Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

‘TWENTIETH CONGRESS
First Regular Session

HOUSE BILL No.2908

Introduced by Representative LEILA M. DE LIMA

AN ACT
ESTABLISHING A LEGISLATIVE FRAMEWORK FOR WATER SERVICES IN THE
PHILIPPINES, BY REFORMING NON-PERFORMING JOINT VENTURE
AGREEMENTS AND ENHANCING INSTITUTIONAL OVERSIGHT
AND ACCOUNTABILITY

EXPLANATORY NOTE

Article Il, Section 11 of the 1987 Constitution provides that, ‘[tJhe State values the
dignity of every human person and guarantees full respect for human rights.”

The United Nations (UN) recognizes access to water that is safe, clean, sufficient,
accessible, and affordable as a human right fundamental to people's health, dignity, and
prosperity.’ UN Resolution 64/292 adopted on 28 July 2010 “recognizes the right to safe
and clean drinking water and sanitation as a human right that is essential for the full
‘enjoyment of life and all human rights” and calls upon States "to scale up efforts to provide
safe, clean, accessible and affordable drinking water and sanitation for all." General
Comment No. 15 on Articles 11 and 12 of the International Covenant on Economic, Social,
and Cultural Rights (CESCR), to which the Philippines is a State Party, states that the
right to water, although not explicitly mentioned in the aforementioned articles of the
CESCR, “clearly falls within the category of guarantees essential for securing an
adequate standard of living, particularly since it is one of the most fundamental conditions
for survival.”>

* https:/Awww.unwater.orgiwater-facts/human-rights-water-and-sanitation.
? https://docs. un. org/en/A/RESI64/292,
° https:/Awww.refworld.org/legal/general/cescr/2003/en/39347.

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The UN's recognition of the right to water, as inextricably linked to other rights
enshrined in the International Bill of Human Rights, is seen in a wide range of international
documents, such as Article 11 of the CESCR General Comment No. 6,* Article 14 of the
Convention on the Elimination of All Forms of Discrimination Against Women,° and Article
24 of the Convention on the Rights of the Child® — all Covenants to which the Philippines
is a State Party.

As such, the State ought to ensure its people's access to water by coming up with
measures for the protection of this fundamental human right.

This right to safe, clean, sufficient, accessible, and affordable water finds cogency
in the current water crisis in the country. The worsening problem has been evident in
several reports of widespread failures of Local Water Districts (LWDs) operating under
Joint Venture Agreements (JVAs) with unscrupulous private concessionaires. The reports
from consumers across the country tell of intermittent water supply, weak water pressure,
reduced service hours, surging Non-Revenue Water (NRW) levels exceeding efficiency
benchmarks, and yellowish and/or foul-smelling water coming from their faucets.

These problems are identified to have arisen from several factors, such as the
failure of private partners to deliver on their commitments to. increase water production
and expand service coverage, and the flawed inception and execution of many JVAs,
which offen feature irregularities, like unjustified revenue-sharing schemes and the
absence of robust penalty clauses for failures to deliver and perform. These onerous
JVAs are often a result of unsolicited proposals that bypass competitive bidding
processes and thus become disadvantageous since price and performance are not
negotiated nor compared with other proposals. What further exacerbates this crisis in the
water sector is the fragmented, unclear, and unempowered oversight mechanism for
LWDs and their private partnerships as the government agencies involved grapple with
overlapping mandates and roles.

This bill seeks to address the systemic failures that have ultimately left the
government and the people vulnerable to disadvantageous contracts in the water sector
and helpless in effectively and efficiently seeking remedies, such as the imposition of
penalties for the private partners or termination of JVAs. Emphasizing the primacy of
ensuring that the Filipino people affected by the water crisis have their access to water
forthwith reinstated, this bill fully adopts Senate Bill No. 216 filed by Senator Risa
Hontiveros in the 20" Congress.

“ https:/Awww. refworld.org/legal/general/cescr/1995/en/27839.

5 https:uwww. ohchr.org/enfinstruments-mechanisms/instruments/convention-elimination-all-forms-
discrimination-against-women.

® https:/www. ohchr.org/en/instruments-mechanisms/instruments/convention-rights-child.

