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THIRTEENTH CONGRESS OF THE 
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Third Regular Session 
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REPUBLIC OF THE PHILIPPINES } 
,*' P 
I,. 
S E N A T E  
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S. B. NO. 
Prepared jointly by the Committees on Public Works; Public Services; Ways and Means; and Finance with 
Senators Osmeiia 111, Enrile, Magsaysay Jr., Revilla Jr., Arroyo 
and Drilon as authors 
s4"- 
AN ACT 
FURTHER AMENDING PRESIDENTIAL DECREE NO. 198, OTHERWISE KNOWN AS THE 
PROVINCIAL WATER UTILITIES ACT, AS AMENDED, PROVlDiNG FUNDS THEREFOR AND FOR 
OTHER PURPOSES 
Be it enacted by fhe Senate and the House of Representatives of the Philippines in Congress assembled: 
SECTION 1. Section 67 of Presidential Decree 198, as amended, is hereby amended to read as follows: 
"SEC. 67. Capital Stock. - The authorized capital stock of the Local Water Utilities 
Administration is FIFTY BILLION PESOS (P50,000,000,000.00) [two billion five hundred million 
pesos] divided into ONE HUNDRED TWENTY FIVE MILLION [twelve million five hundred 
thousand] shares of stocks with a par value of FOUR [two] hundred pesos per share which shall 
be subscribed by the National Government and opened to subscription by private investors or 
government financial institutions: PROWD€O, HOW€V€R, THAT GOVERNMMT FlNANClAL 
INSTITUTIONS MAY INVEST AT LEAST ONE PERCENT (1%) BUT NOT MORE THAN FIVE 
PERCENT (5%) OF THEIR NET INCOME FOR STOCK SUBSCRIPTION AS PROVIDED FOR 
UNDER THIS ACT: PROV/D€D, FURTHER, THAT THE ADMINISTRATION SHALL JAKE 
ACTiVE STEPS FOR THE PUBLIC OFFERING OF ITS SHARES." 
SEC. 2. Section 72 of Presidential Decree No. 198 shall hereby amended to read as follows: 
"SEC. 72. Domestic AND FOREIGN Borfowhg Authorjfy, - The Administration shall 
have the authority to borrow money from all domestic loan sources whether government or 
private: Provided, That its loans outstanding from domestic sources at any one time shall not 
exceed one billion pesos, AND IN THE CASE OF FOREIGN LOANS, THE CEILING SHALLI. BE 
ONE BILLION U.S. DOLLARS (US$1,000,000,000.00): PROVIDED, HOWEVER, THAT THE 
ADMlNlSTRATiON MAY ONLY PROCEED OR AVAIL OF FOREIGN LOANS WITH PRIOR 
CLEARANCE AND APPROVAL OF THE DEPARTMENT OF FINANCE: PROVIDED, FURTHER, 


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THAT THE ADMINISTRATION MAY CONVERT ITS AUTHORIZED FOREIGN DEBT INTO PESO 
OR LOCAL LOANS WHENEVER IT DEEMS NECESSARY." 
SEC. 3. A new provision after Section 47 under Exclusive Franchise shall be put in place and shall read, as 
follows: 
"SEC. 47-A. PRIVATIZATION OF WATER DISTRICTS. - THE EXISTING WATER 
DISTRICTS SHALL CONVERT THEMSELVES INTO EITHER STOCK COOPERATIVES UNDER 
THE COOPERATIVE CODE OF THE PHILIPPINES OR STOCK CORPORATION UNDER THE 
CORPORATION CODE WITHIN FIVE (5) YEARS FROM THE PASSAGE OF THIS ACT: 
PROVIDED, THAT NOTHING CONTAINED IN THIS ACT SHALL DEPRIVE PRIVATIZED 
WATER DISTRICTS OF ANY PRIVILEGE OR RIGHT GRANTED TO THEM UNDER 
PRESIDENTIAL DECREE 198, AS AMENDED, AND OTHER EXISTING LAWS: PROVIDED, 
FURTHER, THAT ALL ASSETS OF WATER DISTRICTS SHALL BE CONVERTED INTO 
CONTRIBUTIONS OF THE GOVERNMENT, AS REPRESENTED BY THE LOCAL 
GOVERNMENT UNIT, TO THE WATER COOPERATIVES OR CORPORATIONS. 
THE 
GOVERNMENT SHALL MAINTAIN IN THE SAID COOPERATIVE OR CORPORATION AT 
LEAST FORTY PERCENT (40%) OF THE STOCKS OR SHARES THEREIN: PROVIDED, 
FURTHERMORE, THAT NO SINGLE MEMBER OF THE WATER COOPERATIVE OR 
STOCKHOLDER SHALL OWN MORE THAN TWENTY PERCENT (20%) OF THE SHARES OR 
STOCKS THEREIN: PROVIDED, FINAL1 Y, THAT NOTHING IN THIS ACT SHALL PREVENT 
ANY MERGER OR CONSOLIDATION BY AND BETWEEN ANY WATER UTILITY, WATER 
COOPERATIVE OR CORPORATION. 
"LWUA AND THE NATIONAL WATER RESOURCES BOARD (NWRB), IN 
CONSULTATION WITH THE SECURITIES AND EXCHANGE COMMISSION (SEC), 
COOPERATIVES DEVELOPMENT AUTHORITY (CDA), REPRESENTATIVES OF PRIVATE 
WATER UTILITIES AND WATER DISTRICTS AND OTHER RELEVANT SECTORS AND 
GOVERNMENT AGENCIES, SHALL PROMULGATE THE NECESSARY IMPLEMENTING 
RULES AND REGULATIONS (IRR) TO IMPLEMENT THIS SECTION WITHIN SIX (6) MONTHS 
AFTER ITS APPROVAL. 
"SEC. 47-E. RIGHTS OF OTHER WATER UTILITIES. - ALL OTHER EXISTING 
PRIVATE WATER UTILITIES SHALL ACQUIRE THE RIGHTS AND PRIVILEGES GRANTED TO 


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WATER DISTRICT COOPERATIVES OR CORPORATIONS UNDER THIS ACT, PROVIDED 
THAT THEY ARE, OR HAVE CONVERTED THEMSELVES INTO, WATER COOPERATIVES OR 
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CORPORATIONS WHETHER STOCK OR NON-STOCK." 
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newspapers of general circulation. 
Approved, 
SEC. 4. Repealing C/ause. - All or any provisions of the Provincial Water Utilities Act of 1973 which are 
contrary or inconsistent with any provisions hereof are hereby deemed repealed or modified accordingly. 
SEC. 5. Effecfivify. - This Act shall take effect after fifteen (15) days following its publication in two (2)