Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila
NINETEENTH CONGRESS
Second Regular Session
HousE BILL No. 1 G 1 5 0
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Introduced by Honorable Representatives
ARLENE D. BROSAS (Gabriela Women's Party);
FRANCE L. CASTRO (ACT Teachers Partylist);
and RAOUL DANNIEL A. MANUEL (Kabaitaan Partylist)
AN ACT
REVERTING CONTROL AND OWNERSHIP OF LOCAL WATER DISTRICTS TO
LOCAL GOVERNMENT UNITS AND PROHIBITING THE PRIVATIZATloN 0F
PUBLIC WATER SYSTEMS, WATER TREATMENT AND DISTRIBUTION
FACILITIES AND RELATED SERVICES, AND PROVIDING PENALTIES FOR
VloLATIONS THEREOF
EXPLANATORY NOTE
ln August 1997 the first large-scale water privatization scheme in Asia transpired when
the  Philippine  government  privatized  the  Metropolitan  Waterworks  and  Sewerage
System (MWSS). The MWSS was originally established with the mandate to "ensure
an  uninterrupted and adequate supply and distribution of potable water for domestic
and  other  purposes  at just  and  equitable  rates"  as  stipulated  in  R.A.  6234  which
created the MWSS.  However, through the passage of RA 8041  or the "Water Crisis
Act"  of  1997,  the  MWSS was  privatized  through  a  25-year concession  agreement
effectively  transferring  operational  responsibilities  to  two  private  concessionaires
Manila Water Company, Inc. and Maynilad Water Services, Inc.
35      Two decades later, however, the privatization ofMWss hasonly burdened consumers
36      with higherwater rates. From php2.00-Php4.00 in 1997, basic tariff rates increased to
37      Php34.00-Php47.00  in  2018.  This  is  equivalent to  a  970%  increase  for consumers
38      served by Manila water and 596% increase for those within Mayni[ad water services'
39      jurisdiction. Consumers were also made to shoulder various charges including a 120/o
40      value  added  tax OVAT),  20%  envronmental  charge,  and  foreign  currency exchange
41       adjustment   (FCDA).   No  wonder  the   two   concessionaires   reported   a   whopping
42      combined accumulated income of phpl3.8 billion for 20181. The charges have since
43      been modified yet rates and profits have further increased since.
Further,  the  same  problems of inadequate,  unreliable  coverage  as well  as  chronic
service interruptions remain especially in urban poor areas. Meanwhile, the role of the
government continues to diminish as workers' welfare and employment issues spark
[https://www.mpic.com.ph/wp,content/unloads/2019/06/2018-I.`inancial-Statemen:tife"`&
https//w\".manilawater.com/corporate/agos/2019-02-26/mamla-\\€iter-j2it.```§-p^-ibillioil-net-income+p££2J£


further conflict.
ln  2022,  former  president  Rodrigo  Duterfe  signed  a  law  granting  another  25-year
franchise for Maynilad and Manila Water despite the horrible water service experience
of   millions   of   Filipinos   under   the   two   private   concessionaires.   A   renegotiated
concession  agreement  was  signed   in  May  2023  which  reintroduced  the  foreign
currency  differential  adjustment  (FCDA)  scheme  and  further  watered  down  the
regulatory functions of the government.
Unmindful  of the  onerous  deals  made  under the  MWSS  privatization  scheme,  the
government has even vigorously pushed for the privatization of local water districts.
Private  companies  like  Metro  Pacific,  Manila  Water,  and  Prime  Water  have  taken
control of local water supply systems.  Out of the more than 500 local water districts
previously run as a government-owned or 4ontrolled corporation (GOCC), nearly half
have been  privatized  in the  last few years.  Prime Water alone controls at least  100
local water districts nationwide as of 2021.2 Several consumers in various regions in
the country have complained of Prime_Water's terrible service - from low pressure to
no water, regular water supply interruptions, to dirty water flowing out of their faucets.
Local water districts' privatization has also resulted in worse management and mass
layoffs-
22      As such, there is a need for Congress to review the continuing  privatization of water
I  23       services - a  vital  resource  and  basic need  of the  Filipino  people - considering  the
24      negative impact on the rights of the people to safe, affordable and accessible water.
25       lt  is  therefore  time  to  rethink  the  privatization  policy  of the  country's  public  water
26      systems and give back to the public sector the ownership and control of these vital
27       public services,  particularly the provision of water supply to citizens.
28       Hence, support for this bill is earnestly sought.
Approved,
Gabriela Women's Party
2  httris://mb.com .Dh/2021 / 1 /6/Prime-u ater-has-taken-o\ er-loo-u ater-districts
4/
A. MANUEL
Kabataan Partylist