2


Early approval of this measure is requested.

dea estlec
LEILA M. DE LIM


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

‘TWENTIETH CONGRESS
First Regular Session

House BILL No2906

Introduced by Representative LEILA M. DE LIMA

AN ACT
ESTABLISHING A LEGISLATIVE FRAMEWORK FOR WATER SERVICES
IN THE PHILIPPINES, BY REFORMING NON-PERFORMING JOINT VENTURE
AGREEMENTS AND ENHANCING INSTITUTIONAL OVERSIGHT
AND ACCOUNTABILITY

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

CHAPTER 1
GENERAL PROVISIONS AND DECLARATION OF POLICY

SECTION. 1. Short Title. - This Act shall be known as “The 2025 Water Crisis
Act.”

SEC. 2. Declaration of Policy. - The State hereby declares its policy to
recognize and uphold water as a fundamental human right and a public trust, ensuring
access to safe, sufficient, affordable, and sustainable water supply. sewerage, and
sanitation services. The provision of these services, particularly through Local Water
Districts (LWDs) and their joint venture agreements (JVAs), is imbued with paramount
public interest and shall be subject to stringent regulation and oversight to ensure
efficiency, reliability, and affordability

This Act specifically addresses the pervasive issues of non-performing and
onerous JVAs, including flaws in their inception, execution, and monitoring. It aims to
rectify systemic failures in contractual terms, performance measurement, institutional
oversight, and transparency. Furthermore, it seeks to resolve the existing institutional
overlaps and inadequacies among govemment agencies in providing effective
assistance and regulatory guidance to water districts, ensuring coordinated action and


robust accountability for both public officials and private entities involved in these
agreements.

SEC. 3. Scope and Applicability. - This Act shall primarily focus on the
governance, regulation, and oversight of Local Water Districts (LWDs) and their joint
venture agreements (JVAs) or other forms of public-private partnerships (PPPs) with
private water service providers nationwide, particularly concerning issues of contract
inception, performance, and termination. It shall also cover the roles and
responsibilities of national government agencies and local government units in
ensuring the effective management and delivery of water services by LWDs and their
partners.

SEC. 4. Definition of Terms. - For purposes of this Act, the following terms shall
mean:

a. Joint Venture Agreement (JVA): A contractual arrangement between a
local water district (LWD) and a private entity for the operation, repair,
development, and construction of water infrastructure, maintenance of
supply and septic management, and collection of service fees;

b. Local Water District (LWD): A government-owned and controlled
corporation (GOCC) created under Presidential Decree No. 198,
responsible for water supply and distribution in provincial cities and
municipalities outside Metro Manila;

c. Non-Revenue Water (NRW): Water that has been produced and lost
before it reaches the customer, whether through real losses (leaks) or
apparent losses (theft or metering inaccuracies). A benchmark of 20%
or less indicates efficiency;

d. Onerous Contract| A contract that is excessively burdensome,
oppressive, or one-sided, particularly when its terms are so unjust that
they shock the conscience of the court, or when they contravene law,
morals, good customs, public order, or public policy;

e. Performance-Based Regulation: A regulatory approach that links tariffs
and contractual incentives/penalties to the achievement of pre-defined
service level standards and efficiency targets;

f. Public-Private Partnership (PPP) Code of the Philippines (RA 11966):
The governing law for PPP projects in the Philippines, providing a
framework for private sector participation in infrastructure and
development projects;

g. Swiss Challenge: A competitive process for unsolicited proposals where
third parties are invited to submit superior offers, with the original
proponent having the right to match the best proposal;

h. Successor Liability: The principle by which a new entity may be held
responsible for the obligations or liabilities of a previous entity,
particularly in cases of asset acquisition, merger, or change of


ownership, especially when there is continuity of business operations or
intent to evade obligations;

i. Water Service Provider (WSP): Any entity, public or private, providing
water supply, sewerage, or sanitation services.

CHAPTER 2
INSTITUTIONAL OVERSIGHT AND COORDINATION FOR JVAs.

