld, taking them a step closer to thegoal of increasing wastewater treatment
coverage from the current 23% to 100% by2037, compared to less than 3% in 1997
(MWCI, 2014).
For customers not connected to sewer
networks MWCI is now desludging septic
tanks with 92 vacuum truck units, compared
to one vacuum tanker in 1997, and treating
septage at two septage treatment plants,
namely FTI and San Mateo Septage
treatment plant, of 1.4 mld capacity. Septage
management is accomplished through thedesludging of septic tanks by vacuum tankers
in 5–7 year cycles.

These two septage treatment facilities are
the biggest in the region in terms of treatment
capacity. By 2011, a total of 1 million
households over the entire East Zone were
under septage management. It is estimatedthat more than 70% of households havebenefited from this desludging service.
On the other hand, Maynilad’s seweragesystem consists of more than 400 km ofsewer lines in five independent seweragesystems in Manila, Dagat-Dagatan, Quezon
City, Makati and Alabang, with a combined
treatment capacity of 469 mld serving
120,000 households. As with MWCI, most of
the wastewater treatment plants managed
by MWSI apply biological activated sludge
process-based technologies for wastewater
treatment, such as the sequencing batch

4. Challenges and best practices in theprovision of sewerage services in Metro
ManilaThe legal basis for sanitation and seweragemanagement in the Philippines is rooted
in several major laws and policies. The
National Building Code of the Philippines
and the National Plumbing Code provide
guidelines, criteria and standards for thedesign and construction of sanitation andsewerage facilities including septic tanks.
The Sanitation Code of 1975 provides forthe enforcement of various government
sanitation policies, including standards
for water supply, sewerage and sewage
treatment. Presidential Decree 1121, which
led to creation of the National Environmental
Protection Council, states that polluters
are responsible for containment, removal
and clean-up in certain pollution incidents.
Local Government Code defines thefunctions and powers of the LGUs as partof basic services devolution from national
government agencies to LGUs, including
those of water supply and sanitation services
to communities. The Philippine Clean Water
Ac t (p ro m u l g a te d recentl y) has paved
the way for the National Sewerage andSeptage Management Programme, which
will serve as the framework for promoting
viable, affordable, sustainable sewerageand septage management systems to be
implemented by LGUs, WD and other service
providers.

77reactor (SBR), moving bed biofilm reactor,
STM aerator and conventional activatedsludge (CAS).
Maynilad’s sanitation system is composed of
one septage treatment plant with 0.45 mld
capacity, 25 vacuum truck units and sevenmobile dewatering units serving 488,345
households.
Due to financial constraints before 2007,
MWSI was re-privatised in 2007. Since then
MWSI has been aggressively implementing
capital expenditure projects to boost thecompany’s water and wastewater services
in the West Zone. MWSI is now investing
in infrastructure in order to reach over ninemillion people within it concession area
(MWSI, 2010).

However, despite the presence of manylaws and policies concerning sanitation andsewerage management in the Philippines, alarge number of households have no accessto sanitary toilets and many towns and cities
have no facilities to treat and dispose of
sewage effectively.
Constraints at the local level that havesurfaced include low LGU awarenessand political will, inadequate information
dissemination and development of humanresources for sanitation programmes,
low multi-stakeholder involvement andinadequate financing schemes. These
problems resulted in the low prioritisationof sanitation and sewerage programmes.
Meanwhile, at the national level, themajor constraints identified were a weak,fragmented institutional framework andweak policies, inadequate information
dissemination, low multi-stakeholder
involvement and low investment in bothhuman resources and infrastructure forsanitation. For instance, according to DILG
& DOH (2011), the National Sector Plan for
Water Supply, Sewerage and Sanitation
failed to gain both national and local support
for implementation and revisions to the plan
despite the clear mandates of the institutions
involved.
In addition, as has been pointed out, anumber of challenges have faced bothconcessionaires since the start of theconcession agreement, which can besummarised into five major categories:(a) technical and financial challenges, (b)land availability, (c) pro-active stakeholder
involvement and endorsement, (d)coordination among governmental agencies
and (e) social acceptance and publicawareness.

