Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL No3 144

Introduced by HON. LINABELLE RUTH R. VILLARICA
4" DISTRICT, BULACAN

AN ACT
ESTABLISHING THE NATIONAL FRAMEWORK FOR WATER RESOURCE
MANAGEMENT AND CREATING THE DEPARTMENT OF WATER RESOURCES AND
THE WATER REGULATORY COMMISSION, DEFINING THEIR MANDATES, POWERS
AND FUNCTIONS, AND APPROPRIATING FUNDS THEREFOR

EXPLANATORY NOTE

It is imperative that the State provide a mechanism to facilitate the effective, efficient
and comprehensive use of water resources by the people. Water is a finite resource required for
different purposes. F1 Nito and climate change affecting the availability of water supply for
all must be addressed to prevent water shortages in some areas and extreme flooding in others.
With this mechanism in place, these nagging issues can be effectively addressed since the
Philippines is one of the countries that claim abundant water supply with its numerous water
bodies able to provide an annual renewable water resource of about 146 billion cubic meters,
98% of which originates from surface, and only 28% is being utilized.

Presently, however, while the National Water Resources Board (NWRB) under
Presidential Decree No. 424 as amended is mandated to manage water resources, control,
supervise and regulate the utilization, exploitation, development and protection of water
resources, it is ill-equipped to perform its functions. On policy and program coordination, the
agency has difficulties in networking with all the agencies engaged in water-related programs.
‘The NWRB's data on water resource assessment has never been updated since 1980. It does
not have the capability on scientific modeling and computerized decision support systems that
will aid decision makers and planners in the optimal management of water resources.

Many of the agencies sharing the discharge of common functions of water management
may be complementary or sometimes conflict with the others with limited oversight and
coordination. This is may lead to a breakdown in the delivery of water, one of the many basic
services by the government.

Other agencies that directly share the discharge of water resources management are: the
Department of Environment and Natural Resources (DENR), through its line bureaus such as
the Environmental Management Bureau for water quality monitoring; the Mines and
Geosciences Bureau for hydrogeology and geohazard mapping; specialized office such as the


River Basin Control Office (RBCO) that plans for the development and management of the
river basins; and the Laguna Lake Development Authority (LLDA) that takes charge of the
regional water resources development and management of the Laguna Lake catchment area.
The Department of Health, through the Environmental Occupation and Health Office (EOHO)
is also involved in water management through drinking water, quality regulations and water
management. Implementing agencies of government-owned and controlled corporations
(GOCCs) and to a lesser extent by autonomous cooperatives and private entities in accordance
with their own interests and responsibilities undertake water services for certain sectoral uses
and purposes such as water supply and sanitation, irrigation, drainage, hydropower, flood
control and environmental protection.

This proposed bill seeks create the Department of Water Resources whose mandate
shall be to be the primary agency responsible for the comprehensive and integrated
identification and mapping of all water resources, planning, policy formulation, and
management of the ownership, appropriation, utilization, exploitation, development,
sustainability and protection of water resources in the Philippines except fisheries or
aquaculture. It also aims to adopt the Integrated Water Resource Management (IWRM) as the
basic framework for water resources management. The bill also aims to reconstitute the
National Water Resources Board as the National Water Resources Allocation Board which shall
supervise the effective appropriation and regulation of the water resources in the country in
accordance with Presidential Decree No. 1067.

This bill is an iteration of HB No. 9963, in substitution to the consolidated house
measures on the same subject matter, that was approved on Third and final Reading by the
House of Representatives during the 19” Congress and was transmitted to the Senate. The said
measure was acted upon by the Senate as Senate Bill No. 2771, where it remained pending on
Second Reading since 12 August 2024.

‘The approval of this bill is earnestly requested.

Sealai’

REP. LINABELLE RUTH R. VILLARICA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL No. 3144

Introduced by HON. LINABELLE RUTH R. VILLARICA
4" DISTRICT, BULACAN

AN ACT
ESTABLISHING THE NATIONAL FRAMEWORK FOR WATER RESOURCE
MANAGEMENT AND CREATING THE DEPARTMENT OF WATER RESOURCES AND
THE WATER REGULATORY COMMISSION, DEFINING THEIR MANDATES, POWERS
AND FUNCTIONS, AND APPROPRIATING FUNDS THEREFOR

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

CHAPTERI
GENERAL PROVISIONS

SECTION 1. Short Title. — This Act shall be known as the “National Water Resources
Act”.

SEC. 2. Declaration of Policy. - Access to water is a basic human right. All water
belongs to the State which shall govern its development and utilization for the people.

It is hereby declared the policy of the State to ensure the provision of safe, adequate,
affordable, and sustainable water supply and improved sanitation services, while maintaining
the protection, preservation, and revival of the quality of the country’s water resources and
ecological balance.

In pursuit of this policy, this Act shall have the principal objective of ensuring and
accelerating universal access to water supply and sanitation services, in a regulatory regime
that encourages responsible private sector participation, and shall foster and prioritize the
establishment of infrastructure and public works that adopt innovative solutions and
international best practices to address the challenges of climate change. Further, all water and
water treatment infrastructure projects are hereby declared as projects imbued with national
interest.

SEC. 3. Definition of Terms. — As used in this Act:

(a) Bulk water supplier refers to any entity, natural or juridical, whether public or
private, supplying or intending to supply large quantities of raw or treated water to buyers for


their own consumption, such as industrial companies, or for retail distribution to consumers
such as water service providers or real estate developers managing their own distribution
network.

(b) Environmental services refer to qualitative functions of natural non-produced
assets of land, water, and air, including related ecosystems, and their biota, and which may be
categorized into three basic types: (a) disposal services which reflect the functions of the
natural environment as an absorptive sink for residuals; (b) productive services which reflect
the economic functions of providing natural resource inputs and space for production and
consumption, and (c) consumer or consumption services which provide for physiological as
well as recreational and related needs of human beings.

(©) Flood Control refers to methods, acts, and protocols to be observed in order to
prevent and reduce the detrimental and catastrophic effects of flood waters which include
sediment-laden or turbid flows, and hyper-concentrated flows or debris flows.

(d) Flood Risk Management (FRM) refers to acts of defining and determining the
appropriate methods, acts, and protocols aimed at preventing and reducing the risk of loss of
both life and property due to flood waters. Flood risk management consists of a cycle of
prevention, mitigation, adaptation, preparedness and early warning, and response and recovery.
‘The elements of FRM include: integrating land-use planning and coastal zone management
into water management; adopting a holistic approach so that FRM is part of wider risk or multi-
hazard management of earthquakes, landslides, droughts, and storm surges; managing risk and
uncertainty as a whole so it not only mitigates hydrological uncertainties but also social,
economic and political uncertainties on account of human behavior and the cultural dimensions
of FRM.

(©) Gender Equality refers to the principle asserting the equality of men and women
and their right to enjoy equal conditions realizing their full human-potentials to contribute to
and benefit from the results of development, and with the State recognizing that all human
beings are free and equal in dignity and rights.

(f) Infrastructure and public works refer only to wholly ot primarily water-related
projects and does not include projects that do not fall within the purview of the objectives,
power and duties of the Department of Water Resources created under this Act.

(g) Integrated Water Resource Management (IWRM) refers to a systematic,
collaborative, and multi-stakeholder process which promotes the coordinated development and
management of water, land, and related resources within geophysical boundaries in order to
maximize the resultant economic and social welfare in an equitable manner, and without
compromising the sustainability of vital ecosystems.

(h) License refers to the Water Supply or Sanitation Services Operating License that
the Water Regulatory Commission is authorized to grant and issue to service providers.

(i) Licensee refers to a service provider to whom a license is granted o issued by
the Water Regulatory Commission.


() Missionary Water Services refer to water supply or services to areas that have
no existing safe water supply and services due to geographic limitation or absence of
economic and market viability.

(k) National Water Resources Management Plan (NWRMP) refers to a policy
document that contains a framework to guide the development and management of all the water
resources in the Philippines, the general strategies and work to be pursued to ensure the
sustainability of the resource towards water security, and top-level direction on the utilization
of existing water resources in line with national development plans, policies, and programs in
accordance with the [WRM framework. The NWRMP shall also include a water infrastructure
development program or all waters of the country as well as provide general guidance on how
this shall be supported within an integrated financing framework that can draw from public,
private, and international development funding sources.

0) Net Waste Load refers to the difference of the initial waste load of the abstracted
water and the waste load of the final effluent discharge of an industry.

