Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Constitution Hills, Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL No. _________ 
Introduced by REPRESENTATIVE LORDAN G. SUAN 
EXPLANATORY NOTE 
This bill seeks to strengthen water service cooperatives, establishing for the purpose 
water service cooperatives development fund and providing support programs for its growth 
and development.  
Water is a basic human need for hydration, food production and sanitation and a critical 
resource for sustainable development According to the United Nations, universal access to clean 
water is a fundamental human right and an essential step toward improving living standards 
worldwide. Communities sourcing water from poor quality sources, those unable to access 
sufficient potable water, and those using unimproved household water systems are some of the 
characteristics of “waterless” communities. Water-poor communities are typically economically 
poor as well.  
In the Philippines, there is a need to ensure the availability and accessibility of clean and 
safe water. Water service providers in the country include water districts, local government unit 
facilities, rural water supply associations, barangay water supply associations, cooperatives and 
private firms. Among all types of water service providers, water service cooperatives have been 
recognized as a viable means of providing affordable and sustainable water supply services, 
especially in unserved and underserved areas. 
A water service cooperative is a special type of service cooperative. Under Article 23 (s) 
of Republic Act (RA) No. 6938, otherwise known as the “Philippine Cooperative Code of 2008,” as 
amended by RA 9520, water service cooperative is one that is organized to own, operate and 
manage water systems for the provision and distribution of potable water for its members and 
their households. 
This bill, known as the "Water Service Cooperative Development Act," recognizes the 
importance of water service cooperatives in providing safe and affordable water supply 
services, particularly in underserved and unserved areas. It aims to promote the development 
and sustainability of water service cooperatives in the entire country. For this purpose, this bill 
seeks to establish a Local Water Service Cooperatives Development Fund and authorize local 
government units to appropriate at least two percent (2%) of their National Tax Allotment 
(NTA) for programs, projects and activities for local water service cooperatives development.  
The bill also recognizes the incentives and privileges for water service cooperatives 
provided under Sections 60, 61 and 62 of RA 6938, as amended. Further, the bill mandates the 
provinces, cities or municipalities to provide a capital infusion in the form of subsidies, 
donations or grants to water service cooperatives to support their operations and improve their 
infrastructure. Furthermore, all public or private lending institutions shall give priority to water 
service cooperatives and extend loans with minimum required collaterals, especially to newly 
formed cooperatives in underserved and unserved areas and those with limited access to credit 
and financing. 
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Likewise, the bill provides the responsibilities of the Cooperative Development 
Authority, National Water Resources Board and local government units such as: 
a. Establishment and organization of water service cooperatives;
b. Identification of areas where there is no existing water supply service or where the
existing water supply service is inadequate or insufficient; 
c. Provision of technical support to local water service cooperatives in the form of
treatment and sanitation of water and the operation of water supply system; 
d. Capacity building and training sessions to advance the competitiveness and
innovativeness of the industry; 
e. Grant of preferential rights and privileges to water service cooperatives and
f. Assist water service cooperatives to ensure universal access to water for minimum
daily basic needs to support a healthy, clean, and productive life.  
This proposed measure will not only ensure access to water in unserved and 
underserved areas and ensure the sustainability of water service cooperatives but will also 
strengthen and ensure competitiveness and viability  of the water service cooperative sector as 
responsive economic enterprises and a tool to improve the social and economic conditions of its 
members.  
In view of the foregoing, the immediate passage of this bill is earnestly sought. 
HON. LORDAN G. SUAN 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Constitution Hills, Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL No. _________ 
Introduced by REPRESENTATIVE LORDAN G. SUAN 
AN ACT 
STRENGTHENING THE WATER SERVICE COOPERATIVES, ESTABLISHING FOR THE 
PURPOSE THE LOCAL WATER SERVICE COOPERATIVES DEVELOPMENT FUND AND 
PROVIDING SUPPORT PROGRAMS FOR ITS GROWTH AND DEVELOPMENT 
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Short Title. – This Act shall be known as the “Water Service Cooperatives 
Development Act.” 
SEC. 2.  Declaration of Policy. – The State recognizes the important role of water service 
cooperatives in providing safe and affordable water supply services, especially in unserved or 
underserved areas, and as an instrument for economic development, social justice and equity. 
Towards this end, the State shall promote the growth, development and expansion of water 
service cooperatives, provide resources and support mechanisms to strengthen their 
movement, enable policies and programs and ensure the provision of technical guidance, 
financial assistance and other services to transform water service cooperative as a viable, 
responsive, and resilient economic enterprise, and facilitate partnerships with other national 
and local stakeholders.  
SEC. 3.  Coverage. – This Act shall cover water service cooperatives and multi-purpose 
cooperatives with water service operations.  However, the benefits of multi-purpose 
cooperatives under this Act are limited to their water service operations. 
SEC. 4. Local Water Service Cooperatives Development Fund. –The Local Water 
Service Cooperatives Development Fund, hereinafter referred to as the “Fund,” is established in 
provinces, cities and municipalities to support water service cooperatives development in their 
jurisdiction.   
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The provinces, cities and municipalities shall appropriate in their annual budget at least 
two percent (2%) of the National Tax Allotment (NTA), which shall comprise the Fund, for local 
water service cooperatives development: Provided, That cities and municipalities with existing 
and sufficient potable water supply in their jurisdiction may opt not to appropriate and set up 
the Fund: Provided further, That provinces shall set up the Fund and be responsible for the 
municipalities belonging to fourth to sixth income classification under their jurisdiction: 
Provided finally, That municipalities belonging to fourth to sixth income classification shall 
commit to progressively realize this mandate.  
 SEC. 5. Use of Funds. – The provinces, cities and municipalities may use the Fund as 
follows:  
a. Formulation and implementation of development plan and special programs for water 
service cooperatives;  
b. Provision of technical guidance, financial assistance and other support services to 
water service cooperatives;  
c. Promotion and mobilization of water service cooperatives as a viable and responsive 
social and economic enterprise;  
d.  Organization of water service cooperatives, especially in unserved or underserved 
areas;  
e. Provision of capacity development and capacity-building initiatives and activities for 
water service cooperatives;  
f. Identification of groups, sectors or communities that may be organized into water 
service cooperative, which shall serve as a vehicle in providing access to safe and affordable 
water, especially in unserved or underserved areas, job creation and socio-economic 
development of the city or municipality; and 
g. Support the plans, programs, and activities of the water service cooperatives in 
ensuring safe and affordable water supply services and providing access to such services.  
SEC. 6. Incentives and Privileges. – Duly registered water service cooperatives are 
entitled to the same tax treatment, exemptions and privileges, as may be applicable, under 
Sections 60, 61 and 62 of Republic Act (RA) No. 6938, otherwise known as the “Philippine 