a. Technical and financial challenges
Since 1997, after concession contracts
started to take effect, MWCI had only two
sewage treatment facilities. These were theMakati South STP, with a capacity of 40 mld
serving the Makati Central Business District
and surrounding residential communities,
and the package treatment plant locatedin Karangalan Village in Pasig City, which
had a capacity of only 0.1 mld. In addition,
there were a total of 34 CSTs in Quezon City
providing only primary treatment to 17,000
households. However, all facilities werein various states of disrepair and required
significant infrastructure improvements tomeet international standards. These facilities
served a total of only 40,000 households,
only 3% of the total East Zone population.
Aside from this minimal sewerage service,
the sanitation was inadequate as well –only one vacuum tanker was transferred
to MWCI and no facilities were available
for appropriate treatment and disposal of
septage.
Based on the previous sewerage masterplan of MWSS, MWCI opted for a centralised
sewerage system as a technical solution
to meet the original sewerage target.
However, construction required massive roadexcavations and a large area of land. Low
customer willingness to pay for improvements
to sewerage and sanitation services has

Figure 6also been cited in several studies (Campos,
2012; AECOM, Sandec and Eawag,2010). Unfortunately, the existing laws do
not provide sanctions for households notconnecting to sewers. As a result, MWCI put
forward a strategy that was both technicallyf e a s i b l e a n d a ff o r d a b l e t o c u s t o m e r s .
Initially, this strategy was anchored upon
decentralised sewerage systems and a
massive sanitation service programme. By
upgrading existing CSTs to STPs, population
coverage was maximised in terms of cost
efficiency and with minimal disruptions.
Further, an extensive sanitation programme
relying on the provision of regular septic tankmaintenance or desludging was implemented
to cater for non-sewered areas. To further
expand sewer service coverage, MWCI has
been piloting combined sewer-drainage
systems (Baffrey et al., 2012). These systems
utilise a collector pipe (“interceptor pipe”) tocollect wastewater from drainage and divert itto an STP for treatment prior to discharge torivers or water bodies. Septage from septic
tanks is collected and transported to septage
treatment plants for treatment (fig. 6). As withseparate systems, pump and lift stations are
sometimes needed. In the East Zone area,
three main factors were taken into accountbefore implementation of combined sewerdrainage: catchment formation, assessmentof existing drainage systems and design
criteria.
Technical challenges were also reflectedin the lack of personnel with extensive
experience in wastewater management.
To address this issue MWCI has employeda cross-functional training programme
to assimilate international practices andenhance institutional expertise.

Diagram of a typical interceptor box

Drainage
Line

Interceptor
Pipe

SEPTAGETREATMENTPLANT

Diversion Weir
Overﬂowduring wet weather

TREATED WASTEWATER

Combined Sewer-Drainage System in the Philippines
Source: Modified from Cleofas, 20138

b. Land availability
Land availability is one of the major
challenges in building treatment facilities,
which often require access to large areas ofland. Unfortunately, Metro Manila is the mostpopulated metropolis in the country and as
a result the majority of identified sites wereusually unavailable due to prioritisation ofresidential and commercial developments.
MWCI therefore combined practicality andcreativity in the construction of STPs, such as
for Pineda STP (the first treatment facility in
the Philippines), which utilised a combinedsystem built underneath a community
basketball court, with its office, laboratoryand grit chamber located above the facility
overlooking the Pasig River, and Olandes
STP, which was constructed undergroundwith the STP grounds converted into a publicpark.

c. Pro-active participation and endorsementof stakeholders
Approval from relevant stakeholders,
including local residents and LGUs, is a key
factor in the success of any sanitation andsewerage project, since advance approval
streamlines permit approvals and right-ofway grants for treatment facility construction
and operations and reduces the risk of delays
due to community issues.

d. Coordination among different
governmental agencies
Another challenge encountered is thecooperation between different agencies. In
the Clean Water Act, there are three national
agencies mandated with direct involvement
in sewer management: a) Department of
Natural Resources and Environment (DENR),b) Department of Health (DOH) and c)

5. Lessons learnt and recommendations
from sanitation and seweragemanagement in the Philippines
a. Political will and consensus among key
stakeholder groups including government,
local communities and private enterprises
play a key role in the success of any
sanitation and sewerage programme.
Until 2007, sanitation and sewerage

99Department of Public Works and Highways(DPWH). With use of the Combined SewerDrainage Systems, close coordination
with LGUs, DPWH and the Metro Manila
Development Authority (MMDA) is vital.
Another example is related to solid waste
management. Solid waste easily clogs sewer
networks and drainage systems and thenaccumulates quickly in STPs and poses
operational concerns. Since LGUs have thegreatest impact on solid waste management,close coordination with these entities
is needed, as well as public awarenesscampaigns covering proper waste disposal.