(m) River basin refers to an area of land drained by a stream or body of fixed water
and its tributaries which have a common outlet for surface run-off.

(a) River Basin Organization (RBO) refers to a multi-stakeholder organization
which plan, coordinate, and monitor activities within a river basin cluster.

(0) Sanitation refers to the provision of facilities and services for the safe
management of human excreta and wastewater, from collection to containment, and storage
and treatment onsite or conveyance, treatment and eventual safe end use or disposal, and
includes the safe management of solid waste and animal waste.

(p) Sediment management refers to control of sediment erosion and deposition in
rivers, reservoirs, and coastal zones through non-structural and structural measures and control
works.

(q) Sustainable Development Goals (SDGs) also known as the 17 Global Goals
refer to the universal call to action to end poverty, protect the planet and ensure that all people
enjoy peace and prosperity by 2030 adopted by Member States of the United Nations in 2015.

(0) Septage is the liquid and solid material pumped from a septic tank, cesspool, or
other primary treatment source.

(8) Septage Management refers to the provision of proper collection, treatment, and
disposal of septage.

( Service Area refers to the area covered by the water distribution system,
sewerage or septage management services.

(u) Sewage refers to water borne human or animal wastes, excluding oil or oil
waste, removed from residences, buildings, institutions, and industrial and commercial
establishments together with such groundwater, surface water and storm water as may be


present including such waste from vessels, offshore structures, other receptacles intended to
receive or retain waste or other places or the combination thereof.

(v) Sewerage refers to any system or network of pipelines, ditches, channels or
conduits including pumping stations, lift stations and force mains, service connections
including other infrastructure, devices, or appliances appurtenant thereto, which include the
collection, transport, pumping and treatment of sewage to a point of disposal.

(w) Sewers refer to pipes or such other works or structures which are built and
constructed to carry, transport, and dispose sewage.

(x) Social inclusion refers to the process of improving the terms for marginalized
and
disadvantaged individuals, indigenous peoples, and similar groups to take part in society.

(y) Tariffs refer to amounts which may be charged by licensees for their water
supply and sanitation services based on principles, standards, and guidelines
established by the Water Regulatory Commission.

(2) Water Demand Management refers to any method, whether technical,
economic, administrative, financial, or social, that will accomplish one or more of the

following:

qd) Reduce the quantity or quality of water required to accomplish a specific
task;

2) Adjust the nature of the task or the way it is undertaken so that it can be
accomplished with less water or with lower quality water;

y of water as it flows from source,

(3) Reduce the loss in quantity or quali
through use, to disposal;

(4) Shift the timing of use from peak to off-peak periods; and

(3) Increase the ability of the water system to continue to serve society
during times when water is in short supply.

(aa) Water Districts refer to government-owned and controlled corporations,
organized under Presidential Decree (PD) No. 198, as amended, or the Local Water Utilities
Administration Law, created primarily to acquire, install, operate, maintain, and improve water
supply and distribution systems for domestic, industrial and municipal uses of residents and to
provide, maintain and operate waste water collection, treatment and disposal facilities within
the boundaries of the district.

(bb) Water pollution refers to any alteration of the physical, chemical, biological, or
radiological properties of a body of water resulting in the impairment of its purity or quality.


(cc) Water Resource refers to water under the ground or groundwater, water above
the ground such as surface water, run-off, floods, storm water and urban drainage, treated
wastewater, water in the atmosphere or rain water, and the waters of the sea within the territorial
jurisdiction of the Philippines.

(dd) Water resource allocation is the process of sharing the limited water resources
between competing users. This consists of (i) determining water availability, and (ii)
determining how the water should be shared among competing users. For the purposes of this,
Act, resource allocation shall also mean water resources allocation.

(ee) Water Resources Regions refer to the contiguous clusters of river basins which
are grouped together according to the hydrological boundaries, physiographic features, and
homogeneity in climate, whether or not they straddle different local government units, for
administrative purposes under the Department of Water Resources.

(ff) Water Service Provider (WSP) refers to the water district, any local government
unit (LGU)-run water utility, Barangay Waterworks and Sanitation Association, Rural
Waterworks Sanitation Association, cooperatives engaged in water service provision, or private
sector entity that provides water supply services to any given area.

(gg) Water supply service refers to any activity comprising Levels I, I] and III water
supply including bulk suppliers, suppliers to subdivisions, and other water service providers
(WSPS).

CHAPTER IL

‘THE DEPARTMENT OF WATER RESOURCES
SEC. 4. The Department of Water Resources. ~ There is hereby created and established
the Department of Water Resources, hereinafter referred to as the Department.

SEC. 5. Mandate of the Department. - The Department shall be the primary agency
responsible for the comprehensive and integrated identification and mapping of all water
resources, planning, policy formulation, and management of the ownership, appropriation,
utilization, exploitation, development, and protection of water resources in the Philippines to
ensure the optimal use thereof for domestic and municipal water supply, sanitation,
hydropower, industry, navigation, flood management, and recreation, and water utilization
aspects of fisheries or aquaculture.

The Department shall also be the primary agency responsible for the planning and
policy formulation towards the attainment of universal access to safe, adequate, affordable, and
sustainable water supply, and improved sanitation services for all Filipinos.

The Department shall be the primary national agency to enforce PD 1067, otherwise
known as The Water Code of the Philippines.

In the implementation of Republic Act (RA) No. 9275, otherwise known as the
Philippine Clean Water Act of 2004, the Department shall be responsible for preparing,
formulating and implementing a five-year plan of action for a national and a regional septage
management plan, which shall contain measures for the construction of wastewater treatment


facilities and provision, installation, operation and maintenance and, where practicable, the
integration of sewerage, septage management, storm water management and other sanitation
facilities. Compliance with the mandate to implement septage management services and
systems by any WSP pursuant to the Philippine Clean Water Act of 2004 shall be reckoned
within five (5) years from the date of promulgation or publication of the septage management
plan formulated by the Department.

SEC. 6. Guiding Principles. — In the pursuit of its mandate, the Department shall be
guided by the following key principles:

(a) The concept of good water governance for water security and sufficiency shall
be adopted across all levels of governance by stakeholders such as the national government,
local government units (LGUs), non-government organizations, private organizations,
individuals, global societal actors, and in various sectors such as water supply, irrigation,
fisheries, hydropower, navigation, ecosystem services, climate change. and recreation. It shall
entail publicly transparent, socially accountable, and multi-stakeholder participatory water
policy planning, management, and decision-making processes;

(b) Access to safe water supply and improved sanitation is a human right that needs
to be fulfilled and protected;

(c) Integrated Water Resource Management ([WRM) shall be adopted as the basic
framework which is the coordinated development and management of water, land, and related
resources within hydrological boundaries to optimize economic and social welfare without
compromising the sustainability of vital ecosystems. The [WRM Framework shall include an
enabling environment that utilizes proper policies, legal instruments, and institutional
frameworks for effective implementation, participatory and collaborative water policy and
management decisions, and management instruments for efficient use of updated and accurate
data, science-based decision support systems, proper information, education, communication
programs, assessment and allocation tools, or regulatory functions. It shall observe the mutual,
accountability mechanism among stakeholders at the national, regional, and global levels
reinforcing multi-stakeholder decision-making following a framework with specific,
measurable, attainable, relevant, and timely actions;

(4) Each river basin has its unique characteristics relating to the physical,
sociocultural, and other aspects, and water management shall be performed at river-basin level,
involving all the stakeholders at that particular river basin:

(e) Integrated and accurate data collection and analysis and the use of scientific
decision support systems shall be undertaken in water resources management including flood
modeling and warning systems that are essential for an effective, efficient, and sustainable
water resources management system:

(f) The State shall prioritize the development of surface water to ensure adequate
and reliable supply of water: Provided, That the development of water resources shall include
strategies for the mitigation of water-related hazards and climate change adaptation;


(g) Water resources shall be fairly and sustainably managed, and water services
shall be provided where they are intended and most needed;

(h) The proper operation and maintenance of waterworks systems resulting in the
uninterrupted and adequate supply and distribution of potable water for domestic and other
purposes, and the proper operation and maintenance of sewerage systems which are essential
services to public health and safety, are to be ensured at all times: and

(i) The State recognizes the role of the private sector and mobilization of private
resources in the development of waterworks systems through concession agreements, joint
venture agreements, bulk water supply agreements, management and service agreements and
other contracts for water supply provision, water sanitation and treatment services, and the
development, operation and maintenance of water supply and septage management systems.
The State shall encourage the private sector to provide the needed investments for programs
and projects to ensure adequate water supply and promote water security.