SEC. 5. Rationalization of Oversight Bodies for Water Districts and JVAs. ~
(a) Establishment of a Unified JVA Oversight and Legal Team

There is hereby created a specialized JVA Oversight and Legal Team (JVA-
OLT) within the Local Water Utilities Administration (LWUA), which shall serve as the
primary body responsible for the comprehensive review, legal determination, and
strategic intervention in joint venture agreements (JVAs) and other private sector
participation contracts involving Local Water Districts (LWDs). This team shall be
‘composed of legal, financial, engineering, and public administration experts, and shall
directly address the historical fragmentation, overlaps, and inadequacy in oversight
functions of various agencies concerning LWD JVAs.

To ensure effective and coordinated oversight, the JVA-OLT shall, at the
minimum, require relevant government agencies, including the Commission on Audit
(CoA), National Water Resources Board (NWRB), Governance Commission for
GOCCs (GCG), Anti-Red Tape Authority (ARTA), and the Public-Private Partnership
(PPP) Center, to:

i. Information Gathering and Assembly: Systematically gather and
assemble comprehensive information on the investment plans, actual
service levels, compliance with contractual procedures, and reporting
requirements of all LWDs and their JVA partners. This includes data on
Non-Revenue Water (NRW), service coverage, water quality, pressure,
and hours of supply, which are critical for performance evaluation and
public disclosure;

ii, Process Refinement and Capacity Building: Refine their own internal
processes for capacity building of LWDs, rigorous monitoring of
contractual covenants, strengthening of internal audit mechanisms, and
enhancing public disclosure of operations and performance. This also
‘extends to improving external auditing methodologies to identify and flag
irregularities more effectively;

iii, Elucidation of Implementing Rules and Regulations (IRRs): Elucidate
and, where necessary, amend their respective implementing rules and
regulations for existing laws, with a view to establishing clear, consistent,
and legally binding rules and norms. These refined IRRs shall serve as
the authoritative reference for LWUA's own regulatory engagement with


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water districts and their joint venture partners, thereby minimizing
ambiguities and conficts in interpretation and enforcement.

(b) Mandate of the JVA-OLT.
The JVA-OLT shall have the following specific mandates:

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vii.

Legitimacy and Nullity Determination: To conduct in-depth legal and
financial audits of existing JVAs to determine the legitimacy, validity, and
potential nullity of specific contractual provisions, particularly those
deemed onerous, disadvantageous to the government or the consuming
Public, or entered into without proper due diligence or competitive
bidding. This includes scrutinizing the basis of revenue-sharing
schemes, cost recovery mechanisms, and the absence of adequate
penalty clauses;

Procurement Procedure Review: To review the procurement procedures
followed for existing JVAs, especially those initiated through unsolicited
proposals (e.g., Swiss Challenge), to determine if proper bid parameters,
price, and performance metrics were adequately defined at inception, or
if these were problematically determined ater, leading to
disadvantageous terms. The JVA-OLT shall recommend corrective
actions for such procedural deficiencies;

Coordination and Division of Labor: To serve as the central coordinating
body for all oversight activities related to LWD JVAs, ensuring a clear
division of labor and preventing forum shopping among agencies such
as the Commission on Audit (CoA), Local Water Utilities Administration
(LWUA), Governance Commission for GOCCs (GCG), Public-Private
Partnership (PPP) Center, National Water Resources Board (NWRB),
and Department of the Interior and Local Government (DILG). The JVA-
LT shall issue executive and administrative orders to clarify roles,
streamline processes, and mandate coordinated actions;

Assistance in Negotiations: To provide direct legal, financial, and
technical assistance to LWDs in their negotiations with private partners
for contract amendments, renegotiations, or pre-termination, ensuring
that LWDs are adequately represented and empowered;

Guidelines for Reviews: To establish and enforce comprehensive
guidelines for Sth-year tariff and Key Performance Indicator (KPI)
reviews for all JVAs, ensuring transparency, public disclosure, and strict
adherence to performance benchmarks;

Pre-termination and Legal Representation: To mandate and facilitate the
pre-termination of non-performing JVAs based on established grounds
of material breach or disadvantageous terms, and to provide legal
representation to LWDs in any related legal proceedings, including those
challenging restraining orders or injunctions;

Overruling OGCC Opinions: To establish a mechanism, through
executive and administrative orders, for the JVA-OLT, with the approval

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of the President, to overrule opinions from the Office of the Government
Corporate Counsel (OGCC) or other legal bodies that unduly restrict
LWDs' ability to act in the public interest regarding JVA legitimacy, nullity,
or termination, especially when such restrictions lead to continued public
detriment.