e. Social acceptance and public awareness
Cost recovery plays an important role inensuring sustainability of the sewerage
services and is also consistent with the‘polluter pays’ principle. As a result,service charges or wastewater tariffs areapplied to all service users. The tariff iscomposed of a basic water tariff and an
additional sewer charge for customers insewered areas. The issue regarding social
acceptability arises from the unwillingnessof customers to pay for additional fees forbetter sewerage and sanitation services
due to the lack of awareness regarding thebenefits of these services to human healthand the environment. Therefore, in order
to set an appropriate tariff and increasesocial acceptance, LGUs and WDs need toconsider user affordability and willingness topay for the given services by conducting aseries of social questionnaire surveys.
In addition, public educational andawareness-raising campaigns should be
introduced to inform customers on the needfor sewerage and sanitation services.

programmes were often of low governmental
priority and as a result received scantinvestment, with higher priority placed onwater supply. According to DOH (2010),
investments in urban sanitation over thelast 30 years allegedly totalled only 1.5% ofcapital expenditures on urban water supply.
Based on intensive literature reviews, it has
been seen that most of the investments
in sanitation and sewerage programmes
in the Philippines come from the privatesector and international development anddonor agencies such as the World Bank,
administered by the MWSS and DENR andchannelled to Metro Manila. However, since2007, the government and private sectors
started to place higher priority on seweragerelated projects, which has resulted in a
number of sewerage network extensions
and wastewater treatment projects being
implemented since 2007, especially since2012. The success of MWCI in implementing
combined systems was also based onstrong partnerships with different sectorsof the community. Various environmental
initiatives implemented by MWCI are actively
carried out by the LGUs and communities –the Linis Ilog and Linis Estero projects andthe Water Trail Programme or “Lakbayan”,
for example. The Water Trail Programme
provides public tours around Manila Water
facilities, holds discussions on watera n d w a s t e w a t e r t r e a t m e n t a n d o ff e r s
environmental sustainability activities sothat different stakeholder groups can better
comprehend the importance of responsible
water use and appropriate wastewaterm a n a g e m e n t. T h rough such advocacy
programmes between MWCI, the LGUs
and the community, challenges facing the
combined system are easier to overcome.

b. Appropriate technical approaches basedon local contexts
Large sanitation and sewerage projects oftenemphasise large-scale infrastructures suchas a separate sewer collection system withcentralised wastewater treatment plant andsewerage facilities, which are very costly andlead to unsustainable projects both in termsof functional performance and cost recovery.
The lesson from MWCI has showed thatappropriate and suitable low-cost sanitationand sewage treatment technologies should
be selected on the basis of a given local
context, such as customer affordability andwillingness to pay, due to differences in
economic circumstances. Further, a strong
consensus from all relevant stakeholder
groups, especially local residents, plays
an important role in the success andsustainability of sewerage projects. In
addition, depending on the situation,practicality and creativity in the constructionof STPs must be brought into play.

10

c. Public-private partnership model
Recently, in certain countries, owing todepressed economies and public sentiment,
viable improvements to infrastructureservices such as sanitation and sewerage
are eagerly seized upon. Privatisation is
one of such viable options, as in the caseof the Philippines. However, governments
should not jump on the privatisation
bandwagon without first selecting wellqualified candidates who can ensure successin a project. In the case of the Philippines,
although both concessionaires sufferedpressures of currency devaluation since
the start of concession contracts, after the
first five years of operation MWSI ran into
difficulties in obtaining loans to financecapital expenditures, while MWCI was inprofit. This was because they had adopted
different financing models and approaches
in addressing the problem. MWCI used thecooperative approach, which recognised thatpeople wanted to pay as little as possible
for their water services. Therefore, they
focused more on public consultations,especially with the urban poor and lowincome communities where pipelines wereshared by several households. By doing
this, the fixed installation cost could be
reduced. As a result, the problem of illegal
connections could be controlled and the
network protected. On the other hand,
MWSI went on the offense and penalised
those caught stealing water. Unfortunately,
this monitoring and enforcement approach
was not very effective (Chia, et al., 2007).
Therefore, it can be seen that the successor failure of privatisation can hinge on thepreconditions as well as a number of otherfactors influencing implementation. Dumol(2000) emphasises that ensuring successfor privatisation rests on taking the right
initial steps, which include: (i) defining the
problems, (ii) categorizing the constraints, (iii)
identifying the preferred privatisation option
and its broad characteristics, (iv) hiring a leadadvisor, (v) managing the work of the adviser,(vi) designing the approval process, (vii)
ontaining a consensus among all stakeholder
groups, especially employees, during theimplementation of the transaction, (viii)
imposing strict prequalification requirements
for bidders, and (ix) designing a transparent
bidding process.

