FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
SENATE 
Introduced by Senator JUAN MIGUEL F. ZUBlRl 
EXPLANATORY NOTE 
Local Water Districts serve a vital need of the public. It is not surprising that in 
case of Davao Water District, the Supreme Court made an unequivocal declaration that 
they are government-owned and -controlled corporations whose operations are 
governed by public laws. 
Local Water Districts are entities engaged in business highly impressed with 
public interest. While definitely governed by public laws, they must be given a high 
degree of autonomy in order to conduct their operations with optimum profitability. 
As business entities, water districts are under the penumbra of the Local Water 
Utilities Administration (LWUA) pursuant to P.D. 198, as amended. The original law was 
passed a long way back. Despite the constant tinkering of the legislature, none was 
done to increase its capitalization and bestow it with wider latitude and discretion in the 
conduct of its affairs. 
LWUA and all the water districts nationwide are under the management of 
dedicated and competent managers. After all, they are the first to feel the effects of 
inefficient water distribution system. It is expected that once approved, this measure will 
encourage LWUA and water districts nationwide to 
adopt innovative and 
technologically-sound approaches to better serve the consuming public. 
In view of the foregoing, immediate consideration of this bill is earnestly 
requested. e 
UEL F. ZUBlRl 


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FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
SENATE 
S. No. 1623 
Introduced by Senator JUAN MIGUEL F. ZUBlRl 
AN ACT 
FURTHER AMENDING PRESIDENTIAL DECREE NO. 198, OTHERWISE 
KNOWN AS THE PROVINCIAL WATER UTILITIES ACT, AS AMENDED, 
PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES 
Be it enacted by the 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. Capifal Sfock. - The authorized capital stock of the Local Water 
Utilities Administration is TWENTY-FIVE BILLION PESOS (P25,000,000,000.00) 
divided 
into 
SIXTY-TWO 
MILLION 
FIVE 
HUNDRED 
THOUSAND 
PESOS 
(P62,500,000.00) shares of stocks with a par value of Four hundred pesos per share 
which shall be subscribed by the National Government and opened to subscription by 
private investors or government financial institutions." 
SECTION 2. Section 72 of Presidential Decree No. 198 shall hereby be amended to 
read as follows: 
"Sec. 72. Domestic Borrowing Authority. - 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 TEN BILLION PESOS ($10,000,000,000.00)'' 
SECTION 3. Section 73 of Presidential Decree No. 198 shall be amended to read as 
follows: 


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"Sec. 73. Authority to Contract Foreign Loan. - The Administration is hereby 
authorized to contract loans, credits, in any convertrible foreign currency or capital 
goods, and to incur indebtedness from time to time with foreign governments, or any 
international financial institutions or fund sources, including supplier's credits or'deferred 
payment arrangements, the total outstanding amount of which, excluding interests shall 
not exceed SEVEN HUNDRED MILLION US Dollars (US$700,000,000.00) or the 
equivalent thereof in other currencies, on terms and conditions promulgated by the 
Secretary of Finance and the Monetary Board for the accomplishment of its objectives; 
and to enter into and execute contracts and other documents specifying such terms and 
conditions. 
The President of the Philippines, by himself or through his duly authorized 
representative, is hereby authorized to negotiate and contract with foreign governments 
or any international financial institution or fund sources in the name and on behalf of the 
Administration, one or several loans, for the purpose of implementing the 
Administration's program for the promotion and development of local water utilities 
through the Administration's financing or lending operations. 
The President of the Philippines, by hirnself or through his duly authorized 
representative, is 
hereby further 
authorized to 
guarantee, 
absolutely 
and 
unconditionally, as primary obligor and not as a mere surety, in the name and on behalf 
of the Republic of the Philippines, the payments of the loans, credits and indebtedness 
up to the amount herein authorized, over and above the amounts which the President of 
the Philippines pursuant to loan agreements entered into with foreign governments or 
any international financial institution or fund sources. 
The loan credits and indebtedness contracted under this section shall be in 
accord with the provisions of the Foreign Borrowing Act, as amended. 
SECTION 4. Repealing Clause. - All or any provision of the Provincial Water Utilities 
Act of 1973 which are contrary or inconsistent with any provisions hereof are hereby 
repealed or modified accordingly. 
SECTION 5. Effectivity. - This Act shall take effect after fifteen (15) days following its 
publication in two (2) newspapers of general circulation. 
Approved, 
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