SEC. 7. Objectives of the Department. ~ The Department shall:

(a) Promote and adopt water demand management as a national policy to ensure
that water is optimized, that water efficiency and conservation become a way of life, that the
recycling and reuse of water and treated wastewater are widely practiced, that water is properly
priced to encourage efficient use and conservation, and that rainwater, flood waters, and run-
offs are captured or harvested, stored and treated for future use;

Prioritize and seek the immediate attainment of universal access to safe, adequate,
affordable and sustainable water supply and improved sanitation services for all Filipinos,
cither through public programs and projects or public-private partnership or other mechanisms,
in a manner consistent with the protection, preservation, and revival of the quality of the
country’s water resources, and to adopt all needed measures to advance the right of the people
toa balanced and healthful ecology in accord with the rhythm and harmony of nature: Provided,
That the Department shall pursue universal access to clean water by 2030;

(b) Strengthen and coordinate integrated water resources management planning and
policy making to ensure sustainable and fair allocation and efficient use of water resources
among competing uses and users;

(c) Ensure that integrated water resources management is strongly coordinated with
land use and coastal and multi-hazard planning and management:

(d) Develop sustainably, and manage water sources and water resources toward
water security, taking into consideration water, land, and related resources aimed at increasing
water dependability for different uses, optimizing economic benefits and social welfare without
compromising the sustainability of vital environmental systems;

(e) Strengthen and coordinate policy making and planning towards ensuring the
availability of water for food security and energy security, as well as towards the protection of
communities and environments against flood and other water induced hazards including
sediment hazards;


(f) Ensure that the strategy for water resources development and conservation is
participatory, and that planners, policymakers, and other stakeholders, including water users,
‘community members, indigenous and marginalized peoples, are involved at all levels;

(g) Develop a standardized pricing framework for water use, septage and sewerage
services that accounts for environmental externalities and pricing considerations such as
reasonable rate of return; rate adjustment mechanisms for consumer price indices and currency
fluctuations; and other factors relevant to the operation of waterworks systems and
infrastructure;

(h) Ensure thatall sources of water, including surface water, groundwater, rainwater
and floodwater are identified, mapped, monitored, conserved and managed for productive use
and the resulting wastewater is managed properly, reused, and responsibly disposed of
following approved environmental standards; and

(i) Prioritize and provide technical and financial assistance to fourth, fifth
and sixth class municipalities in the Philippines in the development of water resources
and waterworks systems and provision of water and sanitation services.

SEC. 8. Powers and Functions of the Department. ~The Department shall have the
following powers and functions:

I. Policymaking and Planning

(a) Ensure that Integrated Water Resources Management (IWRM) is adopted as the
strategic framework for water management policymaking and planning in the country and
coordinate the implementation, promotion, revision and enhancement of |WRM plans;

(b) Formulate policies, strategies, and targets in coordination with other relevant
entities to meet the goals and objectives for water supply and sanitation, water quality,
irrigation, hydropower, flood control, storm water utilization, and urban drainage. Such
policies shall, among other guidelines, integrate the issues of water and sanitation, food
security, energy, environment and flood control, and climate change:

(c) Formulate and develop policies to promote universal access to safe, adequate,
affordable, and sustainable water supply, and improved sanitation services for all Filipinos;

(4) Prepare the NWRMP in consultation with other agencies and stakeholders,
following the IWRM framework and integrating therein a national land use plan, submit the
NWRMP to the National Economic and Development Authority (NEDA) Board for approval
and eventual adoption, and regularly update, every five years or as deemed necessary by the
Department, in order to ensure its relevance to the times;

(e) Undertake river basin survey, inventory and appraisal of water and related
resources, and develop comprehensive basin-wide plans of storage, retardation, and control to
maximize conservation and multipurpose use of water in the basin;


(0) Conduct continuing hydrological and hydrometeorological surveys and studies
of the country’s renewable water supply, and establish, operate, and maintain observation
station networks;

(g) Formulate long-term policies to balance the sustainability and optimal multiple
use of water resources, define the hydrologic boundaries of basins of the existing water supply
sources, and develop or update existing River Basin Master or Comprehensive Plans which
includes all aspects of water management and development such as water supply and sanitation,
irrigation, flood control and storm water or urban drainage, drought risk management, water
resource development systems and other public water works projects, including phasing of
implementation;

(h) Identify, based on the river basin master plans, priority packages for water
infrastructure development per river basin, including water supply, sanitation, irrigation,
hydropower, flood control and storm water or urban drainage, drought risk management, water
resource development systems and other public works projects;

(i) Evaluate and appraise all regional and inter-regional infrastructure water
development plans and programs as to their feasibility and consistency with approved strategies
and medium and long-term plans;

() Formulate policy, strategies, master plans and programs on flood tisk
management in the context of integrated flood management (IFM) which integrates water, land,
coastal zone and multihazard management. In integrating land use planning and water
management, the Department shall harmonize and synthesize plans to enable the sharing of
information between land-use planning and water management authorities. In this regard, a
holistic approach shall be adopted by making the IFM a part of a wider risk or multi-hazard
management system that includes earthquakes, landslides, fires, tsunamis, droughts, and other
calamities of the same gravity or nature;

(k) Strengthen and coordinate policy making and planning for flood management,
integrated with storm water or urban drainage and appropriate retention or retarding basins in
order to harvest and reuse water, and to plan against, prevent, and minimize the detrimental
and catastrophic effects of flooding:

(1) Assist and provide the NEDA with the required data and input from the water
sector in the formulation of the country’s short-term and long-term strategic development plans
and actions, and recommend to the NEDA Board the adoption of general policies and
guidelines for water resources development;

(m) Review, approve, and provide oversight over all water-related development
plans, programs, and projects of any agency within the context of the NWRMP, and overall
national plans and programs;

(n) Develop and implement, in coordination with other relevant agencies, effective
codes, standards, benchmarks, and reasonable guidelines on project investigation, formulation
and planning of water resources infrastructure, to ensure the safety of all public and private


water structures in the country, and assure efficiency and proper quality in the construction of
water, sanitation, irrigation, hydropower, flood control and drainage infrastructure:

(0) Ensure that gender equality, social inclusion, environmental protection, climate
resiliency, disaster risk reduction, and indigenous knowledge systems and practices are
integrated into any water resource management planning, policy making, and the design and
construction of water infrastructure;

(p) Ensure that the planning of water infrastructure considers the highest efficiency
and most appropriate technology and quality, in accordance with national development
objectives:

(q) _ Review existing guidelines appropriate for private sector participation in the
water sector and submit recommendations to the Public-Private Partnership (PPP) Center of
NEDA and other concerned agencies to promote and enable more PPPs in the sector;

(r) Gather, analyze, and organize needed statistical data and information; for those
water-related data generated by other concerned agencies, establish, in coordination with these
agencies, the guidelines, standards. methodologies, and protocols for data collection that will
be officially recognized by the Department, and institute mechanisms for coordination with
other agencies as regards their submission and certification of submitted water-related data to
the Department;

(3) In case of gaps in data collection by other agencies, under item (r) above, the
Department may collect the said data in accordance with the established guidelines, standards,
methodologies and protocols, and in coordination with the respective agencies: Provided, That
both the Department and other agencies ensure that duplication of roles in data collection is
prevented;

(t) Ensure continued stakeholder engagement through the creation of a Multi-
Sectoral Stakeholder Council with representatives from all water sector, including vulnerable
and indigenous communities: Provided, That the Multi-Sectoral Stakeholder Council shall be
the primary avenue for all multi-sectoral consultations mandated under this Act, and shall be
consulted in the formulation of all national plans, programs, and policies of the Department:
Provided, further, That the sectoral representatives shall be appointed by the President of the
Philippines, hereinafter referred to as the President;

(u) Build a central repository of water data and effect inter-sectoral, inter-agency,
and inter-departmental coordination on all aspects of data gathering and management
for water resources development planning and compel the submission of statistics and data on
water utilization with the aim of operationalizing the integrated approach to water resources
management:

(v) Ensure the effective implementation of all the provisions of PD 1067;
(w) Promote Philippine participation in information sharing and education on best

practices in support of international efforts to achieve universal access to safe water and
improved sanitation; and the integration of water, energy, environment and food security;


(x) Ensure that the easements provided for in Title VII, Chapter 2, Section 2 of RA
386, otherwise known as the Civil Code of the Philippines and other relevant laws are enforced,
especially in all the esteros and waterways, as well as abate the dumping of untreated
wastewater and sewage into water bodies, including all acts and omissions in violation of PD
984, also known as National Pollution Control Decree of 1976, as amended, and other related
laws; and

(y) Issue and promulgate rules, regulations and guidelines as may be necessary to
implement and enforce its powers and functions under this Act.