d. Public educational and awareness rising
campaign
Factors that contribute to the success andlong-term sustainability of MWCI lie not
only with the strong partnerships between
different sectors of the community but also
the company’s efforts in striving to enhanceand instil environmental awareness in the
East Zone through its various information
campaigns and wastewater advocacies. For
instance, MWCI has established a Water
Trail Programme or “Lakbayan” wherestudents, guests and representatives fromLGUs and non-government organisations
can participate in an information awarenesscampaign on the treatment of water andwastewater. In 2010, MWCI conducted
Lakbayan tours and plant visits for about
3,000 visitors.

6. Conclusion
As with other countries in Southeast Asia,
the Philippines also faces big challenges
in providing effective domestic wastewaterand septage management, especially for theurban poor and low-income communities. A
number of challenges and constraints in theprovision and implementation of sanitationand sewerage services have been identified,including technical and financial challenges,
land availability, pro-active participationof stakeholders and their endorsement,
coordination among different governmental
agencies, and social acceptance and publicawareness. However, recent efforts by thegovernment towards a stronger commitment
to acceleration of service provision, as well

1111

e. Formulate laws and regulations for
mandatory connections to sewer lines forpermanent residential households
Both concessionaires have to face theproblem of low willingness to pay forbetter sewerage and sanitation services
because the existing laws and regulations
do not provide sanctions for non-complying
households. Thus, in order to improve theservices it is critical that the government
formulate and execute stricter laws andregulations to mandate all permanenthouseholds be connected to sewer lines,
whilst bearing in mind connection fees andservice fees for wastewater treatment basedon discharge volume. This is to ensure equity
in paying for service fees according to thevolume of sewage discharged, i.e., so thatlarge volume dischargers pay higher service
fees than those discharging smaller volumes.
This scheme may pattern the existing watersupply to one of pro-rata payment in terms ofvolume of water used, where in effect highvolume water users subsidise the smallervolume users, and also utilise the threat of
disconnection for non-payment of services as
is used for other utility services.

an innovative public private partnerships
have led to a number of sewerage network
extensions and wastewater treatment
projects being swiftly implemented, bringing
the country closer to its goal of increasing
sewerage coverage and raising the sewage
treatment ratio. Given historical challenges,
best practices and the many lessons learnt
from this sector in the Philippines, it is clearthat successful provision of sanitation andsewerage services can only be achieved
with strong political will from both local andcentral government and close collaboration
among key stakeholder groups including
government, local communities and private
enterprises, appropriate technologies and asuitable managerial model.

7. References
Authors:
NGOC BAO Pham
Policy Researcher
Institute for Global
Environmental Strategies(WEPA Secretariat), JapanAECOM, Sandec and Eawag (2010). A Rapid Assessment of Septage Management in Asia: Policies
and Practices in India, Indonesia, Malaysia, the Philippines, Sri Lanka, Thailand, and Vietnam. Preparedby AECOM International Development, Inc. and the Department of Water and Sanitation in Developing
Countries (Sandec) at the Swiss Federal Institute of Aquatic Science and Technology (Eawag). Available oninternet: http://www.waterlinks.org/library/septage-management/septage-report
Ancheta, C. (2000). Urban sewerage and sanitation: 30 years of experience and lessons, Manila: Water
Supply & Sanitation Performance Enhancement Project – Phase I. Available on internet: http://docs.watsan.
net/Downloaded_Files/PDF/WSP-2002-Urban%20sewerage.pdf
Campos, M. R. A. (2012). Status of Improvement of Water and Sanitation Facilities in Metro Manila.
Available on: http://www.wepa-db.net/pdf/0712forum/paper20.pdf

Tetsuo Kuyama
Manager(Water Resource Management)
Institute for Global
Environmental Strategies(WEPA Secretariat), Japan