SEC. 6. Strengthening LWUA’s Role in JVA Oversight and Intervention. - The
Local Water Utilities Administration (LWUA) shall be specifically empowered and
adequately resourced to act as the primary oversight and intervention agency for
LWDs conceming their JVAs. LWUA shall conduct regular, in-depth performance
audits of all LWDs with JVAs, focusing on service delivery, financial viability, and
compliance with contractual obligations, and shall report findings directly to the JVA-
COLT. LWA shall have clear authority to recommend and, if necessary, implement the
takeover of mismanaged or non-performing LWDs or their JVA-related operations, as
provided under Article V of PD 198, without undue delay, especially when public health
and welfare are at risk.

SEC. 7. Role of the PPP Center in JVA Procurement and Monitoring. — The
PPP Center shall develop and enforce stricter guidelines for the evaluation and
approval of unsolicited proposals for water supply and sanitation projects, particularly
those involving LWDs. These guidelines shall mandate the clear definition of bid
parameters, technical specifications, and measurable performance indicators (e.g.,
NRW reduction targets, service coverage expansion, water quality standards) from the
initial stages of proposal submission, ensuring that price and performance metrics are
not left to be determined later in negotiations. The PPP Center shall also enhance its
monitoring of JVA implementation, with a focus on contract compliance and public
interest protection, and shall share all relevant data with the JVA-OLT.

SEC. 8. Role of COA, GCG, NWRB, and DILG in JVA Accountability. —
a. Commission on Audit (CoA): CoA shall continue its mandate of auditing
LWDs and their JVAs, with a specific focus on identifying and reporting
instances of overpricing, unjustified revenue sharing, non-compliance
with investment commitments, and procurement irregularities. CoA
reports shall serve as primary evidence for the JVA-OLT's legitimacy and

nullity determinations;

b. Governance Commission for GOCCs (GCG): GCG shall integrate JVA
performance and compliance with this Act into its performance
evaluation scorecards for LWDs and their boards, ensuring that good
governance principles are applied to private partnerships. GCG shall
also vet LWD board nominees for competence in JVA oversight and
management;

c. National Water Resources Board (NWRB): NWRB shall collaborate with
the JVA-OLT and LWUA to ensure that water permits, tariff grants, and
corresponding resource allocations for investments and operations for

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JVA projects are consistent with service delivery targets and sustainable
water management, and shall provide data on water resource availability
and usage to support JVA performance assessments.

d. Department of the Interior and Local Government (DILG): DILG shall
assist LGUs in understanding their oversight roles concerning LWDs and
their JVAs, and shall facilitate LGU and community participation in
monitoring JVA performance and advocating for service improvements.
The DILG shall also advise LGUs on their role as potential investors in
water districts, even with the presence of a JVA.

CHAPTER 3
FACILITATING REFORM AND STRENGTHENING IMMEDIATE AND
MEDIUM-TERM SERVICE PROVISION ARRANGEMENTS.

SEC. 9. Primacy of Public Service and Capacity Restoration. — In the event of
extended legal disputes, non-performance, or marked deterioration of services under
existing Joint Venture Agreements (JVAs), this Act declares the immediate restoration
and expansion of water and sanitation services to the public as paramount. Where
there is a conflict between private contractual interests and the public's right to
essential water services, the latter shall take primacy. Recognizing the vastly atrophied
capacities of many Local Water Districts (LWDs) resulting from the reduction and
retirement of their personnel, and the near-complete handing over of revenue
collection, capital investment, and operational roles to private JVA partners, this Act
mandates the immediate reinstatement and strengthening of LWD capacities. This
includes the formalization of collaborations with local governments (LGUs), nearby
water districts, community water service providers (e.g., cooperatives, homeowners
associations), investors, and other private water operators to ensure continuous and
improved service delivery.