Il. Resource Allocation and Regulation

(a) — Manage and conserve the country’s water resources to ensure the optimal use
thereof for domestic water supply, sanitation, irrigation, hydropower, navigation, flood control,
and recreation purposes, and enhance and maintain water quality, conserve watersheds, control
water pollution, and restore the environment, without compromising the natural ecosystem
functions and services:

(b) Regulate and control the utilization, abstraction, diversion and development of
water resources, taking in consideration their equitable distribution among competing demands
and determine the standards of beneficial and priority uses of water in times of crisis and
national emergencies:

(c) Formulate, promulgate, and enforce rules and regulations for the development
and optimum use of water resources and its administration and management, including
coherent water protocols, operating rules of all existing and future water infrastructure; general
criteria, methods and standards for basic data collection and project identification, formulation
and planning, and appropriate sanctions to be imposed for noncompliance;

(d) Regularly review regulations prescribed by any government agency pertaining
to water use, exploitation, development, and conservation or protection of waters, water
resources, and watershed or basin areas with respect to this Act:

(e) Impose fees or charges, as may be deemed necessary for water resources
development, conservation and protection, such as:

(1) Polluter’s Fee, which shall be based on the net waste load depending on the
wastewater charge formula pursuant to Section 13 of Republic Act No. 9275: Provided, That
the implementation of which shall be transferred from the Department of Environment and
Natural Resources to the Department of Water Resources;

(2) Raw water price, which shall take into account, among others, the scarcity of
water; and

(3) Appropriate payment structures for ecosystem services, which shall not exceed
five centavos (P0.05) per cubic meter of water consumption;


(£) Deputize LGUs to collect the national fees or charges for resource regulation
within their respective jurisdictions;

(g) Collect, regularly update, monitor, and analyze water resources data including
climatology, hydrological and other water-related data and ensure that such data is easily
accessible by relevant and authorized users;

(h) Establish, operate, and maintain observation station networks and a centralized
water resources data center for the scientific survey and appraisal of surface and groundwater
potentials of the country, and determine the annual renewable water available per water
resources region;

(i) Maintain a database that will contain updated relevant information on water data
which will be accessible by relevant and authorized users;

(i) Develop and continuously update a computerized decision support system that
incorporates data management systems relating to acquisition and database, model base in
terms of physical design, planning and decision models, and user-friendly interface concerning
graphical and visualization tools;

(k) Conduct and promote special studies and research on water economics and other
aspects of water resources development and management as may be needed to support the
policy and plan proposals of the Department, such as, but not limited to, impacts of climate
change, weather modification, flood monitoring and modeling, environmental quality, and
desalination;

() Raise public awareness through information, education and communications
programs, and build capacities for informed participation in water resources management at
the national and river-basin level; and

(m) Review the status of water permits issued and outstanding as of the date of the
effectivity of this Act and compliance by the water permit holders with the terms of their
respective water permits.

If, in the determination of the Department, acting on the basis of information, records
and reports submitted by any holders of such water permits, there is non-use of the water
resource covered by such water permits for a period of one (1) year from the date of issuance
thereof, the Department shall cause the termination or cancellation of any such water permits
to the National Water Resources Allocation Board: Provided, That the review made by the
Department shall be considered prima facie evidence of non-use in respect of any affected
water permit. For purposes of this Section, “non-use” refers to the failure of the water permit
holder to utilize the water resource or construct substantial works, facilities, systems or other
infrastructure had been constructed in pursuit of or for the purpose stipulated in the water
permit.

The Department shall submit a report to Congress on the completion of its review under
this section within one (1) year from the effectivity of this Act.



IIL. Institutional Arrangement with Public Water Agencies and Organizations

(a) Develop guidelines including rules of partnership, between and among the
Department, field offices of national government agencies, LGUs and other stakeholders in
water resource management, and facilitate the establishment of multi-stakeholder river basin
organizations (RBOs) per river basin, and strengthen and support existing RBOs and monitor

(b) Coordinate the planned and ongoing river basin initiatives of government
agencies and corporations, to which the Department shall review and endorse approval and
funding from the national budget thereof, as may be provided under existing laws, rules and
regulations:

(c) Harmonize all relevant national river basin policies and formulate new policies
and create enabling policy environment that shall allow effective and efficient management
and governance of the country’s river basins, To this end, all concerned national government
agencies and corporations shall consult the Department in such planning and implementation;

(a) Serve as the national policy coordination office for LGUs and non-
governmental organizations in the development and sustainability of all river and catchment
basins, for which the Department shall recommend the approval and funding thereof of national
government agency and corporations’ support to such local and nongovernment river and
catchment basin initiatives;

(c) Serve as the government's central river basin database management agency, to
which all government agencies and existing river basin organizations with relevant mandates
and developmental initiatives within the river basins are required to cooperate and regularly
submit their updated databases for integration and consolidation;

() Develop materials for capacity building and training of prospective RBOs, as
well as other concerned units of the Department and other water-related agencies, LGUs, and
WSPs particularly in the areas of integrated water resources management and river basin
master planning;

(g) Authorize its representatives or any deputized agent to enter any property of
public dominion with prior notice and consent: and any private land, building or enclave,
whether inhabited or not, for the purpose of conducting hydrologic surveys and investigations,
including assessing and evaluating the conditions of water facilities installed, and determining
compliance with water laws and standards:

(h) Provide technical assistance to water users including farmers, communities, and
LGUs and other WSP whether directly or in coordination with other agencies on all aspects of
integrated water resources management;

(i) Respond to consumer complaints, and ensure the adequate promotion of
consumer interests; and


() _ Deputize agents, whether from the public or private sector, to assist in the
performance of any of the powers and functions of the Department.

IV. Coordination

(a) Coordinate and integrate water resources development activities of the country
within the context of national plans and policies for social and economic development;

(b) Coordinate with other government agencies, universities, academe and private
professional groups in all aspects of data gathering, the conduct of special studies and research
onall related aspects of water resources management and development such as climate change,
environmental quality, desalination, and the development of operating strategies, procedures,
and protocols and accompanying computerized decision tools for major water facilities:

(©) Coordinate with the concerned and relevant agencies engaged in flood control,
flood risk management, and drought risk management; and

(d) Coordinate proactively with LGUs to ensure the integration of water resources
development plans into their comprehensive land use plans, Comprehensive Development
Plans or Provincial Physical Framework and Development Plan.

V. Other Functions

(a) Create when there are no existing water resources or operators, water resource
subsidiaries, instrumentalities, and entities to engage in water source development, water
supply, water transmission, water distribution, waste water treatment and management,
missionary water access, storm water management, and sanitation in accordance with existing
laws, without prejudice to private entities capable of and willing to engage in the
aforementioned activities through concession agreements, joint venture agreements, bulk water
agreements, or service agreements or contracts. For this purpose, the Department shall ensure
compliance with existing frameworks, rules, regulations and guidelines for private sector
participation in water transmission, water distribution, waste water treatment and management,
storm water management, and sanitation.

(b) Enter into contracts, joint venture agreements or understanding, public-private
partnerships, and memorandum of agreements or understanding, either domestic or foreign,
relating to investment and financing water-related projects, under such terms and conditions as
the Department may deem proper and reasonable subject to existing laws: Provided, That
government entities with mandates to enter into contracts with private entities under existing
laws shall continue to have such authority: Provided, further, That nothing in this Act shall be
interpreted as adding approval, endorsement, or consent requirements for water-related
government projects;

(©) Appoint, hire, and maintain adequate staff and personnel, advisers or
consultants with suitable qualifications and experience, as necessary, subject to existing rules
and regulations; and


(d) Exercise such other powers and functions necessary or incidental to the
effective administration and management of the country’s water resources.

SEC. 9. Composition. — The Department shall be composed of the Office of the
Secretary, and the various bureaus and services, and regional offices. The Office of the
Secretary shall house the Office of the Department Secretary, the Offices of the
Undersecretaries, the Offices of the Assistant Secretaries, and their immediate support staff.