Cooperative Code of 2008,” as amended by RA 9520.  In addition, water service cooperatives are 
exempted from customs, duties and taxes on imported equipment, machineries and other 
materials which are directly used for the provision of water supply services. 
SEC. 7. Capital Infusion. – The provinces, cities or municipalities, as the case may be, 
shall provide capital infusion to newly organized or existing water service cooperatives in the 
form of subsidies, donations or grants, which shall be sourced from the Fund, to support their 
operations and improve their infrastructure.  
Likewise, all public or private lending institutions shall give priority to water service 
cooperatives and extend loans with minimum required collaterals, especially to newly formed 
cooperatives in unserved or underserved areas and those with limited access to credit and 
financing.  
SEC. 8. Duties and Responsibilities of Agencies. –The Cooperative Development 
Authority, National Water Resources Board and concerned local government units (LGUs) shall 
perform the following:  
a. Call on other government agencies, civil society organizations, or sectors, as may be 
necessary, to assist in the establishment and organization of water service cooperatives, 
particularly in unserved or underserved areas;  
b. Identify the areas where there is no existing water supply service or where the 
existing water supply service is inadequate or insufficient;  
c. Provide technical, financial and other support services to ensure the smooth operation 
of water service cooperatives and the delivery of their services to members and non-members; 
d. Provide capacity building and training sessions to advance the competitiveness and 
innovativeness of the industry;  
e. Grant preferential rights and privileges to water service cooperatives, including the 
grant of franchises and permits, lease of public utilities and access to facilities related to water 
service activities; and 
f. Assist and support water service cooperatives in ensuring universal access to water 
for minimum daily basic needs to support a healthy, clean, and productive life.  


SEC. 9. Joint Congressional Oversight. – The Joint Congressional Oversight Committee 
on Cooperatives created under Article 138 of RA 6938, as amended, shall review and monitor 
the implementation of this Act.  
SEC. 10.  Implementing Rules and Regulations. – Within sixty (60) days from the 
effectivity of this Act, the Secretaries of the Interior and Local Government and Environment 
and Natural Resources shall, in consultation with the Chairperson of Cooperative Development 
Authority, Executive Director of the National Water Resources Board and Governor of the 
Bangko Sentral ng Pilipinas, promulgate the necessary rules and regulations for the effective 
implementation of this Act.  
SEC. 11.  Repealing Clause. – All laws, executive orders, issuances, rules and regulations, 
or parts hereof inconsistent with the provisions of this Act are repealed or modified accordingly. 
 
SEC. 12.  Effectivity. – This Act shall take effect fifteen (15) days after its publication in 
the Official Gazette or in a newspaper of general circulation. 
Approved,