Chia, P.L.G., Chua, C.K., Kim, F.C., Teo, S., Toh, K.L. (2007). Water Privatisation in Manila, Philippines– Should Water be Privatised? A Tale of Two Water Concessions in Manila. INSEAD –Economic andManagement in Developing Countries. Available on internet: http://www.circleofblue.org/waternews/wpcontent/uploads/2012/06/Insead_Water_Privatisation_Manila_Philippines.pdf
Cleofas, L.C. (2011). Domestic Wastewater Management in Mega Manila: Partnership in Action.
Presentation at the 3rd WEPA International Workshop held from 21st-22nd September 2011, Manila,
Phillipines.
Cleofas, L.C. (2013). Decentralised Domestic Wastewater Treatment in Metro Manila: Public-Private
Partnership. Presentation at the WEPA 4th International Workshop and 8th Annual Meeting held from 1819th February 2013, Siem Reap, Cambodia.
DILG & DOH (2011). The Philippines Water Supply and Sanitation – Sector Assessment Report. Preparedby Department of Interior and Local Government (DILG) & Department of Health (DOH), Philippines.
DOH (2010). Philippines Sustainable Sanitation Roadmap. Department of Health (DOH), Philippines.
Available on internet: http://www.wpro.who.int/philippines/publications/phil_sanitation_road_map/en/index.
html
Dumol, M. 2000. The Manila Water Concession: A Key Government Official’s Diary of the World’s Largest
Water Privatisation. Washington, DC: The World Bank. Available on internet: http://documents.worldbank.
org/curated/en/2000/07/443557/manila-water-concession-key-government-officials-diary-worlds-largestwater-privatisation
Hutton, G., Rodriguez, U.E., Napitupulu, L., Thang, P., Kov, P. (2008). Economic impacts of sanitation inSoutheast Asia. Water and Sanitation Program, the World Bank. Available on internet: http://www.wsp.org/
sites/wsp.org/files/publications/Sanitation_Impact_Synthesis_2.pdf
Manila Water Company (MWCI) (2012). Manila Water 2012 Annual Report. Manila Water Company,
Inc. Available on internet: http://www.manilawater.com/investor/Investor%20Resources/Pages/
DownloadableMaterials.aspx

Layout:Yumi NishimuraInstitute for Global
Environmental Strategies, Japan

Maynilad Water Services (MWSI) (2010). Maynilad 2010 Annual Report. Maynilad Water Services, Inc.
Avialable on internet: http://www.mayniladwater.com.ph/news05.php
Mulingbayan, M.T. (2013). Septage Management Experience in The East Zone of Metro Manila.
Presentation at the WEPA 4th International Workshop and 8th Annual Meeting held from 18-19th February
2013, Siem Reap, Cambodia.
National Statistical Coordination Board (2013). List of Regions. Accessed on internet on 20/08/2013. http://
www.nscb.gov.ph/activestats/psgc/listreg.asp

Contact:
WEPA secretatiat
Institute for Global Envrionmental Strategies[IGES]Natural Resources and Ecosystem Services Area
2108-11 Kamiyamaguchi, Hayama, Kanagawa,
240-0015, Japan
TEL: +81-46-855-3700, FAX: +81-46-855-3709
E-mail: contact@wepa-db.net
URL: http://www.iges.or.jp/

WHO & UNICEF (2013). Progress on sanitation and drinking-water - 2013 update. World HealthOrganisation and UNICEF. Available on internet: http://www.who.int/water_sanitation_health/publications/2013/jmp_report/en/
World Bank (2003). Philippines Environment Monitor 2003 – Water Quality. Manila: The World Bank Office,Philippines. Available on internet: http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2004/05/24/000012009_20040524135608/Rendered/PDF/282970PH0Environment0monitor.pdf
World Bank (2007). Philippines Environment Monitor 2006 – Environmental Health. Manila: The World Bank
Office, Philippines. Available on internet: http://siteresources.worldbank.org/INTPHILIPPINES/Resources/
PEM06-fullreport.pdf
World Bank (2013). Philippines: Providing Sewerage and Sanitation Services to Over 3 Million People.
Available on internet: http://www.worldbank.org/en/results/2013/04/08/philippines-manila-third-sewerageproject
Figure 4 & 6: Figures obtained a permission to use from the author (Cleofas, 2013)
Figure 5: Figures and data obtained a permission to use from Manila Water Company, Inc. (MWCI, 2014)

Acknowledgements:
Following WEPA partner and advisor kindly provided valuable comments and suggestion for thispolicy brief;
Vicente B. Tuddao Jr., Director for Governance and Enforcement, Department of Environment
and Natural Resources, Philippines
Leonor C. Clefas, Deputy Administrator Engineering and Operations, Metropolitan Waterworks
and Sewerage System, Philippines
Mark Tom Mulingbayan, Department Head, Manila Water Company, Philippines
Daisuke Sano, Associate Professor, Hokkaido University,Japan

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