SEC. 10. Secretary of the Department of Water Resources. ~ The authority and
responsibility for the exercise of the mandate of the Department and for the discharge of its
powers and functions shall be vested in the Secretary of the Department, hereinafter referred
to as the Secretary of Water Resources, who shall be appointed by the President. The Secretary
of Water Resources shall:

(a) Submit to the NEDA Board the Department's recommendations on policies on
water resources requiring presidential decision, and advise the President on the promulgation
of executive or administrative orders, regulations, proclamations and other issuances relati
ito matters under the jurisdiction of the Department;

(6) Establish the policies and standards for the operation of the Department
pursuant to the President's guidelines;

(c) Advise the President on the status of water management and supply in the
country, recommend to the President the declaration of a state calamity in areas affected by

water supply, and submit proposals to restore normalcy in the affected areas;

(d)__ Promulgate rules and regulations necessary to carry out the objectives, policies,
and functions of the Department;

(e) Exercise supervision and contro! over all bureaus and offices under the
Department;

(6) Supervise all attached agencies and corporations in accordance with law;
(g) Represent the Department in contracts, awards, and other similar agreements:

(h) Delegate authority for the performance of any power or function, as defined
herein to officials and employees under his direction as deemed appropriate:

(Act
Department,

the Chairperson of the governing board of the attached agencies of the

() Designate and appoint officers and employees of the Department, excluding the
Undersecretaries, Assistant Secretaries, and Regional and Assistant Regional Directors, in
accordance with the civil service laws, rules and regulations;


(k) Discipline the officials and employees of the Department, including officials
and employees of all the bureaus and offices under it, in accordance with civil service laws,
rules, and regulations; and

()) Perform such other duties and responsibilities as may be provided by law.

The Secretary of Water Resources shall also serve as a voting member of the NEDA
Board, the Governing Boards of the Climate Change Commission, the National Disaster Risk
Reduction and Management Council, and the National Land Use Committee.

SEC. 11. Undersecretaries and Assistant Secretaries. — The Secretary of Water
Resources shall be assisted by not more than three (3) Undersecretaries and three (3) Assistant
Secretaries, all of which shall be appointed by the President upon the recommendation of the
Secretary of Water Resources:

Provided, That at least one (1) Undersecretary and one (1) of the Assistant Secretaries
shall be career officers.

‘The Secretary of Water Resources is hereby authorized to delineate and assign the
respective functional areas of responsibility of the Undersecretaries and Assistant Secretaries,
in accordance with the mandate and objectives of the Department. Within their respective
functional areas of responsibility, the Undersecretaries and Assistant Secretaries shall have the
powers and functions as provided for in Chapter 2, Book [V of the Administrative Code of
1987.

SEC. 12. Qualifications and Appointment. — No person shall be appointed Secretary,
Undersecretary, and Assistant Secretary of the Department unless the person is a citizen and
resident of the Philippines, of good moral character, of proven integrity, competence and
expertise in water resource management.

SEC. 13. Department Bureaus and Services, and Regional Offices. ~ The Department
shall establish, operate, and maintain the Bureaus and Services under it such as, but not limited
to:

(a) Policy and Planning Bureau:

(b) Decision Support System Bureau;

(c) Bureau of Technical Services;

(d) Legal and Legislative Research Service:

(€) Internal Audit Service:

(f) Public Affairs Service:

(g) Administrative and Human Resources Service;


(h) Flood Control and Drainage Coordination Service;
(i) Comptrollership and Financial Management Service; and
() Local Water Service Providers Bureau.

‘A Water Resources Regional Office shall be organized per water resources region and
shall be responsible for implementing the mandates, powers, and duties of the Department at
the field level, except for policymaking which will be vested solely in the Department.

‘The Bureaus, Services and Regional Offices shall each be headed by a Director, who
shall be responsible for the efficient and effective discharge of the functions of the Bureau,
Service, or Office concerned. The Bureau Director and Regional Director shall be
assisted by one (1) Assistant Director.

‘The Department shall retain existing Project Management Offices as may be required,
which shall be under the supervision and control of the appropriate official determined by the
Secretary of Water Resources.

SEC. 14. Attached Agencies. - The following agencies shall be attached to the
Department for purposes of policy and program coordination, monitoring, and evaluation:

(a) The Metropolitan Waterworks and Sewerage System (MWSS), whose mandate,
powers, and functions are defined under RA 6234, as amended entitled, “An Act Creating the
Metropolitan Waterworks and Sewerage System and Dissolving the National Waterworks and
Sewerage Authority, and For Other Purposes,” shall be transferred from the DENR and
attached to the Department: Provided, That the MWSS shall continue to facilitate the exercise
by the concessionaires of their responsibility; carry out accounting and notification functions;
monitor, report, and administer loans; perform related functions in connection with existing
projects; manage, operate, and dispose its retained assets: Provided, further, That its regulatory
arm, the MWSS ~ Regulatory Office, shall be fully absorbed by the Water Regulatory
Commission created under this Act;

(b) The National Irrigation Administration (NIA), whose mandate, powers, and
functions are defined under RA 3601 entitled “An Act Granting the National Irrigation
Administration,” as amended by PD 552 and PD 1702; and

(c) The Laguna Lake Development Authority (LLDA), whose mandate, powers and
functions are defined under RA 4850, as amended entitled “An Act Creating the Laguna Lake
Development Authority, Prescribing Its Powers, Functions and Duties, Providing Funds
Therefor, and For Other Purposes” shall be transferred from the DENR and attached to the
Department. The LLDA shall continue to serve as the lake management and development
authority similar to a multistakeholder river basin organization and shall ensure the
implementation of the Laguna Lake Master Plan which shall be updated by the Department to
ensure alignment with the NWRMP.

‘The Secretary of Water Resources shall be the Chairperson of the Governing Boards of
the aforementioned government-owned and controlled corporations to be attached under the


Department. In case existing laws, rules and regulations provide for a specific process in
appointing the agency's Chairperson, the Secretary of Water Resources shall serve as Co-
Chairperson.

‘Any other agency performing water resources management, conservation and
protection
functions may be transferred to the Department as the President deems necessary.

SEC. 15. Offices, Functions and Personnel to be Completely Subsumed Under the
Department. ~The following offices with their applicable powers, functions, personnel, funds
and appropriations, records, equipment and property shall be subsumed under the Department:

(a) The National Water Resources Board (NWRB) with its divisions and sections,
whose mandate, powers and functions are provided in PD 424 creating the National Water
Resources Council, now NWRB, as amended: Provided, That its water utility regulation units
and functions vested under Commonwealth Act No. 146, also known as the Public Service A
as amended, shall be absorbed by the Water Regulatory Commission created under this A
Provided, further, That its resource allocation or regulation units vested under PD 1067 shall
be absorbed by the National Water Resources Allocation Board and the Resource Allocation
Office, also created under Section 18 of this Act;

(b) The Local Water Utilities Administration (LWUA) with its services,
departments and divisions, whose mandate, powers and functions are provided for in Title Ill
of Presidential Decree No. 198, as amended, otherwise known as the “Local Water Utilities
Administration Law”: Provided, That its economic regulatory functions over local water
districts shall be fully absorbed by the Water Regulatory Commission created under this Act.
In the implementation of its functions, LWUA will be transformed into the Local Water Service
Providers Bureau (LWSPB) which shall:

(1) furnish technical assistance and personnel training including training programs
for accounting and fiscal practices of local water service providers:

(2) monitor and evaluate compliance with local water standards of water service
providers: and

(3) effect system integration, joint investment and operation, district annexation
and de-annexation whenever economically warranted, in accordance with Section
50 of PD No. 198, as amended by Section 22, PD No. 768. The authority of LWUA to review,
approve and regulate the tariff rates of local water utilities to whom it has extended loans or
other finaneing under Section 64 of PD No. 198, as amended, is hereby transferred to the Water
Regulatory Commission as provided in this Act;

(c) The River Basin Control Office (RBCO) of the DENR whose mandate, powers
and functions are provided in Executive Order (EO) No. 510, Series of 2006 and EO 816, Series
of 2009, as amended: Provided, That its function pertaining to watershed reforestation activities
shall be transferred to the DENR-Forest Management Bureau, but the targeting of priority
watershed areas shall be coordinated with the Department;


(d) The Manila Bay Coordinating Office of the DENR which was strengthened by
virtue of DENR Administrative Order 2011-01 to coordinate the efforts of the fourteen (14)
national agencies covered by the Mandamus Order of the Supreme Court to rehabilitate Manila
Bay;

(e) The Water Supply and Sanitation Unit of the Department of the Interior and
Local
Government (DILG); and

(f) The Water Resources Management Office of the DENR whose mandate,
powers and functions are provided in EO 22, series of 2023.