SEC. 10. LWUA Intervention in Deteriorating Water Districts. - The Local Water
Utilities Administration (LWUA) or its duly authorized agents shall be empowered to
replace members of the Board of Directors of a Local Water District (LWD) upon the
recommendation of the local chief executive. LUA may perform these functions even
when a water district is not in default of its financial obligations, provided that LWUA
determines, based on objective and verifiable criteria, that there is a marked,
precipitous, and possibly irreversible deterioration of the services, assets, and financial
capacities of the water district. This determination shall be made after due
investigation and consultation with relevant stakeholders, ensuring due process for the
affected board members.

SEC. 11. Catch-Up Plans and Contractual Re-Legitimization. ~ Joint Venture
(JV) partners and Local Water Districts (LWDs) may pursue the formalization of “catch-
up plans” as an approach to address past service deficiencies and investment gaps.
However, the formalization of such catch-up plans shall be deemed as conclusive

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evidence of past failure to execute and finance on investment and service-level
improvement commitments as stipulated in the original JVA. Such formalization shall
not be construed as a waiver by the water district of its rights to demand payment
refunds, impose penalties, effect forfeiture of performance bonds, or initiate entry into
new joint venture arrangements that may reduce the role of incumbent,
underperforming private joint venture partners. Nevertheless, it is hereby declared that
a drastic and sustained improvement in the performance of private joint venture
partners, coupled with full compensation to the water district and its customers for past
service delivery gaps and financial losses, can, after the initial five years of the JVA,
put the 25-year joint venture agreement on a fresh, legitimate footing, subject to the
review and approval of the JVA-OLT. Moving forward, the LWUA and the PPP Center
shall jointly determine the need to classify existing and future joint venture agreements
as concession agreements that, among other things, will require the private joint
venture partners (similar to those in Metro Manila) to secure congressional franchises,
thereby subjecting them to a higher level of public accountability and legislative
oversight.

CHAPTER 4
CONTRACTUAL REFORMS AND TRANSPARENCY FOR JVAs-

SEC. 12. Mandatory Review and Revision of Onerous JVAs. —
(a) Comprehensive Review of Existing JVAs.

Within one (1) year from the effectivity of this Act, the JVA-OLT shall conduct a
mandatory, comprehensive review of all existing joint venture agreements (JVAs)
between local water districts and private water service providers. This review shall
specifically identify provisions that are onerous, disadvantageous to the government
or the consuming public, or have led to persistent service failures and non-compliance
with contractual obligations, including but not limited to: overpricing of capital
expenditures (CAPEX), unjustified revenue-sharing schemes, inadequate penalty
clauses for non-performance, failure to meet investment and service delivery targets
(e.g., water production, service coverage, water quality, NRW reduction), and non-
provision of mandated services like septage management.

(b) Grounds for JVA Revision or Termination.
‘A JVA may be revised or terminated if the review determines that:

i. There is a material breach of contract, including persistent failure to meet
performance standards (e.g., water production targets, service
coverage, water quality, NRW benchmarks);

ji, The contract contains provisions that are manifestly and grossly
disadvantageous to the government or the public interest, such as those
allowing excessive cost recovery, prohibiting government interference in
Tegulatory functions, or lacking proper basis for revenue sharing;


ili, The private concessionaire or JV partner has failed to provide sufficient
funds or investment for service improvement as stipulated in the
agreement;

iv. The contract was entered into without proper competitive bidding or due
diligence, or involved unlawful acts or procedural irregularities (e.g.,
problematic unsolicited proposals where bid parameters were not clearly
defined at inception); or

v. The contract's terms have become so difficult or manifestly inequitable
due to unforeseen supervening developments, justifying judicial
readjustment or termination

(c) Legal Mechanisms for Revision and Termination ("Use It or Lose It")

The JVA-OLT shall have the authority to initiate renegotiation of onerous JVAS.
If renegotiation fails, the JVA-OLT shall recommend to the President the termination
of such contracts, adhering to principles of due process and existing laws on contract
termination for default, convenience, or untawful acts. The goverment's ability to
terminate contracts without prior court approval, particularly when provisions are
deemed disadvantageous or irregular, has been affirmed. This Act explicitly grants the
JVA-OLT and relevant goverment agencies the power to pursue all legal avenues,
including judicial action, to restore public control over water services where private
performance has failed, embodying a "use it or lose it" attitude towards non-performing
private partners,

SEC. 13. Enhanced JVA Transparency and Disclosure. ~
(a) Public Disclosure of JVA Contracts.

