NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
SENATE
S. B. No. 906
Introduced by Senator SONNY ANGARA
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72 JUL 27 P4‘43
RECEiVtO BY.
AN ACT
GRANTING ONE-TIME CONDONATION OF INTEREST ARREARAGES AND 
PENALTIES IN FAVOR OF QUALIFIED LOCAL WATER DISTRICTS (LWDs) 
PERTAINING TO THEIR LOANS WITH THE LOCAL WATER UTILITIES 
ADMINISTRATION (LWUA)
EXPLANATORY NOTE
Presidential Decree No. 198 or the Provincial Water Utilities Act of 1973 
mandated the creation, operation, maintenance and expansion of reliable and 
economically viable and sound water supply and wastewater disposal system in the 
country as an objective of national policy of high priority. In this regard, PD 198 
created the Local Water Utilities Administration (LWUA), a government-owned and 
controlled corporation (GOCC), with a specialized lending function, mandated to 
promote and oversee the development of water supply systems In provincial cities 
and municipalities outside of Metropolitan Manila.
In the past few years, a number of LWDs were not able to make the 
necessary loan amortizations to the LWUA on time resulting in substantial loan 
arrearages, interests and penalties. If these arrearages are to be collected and paid, 
LWDs would be faced with the difficult choice of recovering their substantial loss 
either by increasing the water rate charged to their clients or by contracting new 
loans from LWUA. Either way, the quality of services offered by LWDs will be 
seriously affected.
This bill seeks to grant a one-time condonation of arrearages, interests and 
penalties assessed against local water districts (LWDs) pertaining to their late


payment or non-payment of loan amortizations to the Local Water Utilities 
Administration (LWUA). This one-time condonation of loan arrearages, interests and 
penalties is necessary to give LWDs a chance to use any savings they have to 
improve and/or expand their services, or to prevent any increase in water rate 
charges.
In view of the foregoing, approval of this bill is earnestly sought.
SONNY ANGARA


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
SENATE
S. B. No. 906
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‘22 JUL27 P4 43
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Introduced by Senator SONNY ANGARA
AN ACT
GRANTING ONE-TIME CONDONATION OF INTEREST ARREARAGES AND 
PENALTIES IN FAVOR OF QUALIFIED LOCAL WATER DISTRICTS (LWDs) 
PERTAINING TO THEIR LOANS WITH THE LOCAL WATER UTILITIES 
ADMINISTRATION (LWUA)
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled:
1 
Section 1. Short Title. - This Act shall be known as the "Condonation of Loan
2 
Interest Arrearages and Penalties in Favor of Local Water Districts (LWDs) Act of
3 
2022."
4 
Sec. 2. Declaration of Policy. - It is hereby declared the policy of the State:
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a) To ensure the effective and efficient operation of the LWDs in the country;
6 
and
7 
b) To ensure that the LWDs provide quality service to its concessionaires at
8 
reasonable cost.
9 
Sec. 3. Scope. - The Act shall provide framework for the granting of one-time
10 
condonation of outstanding interest arrearages and penalties in favor of qualified
11 
LWDs. The subject interest arrearages and penalties are being assessed by the Local
12 
Water Utilities Administration (LWUA) against the said LWDs in connection with their
13 
loans with the former that are outstanding as of the effectivity of this Act.
14 
Sec. 4. Qualified LWDs. - LWDs that are qualified for the one-time
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condonation of outstanding interest arrearages and penalties assessed by the LWUA
16 
shall be those which do not have enough financial capacity to pay on time their loan
17 
amortization as may be determined by the LWUA. The LWUA shall come up with an


1 
updated list of LWDs, which qualify for the one-time condonation of outstanding
2 
interest arrearages and penalties.
3 
Sec. 5. One-Time Condonation. - The condonation of loan interest arrearages
4 
and penalties shall be undertaken only once to assist qualified water districts in
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updating their loan amortizations to LWUA. After the said condonation, the LWDs
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benefited thereby shall no longer be qualified to another condonation of similar
7 
nature in the future.
8 
Sec. 6. Impiementing Rules and Regulations. - The LWUA, in coordination
9 
with the National Economic Development Authority and the Department of Finance,
10 
shall promulgate the necessary Implementing Rules and Regulations (IRR) within six
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(6) months from the effectivity of this Act.
12 
Sec. 7. Separability Clause. - If for any reason, any provision of this Act is
13 
declared unconstitutional or invalid, the remainder of this Act or any provision hereof
14 
not affected thereby shall remain in full force and effect.
15 
Sec. 8. Applicability and Repealing Clause. - The provisions of Presidential
16 
Decree (PD) No. 198 or the "Provincial Water Utilities Act of 1973", as amended,
17 
shall continue to have full force and effect except insofar as they are inconsistent
18 
with this Act. All laws, orders, issuances, circulars, rules and regulations or parts
19 
thereof, which are inconsistent with the provisions of this Act are hereby repealed or
20 
modified accordingly.
21 
Sec. 9. Effectivity. - This Act shall take effect fifteen (15) days after its
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complete publication either in the Official Gazette, or in at least two (2) newspapers
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of general circulation.
Approved,