SEC. 16. Functions to be Transferred to the Department. ~ The following functions of
the respective agencies, bureaus, and units shall be transferred to the Department:

(a) The planning, programming, administration, monitoring, management of the
National Sewerage and Septage Management Program (NSSMP) of the Department of Public
Works and Highways (DPWH); and

(b) The following functions of the dissolved Pasig River Rehabilitation
Commission and_ transferred to the Manila Bay Task Force per EO 93 Series of 2019:

(1) Updating and leading in the overall implementation of the Pasig River
Rehabilitation Master Plan; and

(2) Ensuring that the easements provided for in the Civil Code and other relevant
laws are enforced, especially in all the esteros and waterways as well as abating the dumping
of untreated wastewater and sewage into water systems, including all acts and omissions in
violation of PD 984, as amended, and other related laws.

CHAPTER III

INTERDEPARTMENT RELATIONS AND INSTITUTIONAL
ARRANGEMENTS OF THE DEPARTME!

SEC. 17. Interface and Institutional Arrangements with Other Agencies, —

(a) The Department of Health (DOH) shall continue to have primary authority and
responsibility for setting and enforcing drinking water quality standards. The Department shall
coordinate with the DOH in this aspect, and shall ensure consistency of standards and targets,
as well as the compliance of permittees with mandated standards;

(b) The DENR shall continue to have primary authority and responsibility for
protecting the environment and managing the country’s watersheds. Further, the Pollution
Adjudication Board shall remain to have jurisdiction with respect to adjudication of pollution
cases based on exceedance of the DENR Effluent Standards and other acts defined as
prohibited under Section 27 of RA 9275 and filed by this Department. Furthermore, the


Department shall coordinate with the DENR regarding the establishment of protocols for
management of all water-related data being collected by the DENR:

(c) The Department of Energy (DOE) and the National Power Corporation shall
ensure that hydropower plant development plans are consistent with the National Water
Development and Management Plan;

(d) The Department shall coordinate with the Department of Agriculture (DA) to
ensure agricultural development that reduces long-term pollution for surface water and
groundwater, and agricultural and industrial economic development that employs water
efficiency, water recycling or reuse, and the appropriate treatment of wastewater. Furthermore,
the Department shall coordinate with the DA and its Bureau of Soils and Water Management
(BSWM) regarding the establishment of protocols for management of all water-related data
being collected by DA, as well as the outputs of research and studies by BSWM which may
serve as input to policy formulation by the Department;

(e) The Department shall coordinate with the National Disaster Risk Reduction and
Management Council to ensure that its plans and designs for flood control, flood risk
management and drought risk management are aligned with the objectives and plans of the
Department;

(f) ‘The Department shall coordinate with Climate Change Commission, Philippine
Atmospheric, Geophysical and Astronomical Services Administration, and National Mapping
and Resource Information Authority for scientific studies, integrated surveys, mapping,
charting, and decision support systems:

(g) The Department shall coordinate with the Department of Tourism on
recreational or visual use of water resources;

(h) The Department shall coordinate with the Philippine Reclamation Authority,
Tourism Infrastructure and Enterprise Zone Authority and economic zone authorities on water
resources development and water requirements within reclamation areas, tourism development
areas, and economic zones, respectively:

(i) The Department shall coordinate with the Bangsamoro Autonomous Region in
Muslim Mindanao (BARMM), specifically its Economic and Development Council, Disaster
Risk Reduction and Management Council, and Ministry of Environment, Natural Resources
and Energy, regarding the preparation of master plans of river basins that overlap with the
inland waters within the BARMM’s jurisdiction, and ensure the alignment of these plans with
the NWRMP and the Bangsamoro Development Plan and other related regional plans of
BARMM;

() The Department shall coordinate with the DPWH as regards the construction of
water projects including flood contro! and other related projects within the purview of the
DPWH: Provided, That the flood management plans are aligned with the NWRMP, and that
flood waters be considered and harnessed as potential water source: Provider, further, That the
Department shall coordinate with the DPWH regarding the establishment of protocols for
management of all water-related data being collected by the DPWH and its Bureaus;


(k) The Department shall coordinate with the LGUs that own the specific areas or
land where raw water will be sourced, as regards the implementation of Section 38 of this Act,
specifically on the sharing of the total income generated from raw water pricing;

(l) The Department shall coordinate with the Department of Human Settlements
and Urban Development in planning, monitoring and enforcing integrated land use and water
resources management in the Comprehensive Land Use Development Plans and Zoning
Ordinances of the LGUs to ensure, among others, the protection of water sources and that water
availability is factored in proposed land use development plans and projects;

(m) — The Department shall coordinate with relevant government agencies, including
LGUs, with respect to development projects and shall ensure cross-cutting collaboration
between and among all water subsectors and facilitate inter-agency subsector coordination,
strategic development, planning, monitoring and provision of technical, institutional and
financial capacity building support to their different stakeholders at the water subsector level;
and

(n) All other departments and agencies of the government implementing water-

related functions and projects shall ensure that the programs and projects are consistent with
the national water management plan of the Department.

CHAPTER IV

NATIONAL WATER RESOURCES ALLOCATION BOARD AND
RESOURCE ALLOCATION OFFICE

SEC. 18. Reconstitution of the National Water Resources Board (NWRB) as the
National Water Resources Allocation Board. ~ The NWRB is hereby reconstituted and shall
henceforth be known as the National Water Resources Allocation Board, hereafier called the
“Board”. The water resources allocation and regulation functions of the NWRB are hereby
transferred to the Board, which shall supervise the effective appropriation and regulation of the
water resources in the country in accordance with PD 1067.

‘The Board shall be composed of the Secretary of Water Resources as the Chair, with
the Secretary of Environment and Natural Resources as the Vice-Chairperson, and the heads of
agencies of the NEDA, Department of Justice, Department of Science and Technology, and the
University of the Philippines ~ National Hydraulic Research Center as members.

SEC. 19. Functions of the Board. ~ The Board shall perform the following functions:

(a) Promulgate, among others, rules and regulations for the exploitation and
optimum utilization of water resources, in accordance with PD 1067 and other existing laws,
including the imposition on water appropriators of such fees or charges by the Department of,
Water Resources: Provided, That the imposition and collection of such fees and charges shall
be implemented by the
Department of Water Resources;


(b) Approve the guidelines and processes pertaining to water regulation, as
recommended by the Secretariat;

(©) Review and decide on requests for permits to extract or utilize the country’s
water resources and grant the corresponding water rights, upon recommendation of the
Resource Allocation Office: Provided. That the water rights are exercised within five (5) years
of granting of such rights: Provided, further, That applicants for water permits shall submit
proof of land ownership of, or right to use the property where the water source is located:
Provided, finally, That, if the applicant is currently using the water source being applied for
domestic or municipal purposes upon effectivity of this Act, such applicant may submit such
proof of prior use of possession of said property in lieu of ownership or right to use;

(4) Exercise appellate jurisdiction over decisions in cases involving the following:

(1) Violations and disputes relating to the appropriation, utilization, exploitation,
development, control, conservation and protection of waters;

(2) Violations and disputes on raw water fees; and

(3) Violations and disputes involving water permits, administrative allocation of
water resources and transfer of water rights;

(Dlssue subpoena duces tecum and subpoena ad testificandum:

(g) Cite any person or party in contempt for refusal to appear, testify or comply
with the lawful orders of the Board in relation to any matter subject to its investigation;

(h) Hear, receive evidence, and decide on cases falling within its jurisdiction:

(i) Impose the appropriate sanctions over violations committed by appropriators in
accordance with existing laws, rules and regulations as well as future rules and regulations
which the Board shall promulgate;

() Review; update, and revise all fees, charges, and penalties imposed on all water
appropriators as stated under Chapter VII and VIII of PD 1067, upon recommendation by the
Secretariat, and based on scientific and evidence-based studies;

(k) Delegate specific tasks vested unto the Board that may be undertaken by the
Executive Director, as may be necessary;

(2) Promulgate its own rules and procedures; and

(m) — Exercise such other powers as may be necessary to carry out its duties and
responsibilities under this law.

No injunction may be issued by any court to restrain any proceeding before the Board
except on the basis of question of law by the Supreme Court on certiorari.


Every order or decision rendered by the Board shall be in writing and shall state clearly
and distinctly the facts and the law on which it is based. The Board shall decide each case or
application within thirty (30) days following its formal submission for resolution. It shall
publish and make available for public inspection all decisions and final orders including those
in the adjudication of contested cases or applications.