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila
NINETEENTH CONGRESS
Second Regular Session
HousE BILL NO. |th5 0
Introduced by Honorable Representatives
ARLENE D. BROSAS (Gabriela Women's Party);
FRANCE L. CASTRO (ACT Teachers Partylist);
and RAOUL DANNIEL A. IVIANUEL (Kabataan Partylist)
AN ACT
REVERTING CONTROL AND OWNERSHIP OF LOCAL WATER DISTRICTS T0
LOCAL GOVERNIVIENT UNITS AND PROHIBITING THE PRIVATIZATION 0F
PUBLIC WATER SYSTEMS, WATER TREATMENT AND DISTRIBUTION
FACILITIES AND RELATED SERVICES, AND PROVIDING PENALTIES FOR
VIOLATloNS THEREOF
Be it enacted by the Senate and House of Representatives of the Republic of the
Philippines in Congress assembled:
SECTION  1. Title.  This  at shall  be  known  as the  "Anti-Privatization  of Public Water
Systems Act."
SECTION 2. Declaration of Policy. It shall be the policy of the State to provide safe
potable water and sustainable water treatment and distribution systems to the public.
Further, the State shall endeavor to make essential goods, including the right to water
and other related services available to all the people at an affordable cost.
Pursuant  thereto,   the  government  shall  address  the  issues  relevant  to  chronic
interruptions in water services including, but not limited to, supply, distribution, finance,
privatization  of  state-run  water  facilities,   and  the  protection  and  conservation  of
watersheds, including the serious matter of graft and corruption in all the agencies and
private entities involved in the provision of water services in the country.
SECTION 3. Definition of terms. For the purposes of this Act, the term:
a.   Prl-vafi-zatr.on  refers  to  the  transfer  of  public  utilities  or  organizations  from
government  to  complete  or  partial  private  ownership  or control.  These  shall
include  outright sale,  public-private  partnership,  contracting  out of equipment
and   services,   joint   venture   agreements,   franchising,   bulk   water   supply
agreements,  management control,  non-revenue water reduction  agreements,
leasing, user-charges and other analogous agreements.
b.   Loca/ Wafer Di-strl-cfs refer to local corporate entities that operate and maintain


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water  supply  system  in  one  or  more  provincial  cities  or  municipalities.  It  js
established on a local option basis and is classified as government-owned or -
controlled corporations (GOCCs).
c.   Pub/i.c Wafer System refers to the provision to the public of water for human
consumption  through   pipes  or  other  constructed   conveyances.   The  term
includes  any  collection,  treatment,  storage,  and  distribution  facilities  under
control  of the  operator of such  system  and  used  primarily in  connection with
such system, and any collection or pretreatment storage facilities.
10
11             d.   Consunermeans a natural person who is a purchaser, recipient or prospective
12                   purchaser of water supply from the public water system.
13
14      SECTION 4. Reverting control and ownership of Local water Districts to Local
15      Government Units.   All water supply systems and facilities devolved to local water
16      districts that have been privatized including those subject to joint venture agreements
17       (JVAs) and/or other similar forms of privatization schemes are hereby re-nationalized
18      and/or returned to the management, supervision and control of local government units
19       (LGUs) pursuantto sec.17 ofR.A. 7160 orthe Local Governmentcode.
20
21       SECTloN   5.  Authority  to  use   income.   Upon   implementation   of  this  Act,   re-
22      nationalized water systems and local water districts are hereby authorized to use the
23       income  derived  from  their  operations  to  improve  and  upgrade  the  services  they
24       provide;  Provided, That the supporting financial and work plans are first approved by
25       the local water district's Board of Directors.
26
27      SECTION   6.   Prohibition   of  Privatization   of  Public  Water  Systems,   Water
28      Treatment  and  Distribution  Facilities,  and  Related  Services.  No  public  water
29      system,   treatment  and   distribution   facility,   and   other   related   services   shall   be
30       privatized.  Likewise,  under  no  circumstance  shall  any  unit  of government,  or  any
31       person,   agency   whether   natural   or  juridical,   initiate,   cause   and   approve   the
32       privatization  of any  public water system,  treatment or distribution facility,  and  other
33       related services.
34
35       SECTION 7. Liability and Accountabilify. Any person, whether natural orjuridical,
36      who  initiates,   causes  or  approves  the  privatization  of  any  public  water  system,
37      treatment  or  distribution  facility  and  other  related  services  shall  be  considered  in
38       violation ofthisAct.
39
40      SECTION  8.  Penalties.  Any  person who violates any  provision  of this Act shall  be
41       penalized accordingly:
42
43             a.   First offense -A fine not less than one hundred thousand pesos (P100,000.00)
44                   but not more than two hundred thousand pesos (P200,000) and suspension of
45                    one year to two years from public office;
46
47            b.   Second  Offense  -  A  fine  of  not  less  than  two  hundred  thousand   pesos
48                   (P200,000.00) but not more than five hundred thousand pesos (P500,000.00)
49                    and  temporary disqualification from  holding any public office of not less than


three years but not more than six years; and
c.   Third   Offense  -  A  fine   of  not   less   than   five   hundred   thousand   pesos
(P500,000.00) but not more than eight hundred thousand pesos (P800,000.00)
and removal from public office and perpetual disqualification from holding  any
public position or office.
SECTION 9. Implementing Rules and Regulations. The National Water Resources
Board (NWRB) and the Local Water Utilities Administration (LWUA) shall promulgate
the  rules  and  regulations  necessary  to  implement  the  provisions  of this  Act  within
ninety days (90) from its effectivity.
SECTloN 10. Separability Clause. If any provisions of this Act is declared invalid or
unconstitutional, other provisions hereof which are not affected thereby shall continue
to be in full force and effect.
SECTION  11.  Repealing Clause. All  laws,  orders,  issuances,  rules and  regulations
or  part  thereof  inconsistent  with  the  provisions  of  this  Act  are  hereby  repealed,
amended or modified accordingly.
SECTION  12.  Effectivity clause.  This Act shall take effect within fifteen  (15)  days
after its publication in the Official Gazette or in at least two (2) newspapers of general
circulation, whichever comes earlier.
Approved,