All new and existing joint venture agreements (JVAs) for water supply,
sewerage, and sanitation services shall be made publicly accessible through the
official websites of LWUA, PPP Center, and relevant LWDs. This disclosure shall
include, but not be limited to, full contract terms, financial provisions (e.g., tariffs,
revenue sharing, investment commitments), detailed performance indicators, and
audit reports.

(b) Standardized Reporting and Performance Indicators.

The JVA-OLT, in coordination with LWUA and NWRB, shall develop and
enforce a standardized framework for performance measurement and disclosure for
all water service providers operating under JVAs. This framework shall include key
performance indicators (KPIs) such as Non-Revenue Water (NRW), service coverage,
water quality, pressure, hours of supply, and customer satisfaction, with clear targets
and penalties for non-compliance. All LWDs and their private JVA partners shall be
required to submit regular, independently verified performance reports to the JVA-
OLT, which shall be publicly disclosed. This directly addresses past failures in
performance measurement and disclosure by water districts and concessionaires,
consistently flagged by CoA


SEC. 14. Prohibition of Unsolicited Proposals for Core Water Services. -

Unsolicited proposals for new water supply, sewerage, and sanitation projects
that fall under the core public utility mandate of LWDs shall be prohibited, unless they
demonstrably introduce truly innovative technologies or solutions not otherwise
available through solicited processes. All new projects for core water services shall
undergo competitive public bidding, ensuring transparency, fairness, and optimal
value for money from inception, with clearly defined bid parameters and performance
metrics. Any exceptional unsolicited proposal shall be subject to a rigorous Swiss
Challenge process with strict oversight by the JVA-OLT and PPP Center, ensuring that
the public interest is paramount and that all terms, including price and performance,
are competitively determined from the outset.

CHAPTER 5
ENABLING LWD, LGU, AND COMMUNITY INVESTMENTS.

SEC. 15. Immediate Service Improvement During Contract Disputes. -

Recognizing the severe and immediate nature of water service deficiencies,
this Act shall establish mechanisms to enable Local Water Districts (LWDs), Local
Government Units (LGUs), and community water systems (e.g. cooperatives,
homeowners associations) to undertake service-level improvements, including
rudimentary but promising initiatives, even while JVA pre-termination or contract
renegotiation processes are ongoing.

(a) Emergency Funding and Technical Assistance.

The LWUA, in coordination with the DILG and the JVA-OLT, shall establish a
dedicated emergency fund and technical assistance program to support LWDs and
LGUs in implementing collaborations for immediate service improvements in areas
affected by non-performing JVAs. This fund shall be accessible without undue
bureaucratic delays, recognizing the critical need for continuous water supply.
Technical assistance shall include rapid assessment of infrastructure needs,
engineering support, and operational guidance to ensure continuity of service.

(b) Empowering LGU and Community Co-Design and Co-Financing.

LGUs shall be formally empowered to co-design and co-finance service-level
improvements, including those that are rudimentary at the start but promising
sustained improvements, in coordination with LWDs and affected communities (e.g.,
cooperatives, homeowners associations). This shail include:

i. Formal Integration of Community-LGU Financing: The support for
community-LGU co-financing shall be formally made a part of the
obligation of water districts towards their unserved constituencies,
especially during but not limited to periods of JVA transition or failure;

ii. Minimum Design Templates for Citizens’ Charters: The DILG, in
consultation with LWUA and the JVA-OLT, shall issue minimum design
templates for LWD Citizens’ Charters, requiring the formal inclusion of

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provisions for community involvement in service improvement planning,
grievance redress, and co-financing mechanisms. These templates shall
ensure transparency in LWD operations and foster active participation
from unserved constituencies; and

ili, Facilitating Access to Funds: Mechanisms shall be established to
facilitate LGU and community access to national government funds,
concessional loans, and blended finance for water supply and sanitation
projects, especially in areas where JVAs are under review or being
terminated.