SEC. 20. Resource Allocation Office. ~ There is hereby created a Resource Allocation
Office which shall be attached to the Department. It shall serve as Secretariat to the Board and
shall exercise the following functions in order to provide technical support to the Board towards
the effective regulation of the country’s water resources:

(a) Advise the Board on all matters relating to resource allocation and regulation;

(b) Formulate rules and regulation for the exploitation and optimum utilization of
surface water, groundwater, and seawater extraction and use, for the approval of the Board, and
for implementation by the Resource Allocation Office, including the processes for the
application of water permits, in accordance with PD 1067 and other existing laws:

(c) Process applications of rights to utilize water resources for the appropriate,
optimal and sustainable use of surface and ground water, for the approval of the Board or its
Executive Director, as may be delegated by the Board;

(d) Upon approval by the Board, issue water permits granted to water appropriators;

(©) Monitor performance of water rights grantees including, among others, ensuring
that water utilization is in accordance with the terms of the permits granted unto them;

(Investigate, motu proprio, violations of the water rights and the Water Code:

(g) In the case of violations and conflicts between and among users, file the
necessary cases for the decision of the Board;

(h) Enforce the decisions promulgated by the Board, and as may be delegated by
the Board;

(i) Coordinate with other relevant units of the Department regarding the
generation, updating, managing, and sharing of water data relevant to each other’s performance
of functions;

(i) Respond to consumer complaints, and ensure the adequate promotion of
consumer interests; and

(k) Perform such other related functions and activities which are necessary for the
effective regulation of water-related services.


The Office shall be headed by an Executive Director which shall have the rank of an
Undersecretary, and shall be assisted by one (1) Deputy Executive Director which shall have
the rank of an Assistant Secretary.

CHAPTER V

WATER REGULATORY COMMISSION

SEC. 21, Water Regulatory Commission. ~ There is hereby created and established as
an independent, quasi-judicial regulatory body to be known as the Water Regulatory
Commission, hereinafter referred to as the Commission, which shall be organized within one
hundred eighty (180) days after the effectivity of this Act. The Commission shall have a Board
of Commissioners, and shall be vested with powers and functions, as conferred and set forth
hereunder.

SEC. 22. Powers and Functions of the Commission. ~ The overall authority and powers
of the Commission shall cover and apply to all service providers, whether private or public,
providing or intending to provide water supply, including suppliers to subdivisions or other
service providers, sewerage, or septage treatment and disposal services for domestic,
residential, institutional, industrial or commercial use.

The Commission shall exercise the following powers and functions:

(a) Issue and promulgate rules, regulations and guidelines as may be necessary to
implement and enforce its powers and functions under this Act;

(>) Promulgate and enforce just and reasonable technical standards, classifications
and measurements of service: Provided, That local water districts, LGU-run and private
utilities, especially level II and II water service providers found performing significantly
below prescribed standards shall be required to submit a Public Service Improvement Plan with
committed performance improvements with a one-year implementation timeframe: Provided,
‘further, That unjustifiable failure to implement provisions of, or meet commitments in, the
Public Service Improvement Plan shall be cause for dissolution, consolidation, privatization,
or management takeover of the local water district: Provided, finally, That the Commission
shall have the power to cause such dissolution, consolidation, privatization, or management
takeover and shall mandate the Department to implement the same;

(c) Coordinate with the Department in the implementation of intervention,
consolidation, dissolution, privatization, or takeover, and shall ensure the continuity of delivery
of public service;

(d) Coordinate with the Philippine Competition Commission and provide technical
support in the Commission's exercise of authority and jurisdiction to establish rules and enforce
regulations to monitor, investigate, provide remedies for, and provide inputs in the Philippine
Competition Commission's hearings and deliberations on cases involving any market power
abuse or anti-competitive or discriminatory act or behavior by or against any participant in the
water supply and sanitation sector, excluding only those agreements involving projects that are
not considered natural monopolies, including in respect of the determination of whether any



merger, acquisition, joint venture or other transaction, agreement or arrangement by, between
or among water service providers or any participant in the water supply and sanitation sector
is anti-competitive or will substantially prevent, restrict or lessen competition in the relevant
market, Without prejudice to the actions that the Philippine Competition Commission, pursuant
to RA 10667, may undertake on its own, the Water Regulatory Commission may be directed
by the Philippine Competition Commission, upon finding that a market participant has engaged
in, or fell victim to such act or behavior, to stop or redress the same within the functions and
powers granted to the Water Regulatory Commission under this Act;

(@) Issue licenses authorizing the operation of water supply and sanitation services,
including community water services, in any specified area or areas with water supply and
sanitation services in any specified area in the Philippines: Provided, That any license to use
water resources or operate water supply and sanitation services shall be considered expired if
not exercised by the licensee within five (5) years upon the date of issuance;

(f) Impose and collect annual levies, and reasonable fees and surcharges as may be
necessary for achieving the purposes, powers and functions of the Commission: Provided, That
the rate of annual levies and fees shall be determined strictly on a partial cost recovery basis
for the reasonable and actual cost of regulation: Provided, further, That nothing in this section
shall be construed as authorizing the Commission to impose and collect ad valorem annual
levies;

(g) With due regard to the standardized pricing framework developed by the
Department pursuant to Section 7(h) of this Act, review, determine, fix and approve, consistent
with the rules, guidelines, procedures and methodologies which the Commission shall provide,
proposed water and sewerage and septage management tariffs, rates and charges that licensees
may impose upon their consumers. The sewerage and septage management tariffS, rates and
charges may be in the form of an environmental fee based on the actual water consumption of
the consumers for regular conduct of desludging and fixed fees for emergency desludging.

‘The Commission shall endeavor to adopt a local pricing framework, which shall provide
for the minimum water, sewerage and septage management rates and allow for uniform
adjustments to the consumer price index, or foreign exchange, as applicable, across one or more
areas: Provided, That service providers may apply for adjustments to the tariff rates taking into
consideration their actual and proposed expenditures in the construction, operation, and
maintenance of their respective water, sewerage, and septage management systems.

All applications for the imposition or adjustment of water and sewerage and septage
tariffs, rates and charges shall be acted upon by the Commission within a period of four (4)
months. If the Commission fails to issue a decision or resolution within said prescribed period,
the application shall be deemed approved;

(h) Appraise and value property and equipment used by licensees in providing
water supply and sanitation services and, for this purpose, develop a database for the value of
the property and equipment used by the licensees in providing water supply and sanitation
services by requiring each licensee to submit, on a periodie basis, an appraisal report covering
such assets duly signed and sealed by an appraisal firm duly accredited by the Securities and
Exchange Commission: Provided, That unless otherwise expressly warranted, the value of such


property and equipment as determined by such independent appraisal firms shall be presumed
a true and reasonable valuation thereof;

1G Enforce technical, financial, and other performance standards set by the
Commission for licensees or utilities;

G) Respond to consumer complaints and ensure the adequate promotion of
consumer interests and investigate motu propio violations of Sections 27, 28 and 29 of this Act;

(k) Investigate accidents directly or indirectly arising from or connected with the
maintenance or operation of the service, and make such order or recommendation as the public
interest may warrant:

() Require the review or approval of contracts or agreements that may impact on
the tariff and rates of service provision entered into by service providers upon petition or motu
propio wherein its determination public interest so dictates:

(m) Require the submission of reports, plans, and other documents that define the
performance targets of the licensees or utilities, and regular accomplishment reports;

(n) Conduct benchmarking and monitor the performance of licensees or utilities
under their jurisdiction, and publish reports detailing the results thereof

(0) Amend, modify, suspend, or revoke any license issued by them, after due notice

and hearing, on any of the following grounds: (1) when the facts and circumstances on the
strength of which the license was issued have been materially misrepresented or have
materially changed;
(2) where the licensee has failed to meet or comply with terms, conditions, and performance
targets, including but not limited to service expansion, that may have targets, including but not
limited to service expansions, that may have been set in the license; (3) where the licensee is
found to be manifestly inefficient in the operation of or provision of water supply and sanitation
services in its area; or (4) when the licensee thereof has violated or willfully refused to comply
with any order, rule or regulation of the Commission or any provision of this Act;

(p) Appoint an interim management committee to ensure continuity of service in
case a licensee, including those run by local government units, or local water districts, fails to
meet the conditions of the license;

(q) Adopt and require that books, records, and accounts be kept and maintained in
accordance with the prescribed uniform accounting system;

(®) Fix and determine, for rate-setting purposes, the proper and adequate rates of
depreciation of properties and equipment used in water supply and sanitation services;

(s) Impose and collect annual levies and reasonable fees and surcharges as may be
necessary for achieving the purposes, powers and functions of the Commission;


