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Republic of the Philippines 
House of Representatives 
Quezon City, Metro Manila 
Twentieth Congress 
First Regular Session 
HOUSE BILL NO. 1901 
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 
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 
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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. 
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;


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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 light of the preceding, this bill’s approval is fervently sought. 
LORDAN G. SUAN 
Cagayan de Oro City – 1st District 


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Republic of the Philippines 
House of Representatives 
Quezon City, Metro Manila 
Twentieth Congress 
First Regular Session 
HOUSE BILL NO. 1901 
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 House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Short Title. — This Act shall be known as the “Water Service 
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Cooperatives Development Act”. 
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SEC. 2. Declaration of Policy. – The State recognizes the important role of 
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water service cooperatives in providing safe and affordable water supply 
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services, especially in unserved or underserved areas, and as an instrument for 
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economic development, social justice and equity. Towards this end, the State 
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shall promote the growth, development and expansion of water service 
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cooperatives, provide resources and support mechanisms to strengthen their 
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movement, enable policies and programs and ensure the provision of technical 
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guidance, financial assistance and other services to transform water service 
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cooperative as a viable, responsive, and resilient economic enterprise, and 
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facilitate partnerships with other national and local stakeholders.. 
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SEC. 3. Coverage. – This Act shall cover water service cooperatives and 
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multi-purpose cooperatives with water service operations.  However, the 
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benefits of multi-purpose cooperatives under this Act are limited to their water 
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service operations. 
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SEC. 4. Local Water Service Cooperatives Development Fund. - The Local 
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Water Service Cooperatives Development Fund, hereinafter referred to as the 
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“Fund,” is established in provinces, cities and municipalities to support water 
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service cooperatives development in their jurisdiction.   
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The provinces, cities and municipalities shall appropriate in their annual 
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budget at least two percent (2%) of the National Tax Allotment (NTA), which 
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shall comprise the Fund, for local water service cooperatives development: 
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Provided, That cities and municipalities with existing and sufficient potable 
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water supply in their jurisdiction may opt not to appropriate and set up the 
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Fund: Provided further, That provinces shall set up the Fund and be responsible 
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for the municipalities belonging to fourth to sixth income classification under 
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their jurisdiction: Provided finally, That municipalities belonging to fourth to 
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sixth income classification shall commit to progressively realize this mandate. 
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SEC. 5. Use of Funds. – The provinces, cities and municipalities may use the 
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Fund as follows:  
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a) Formulation and implementation of development plan and special 
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programs for water service cooperatives;  
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b) Provision of technical guidance, financial assistance and other 
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support services to water service cooperatives;  
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c) Promotion and mobilization of water service cooperatives as a viable 
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and responsive social and economic enterprise;  
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d) Organization of water service cooperatives, especially in unserved or 
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underserved areas;  
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e) Provision of capacity development and capacity-building initiatives 
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and activities for water service cooperatives;  
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f) Identification of groups, sectors or communities that may be 
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organized into water service cooperative, which shall serve as a 
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vehicle in providing access to safe and affordable water, especially in 
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unserved or underserved areas, job creation and socio-economic 
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development of the city or municipality; and 
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g) Support the plans, programs, and activities of the water service 
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cooperatives in ensuring safe and affordable water supply services 
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and providing access to such services. 
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SEC.6. Incentives and Privileges. – Duly registered water service 
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cooperatives are entitled to the same tax treatment, exemptions and privileges, 
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as may be applicable, under Sections 60, 61 and 62 of Republic Act (RA) No. 
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6938, otherwise known as the “Philippine Cooperative Code of 2008,” as 
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amended by RA 9520.  In addition, water service cooperatives are exempted 
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from customs, duties and taxes on imported equipment, machineries and other 
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materials which are directly used for the provision of water supply services. 
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SEC. 7. Capital Infusion. — The provinces, cities or municipalities, as the 
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case may be, shall provide capital infusion to newly organized or existing water 
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service cooperatives in the form of subsidies, donations or grants, which shall be 
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sourced from the Fund, to support their operations and improve their 
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infrastructure.  
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Likewise, all public or private lending institutions shall give priority to water 
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service cooperatives and extend loans with minimum required collaterals, 
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especially to newly formed cooperatives in unserved or underserved areas and 
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those with limited access to credit and financing. 
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SEC. 8. Duties and Responsibilities of Agencies. — The Cooperative 
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Development Authority, National Water Resources Board and concerned local 
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government units (LGUs) shall perform the following:  
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a) Call on other government agencies, civil society organizations, or 
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sectors, as may be necessary, to assist in the establishment and 
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organization of water service cooperatives, particularly in unserved 
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or underserved areas;  
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b) Identify the areas where there is no existing water supply service or 
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where the existing water supply service is inadequate or insufficient;  
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c) Provide technical, financial and other support services to ensure the 
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smooth operation of water service cooperatives and the delivery of 
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their services to members and non-members; 
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d) Provide capacity building and training sessions to advance the 
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competitiveness and innovativeness of the industry;  
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e) Grant preferential rights and privileges to water service cooperatives, 
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including the grant of franchises and permits, lease of public utilities 
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and access to facilities related to water service activities; and 
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f) Assist and support water service cooperatives in ensuring universal 
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access to water for minimum daily basic needs to support a healthy, 
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clean, and productive life. 
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SEC. 9. Joint Congressional Oversight. — The Joint Congressional Oversight 
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Committee on Cooperatives created under Article 138 of RA 6938, as amended, 
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shall review and monitor the implementation of this Act. 
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SEC. 10. Implementing Rules and Regulations. — Within sixty (60) days from 
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the effectivity of this Act, the Secretaries of the Interior and Local Government 
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and Environment and Natural Resources shall, in consultation with the 
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Chairperson of Cooperative Development Authority, Executive Director of the 
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National Water Resources Board and Governor of the Bangko Sentral ng 
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Pilipinas, promulgate the necessary rules and regulations for the effective 
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implementation of this Act. 
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SEC. 11. Repealing Clause. — All laws, executive orders, issuances, rules and 
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regulations, or parts hereof inconsistent with the provisions of this Act are 
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repealed or modified accordingly. 
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SEC. 12. Effectivity. — This Act shall take effect fifteen (15) days after its 
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publication in the Official Gazette or in a newspaper of general circulation. 
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Approved,