CHAPTER 6
ACCOUNTABILITY AND ENFORCEMENT FOR JVA FAILURE

SEC. 16. Accountability of Public Officials in JVA Formulation and Oversight. —
(a) Strict Accountability for Public Trust.

Public officials and employees involved in the formulation, negotiation,
approval, and oversight of joint venture agreements (JVAs) in the water sector,
including those in LWDs, LWUA, PPP Center, GCG, NWRB, DILG, and other relevant
agencies, shall be held to the highest standards of accountability, integrity,
competence, and loyalty, upholding public interest over personal interest at all times.
They shall be civilly, criminally, and administratively liable for any acts or omissions
that cause injury, loss, or damage to the public or the government, particularly in
relation to disadvantageous contracts, graft, corruption, gross negligence, or manifest
partiality in the performance of their duties related to JVAs.

(b) Enhanced Oversight and Penalties.

The Office of the Ombudsman, the Commission on Audit (CoA), and other
relevant oversight bodies shall be strengthened to investigate and prosecute cases of
malfeasance, misfeasance, and nonfeasance by public officers in the water sector,
specifically concerning JVA irregularities. Penalties shall be commensurate with the
gravity of the offense, including imprisonment, fines, forfeiture of il-gotten wealth, and
perpetual disqualification from public office.

SEC. 17. Corporate Accountability and Successor Liability for Private JVA
Partners. —

(a) Corporate, Criminal, and Civil Liability.

Private water service providers, including concessionaires and joint venture
partners, shall be held criminally and civilly liable for violations of this Act, other
relevant laws, and the terms of their JVAs. Penalties shall extend to responsible
corporate officers and directors who assent to patently unlawful acts, are guilty of
gross negligence or bad faith in directing the affairs of the corporation, or acquire
personal or pecuniary interest in conflict with the corporation's interests, leading to
damages to the public or the government.

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(b) Successor Liability for Onerous Contracts.

In cases of changes in private sector ownership of a JVA partner, including
mergers, acquisitions, or asset transfers, the successor entity shall be held liable for
the existing obligations, liabilities, and judgments against the predecessor entity,
particularly those arising from onerous contracts, service failures, or procurement
imregularities related to the JVA. This principle of successor liability shall apply where
there is continuity of business operations, workforce, or facilities, or where there is
evidence of intent to evade obligations. Due diligence requirements for acquiring
entities shall be enhanced to identify and account for all potential JVA-related
liabilities. The PPP Code of the Philippines already emphasizes that PPP borrowers
remain responsible for their obligations regardless of ownership changes, a principle
reinforced and expanded by this Act for JVAs.

SEC. 18. Penalties and Sanctions. — Any person, public official, or private entity
found in violation of the provisions of this Act related to JVAs shall be subject to severe
civil, criminal, and administrative penalties, including fines, imprisonment, forfeiture of
property, and revocation of licenses or franchises, as determined by the appropriate
courts or regulatory bodies.

CHAPTER 7
FINAL PROVISIONS:

SEC. 19. Implementing Rules and Regulations. - Within one hundred twenty
(120) days from the effectivity of this Act, the Local Water Utilities Administration
(LWUA), through the JVA Oversight and Legal Team (JVA-OLT), in consultation with
relevant government agencies (PPP Center, GCG, NWRB, DILG, CoA), focal
government units, civil society organizations, and private sector stakeholders, shall
promulgate the necessary rules and regulations for the effective implementation of this,
Act, specifically focusing on the detailed procedures for JVA review, renegotiation,
termination, and accountability.

SEC. 20. Separability Clause. — If any provision or part of this Act is declared
invalid or unconstitutional, the remaining provisions or parts not affected thereby shall
continue to be in full force and effect.

SEC. 21. Repealing Clause. - All laws, executive orders, presidential decrees,
presidential proclamations, letters of instruction, rules and regulations, or parts thereof
inconsistent with the provisions of this Act are hereby repealed, modified, or amended
accordingly.

SEC. 22. Effectivity. - This Act shall take effect fifteen (15) days following its
publication in the Official Gazette or in two (2) newspapers of general circulation in the
Philippines.


Approved,

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