() Require the submission of reports on finances and operations, verified under
oaths by the owner or president and secretary of the board of the licensee;

(u) Determine and require the monitoring and submission of such data, statistics
and other information from any or all licensees as may be necessary for the effective and
efficient exercise of its duties, functions, powers and responsibilities;

(v) Investigate, motu propio or upon a written complaint, any matter concerning the
operation of the service and violations of Sections 28 and 29 and other provisions of this Act,
including alleged inefficient or inappropriate performance of obligations by water service
providers, and, after due process, render decisions thereon within one (1) year:

(w) Impose penalties and fines against any licensee or against its owners, directors,
officers, agents or representatives for any violation of this Act or of the license, order, rule
regulation or requirement issued by the Commission:

(x) Require any licensee to pay the actual expenses incurred by the Commission in
any investigation if it shall be found that a licensee violated any provision of this Act or of the
license, order, rule, regulation or requirement issued by the Commission;

(y) Advise, apprise and coordinate with other relevant agencies of the national or
local government on any matter relating to water supply and sanitation services;

(2) Deputize agents, whether from the public or private sector, to assist in the
performance of any of the powers and functions of the Commission;

(aa) Appoint an interim or temporary management committee upon appeal and after
due hearing, to ensure continuity of service in case a licensee, including those run by local
government units, or local water districts, fails to meet conditions of the license;

(bb) Appoint, hire and maintain adequate staff and personnel, advisers, or
consultants, with suitable qualifications and experience, as necessary:

(cc) Exercise original and exclusive jurisdiction over all cases involving disputes
between and among participants or stakeholders in the water supply and sanitation services;

(dd) Issue rules and regulations on terms and conditions prescribing minimum and
mandatory terms for concession agreements, joint venture agreements, management
agreements, service contracts or other contractual arrangements that may be entered into by
government entities including local water utilities and local government units and private sector
entities or other water service providers for the provision of water or sanitation services, such
as the (i) the term, scope and total cost of the activity, which may be subdivided into phases;
(ii) committed contributions and corresponding performance security requirements in
accordance with any agreed phased implementation of the activity; and (iii) cost recovery
schemes and percentage of the parties” share in the profits and losses, among others;

(ee) Upon the recommendation of the Department, and after due notice and hearing,
terminate or cancel water permits issued and outstanding as of the date of the effectivity of this,


Act to any government or private sector entities to ensure optimal and efficient use of water
resources. The Commission shall principally rely on the prima facie findings of the
Department, acting on the basis of information, records and reports submitted by any holders
of such water permits as of the effectivity date of this Act, that the water resource covered by
such water permits have not been substantially utilized or no substantial water works facilities,
systems or other infrastructure has been constructed in pursuit thereof, in each case, fora period
one (1) year from the date of issuance thereof, or if the water is used, totally or partially, for
any purpose other than those approved in the water permit. The Commission shall decide on
the recommendation for the Department within six (6) months from receipt of the
recommendation. The Commission by itself may exercise this function;

(ff) Issue rules, guidelines, procedures, and methodologies for the determination of
the appropriate water and sewerage and septage management tariffs, rates and charges and
review and confirm such tariffs;

(gg) Issue rules, guidelines, procedures and methodologies for the computation of
any adjustment of any approved water and sewerage and septage management tariffs, rates and
charges based on the prevailing consumer price index or foreign exchange adjustments set by
the appropriate national government agency, or any other factors customary in the water or
sanitation industries which require adjustment or rebasing of the tariffs, which adjustment shall
be implemented automatically subject to a thirty (30) day prior written notice to the
Commission;

(hh) Determine the existence of any material adverse government action which has
a material and adverse effect on any of the rights and privileges of, or on the enjoyment or
exercise thereof by the licensees, or which has a material and adverse effect on the licensees’
ability to comply with their financial or other contractual obligations to provide water or
sanitation services, and determine the appropriate remedial measures therefor, which may
include compensation or extension of permits or licenses; and

(ii) Perform such other incidental powers and functions as may be necessary to
attain the objectives of this Act.

SEC. 23. Composition of the Commission. —

(a) The Commission shall be a collegial body composed of five (5) full-time
members consisting of a Chairperson and four (4) members, who shall all be appointed by the
President. All members of the Commission must be citizens and residents of the Philippines,
at least thirty-five (35) years of age, and of good moral character, of recognized integrity and
competence in the field of law, business, commerce, finance, accounting or public

administration, water or utility economics, management, physical or engineering services,
hydrology and other related services, with at least three (3) years of actual and distinguished
experience in their respective fields of expertise: Provided, That out of the four (4) members
of the Commission, at least one (1) shall be a member of the Philippine Bar with at least ten
(10) years of experience in the active practice of law, at least one (1) shall be a certified public
accountant with at least ten (10) years of experience in active practice, and at least one (1) shall
be a licensed engineer with experience in the water sector.



(b) The term of office of each member of the Commission shall be seven (7) years:
Provided, That among the members first appointed, the Chairperson shall serve for a period of
seven (7) years, two (2) members shall serve for five (5) years and the other two (2) members
shall serve for three (3) years: Provided, further, That any member whose term has expired as
specified herein shall serve as such until a successor shall have been appointed and qualified:
Provided, furthermore, That any appointment to fill a vacancy in the Commission arising from
death, removal, retirement or resignation shall be made only for the unexpired term: Provided,
finally, That in no case shall any member serve for more than seven (7) years in the
‘Commission.

(©) The Commission shall meet as often as may be necessary on such day or days
as the Chairperson may fix. The presence of at least three (3) members of the Commission shall
constitute a quorum, which shall be necessary for the transaction of any business. The
affirmative vote of majority of the members of the Commission where a quorum is present
shall be necessary for the adoption of any order, resolution, decisions, or other act of the
Commission in the exercise of its quasi-judicial functions: Provided, That in promulgating
rules, regulations, guidelines and in exercising its quasi-legislative functions, an affirmative
vote of three (3) members shall be required.

(4) The Chairperson of the Commission shall exercise general executive control
and supervision over the Commission and its members, staff and personnel, agents and
represent s. Within three (3) months from the creation of the Commission and the
appointment of all Members of the Commission, the Chairperson shall determine and establish
the organizational structure and plantilla positions necessary to carry out the powers and
functions of the Commission subject to the review and approval of the Department of Budget
and Management (DBM).

The plantilla positions of the Commission shall be filled by regular appointments in
accordance with Civil Service laws, rules, and regulations. Members of the Commission shall
enjoy security of tenure and shall not be suspended or removed from office except for just cause
as specified by law.

(e) The Chairperson and members of the Commission or any of their relatives
within the fourth civil degree of consanguinity or affinity, legitimate or common law, shall be
prohibited from holding any interest whatsoever, either as investor, stockholder, officer or
director, in any company or entity engaged in provision of water supply and distribution,
septage management and sewerage services and must, therefore, divest through sale or legal
disposition of any and all interests in the water sector upon assumption to office.

SEC. 24, Secretariat of the Commission. ~The Commission shall establish a Secretariat
which shall provide the Commission with technical and support services including the
following:

(a) Provide the necessary technical inputs and secretariat support to the
Commission to facilitate the conduct of its functions;

(b) Maintain a database on the water supply and sanitation subsector; and


(c) Coordinate with other relevant agencies of the national or local government on
any matter relating to water supply and sanitation.

SEC. 25. Executive Director. ~ The Commission shall appoint an Executive Director
who shall head the Commission Secretariat, keep and maintain the official records of the
Commission, render a report on the proceedings of the Commission, and administer oaths in

all matters falling within the jurisdiction of the Commission.

The Executive Director shall be responsible for the effective implementation of the
policies, plans, programs, rules, regulations and directives of the Commission; coordinate and
supervise the activities of the different operating units under the Commission; and perform
such functions as may be assigned by the Chairperson or other members of the Commission.

SEC. 26. Compensation and Other Emoluments, - The compensation of the members
of the Commission and its staff shall conform to the provisions of RA 6758, as amended,
otherwise known as the Compensation and Position Classification Act of 1989, as amended,
and other relevant laws.

CHAPTER VI
REGISTRATION AND LICENSING

SEC. 27. Registration and Licensing of All Water Supply and Sanitation Services. ~ All
water supply and sanitation service providers, including bulk water suppliers and those
providing services to subdivisions and other service providers, shall register with the
Commission and, subject to its rules, guidelines, procedures and other issuances of the
Commission, obtain a license to operate from the appropriate regulatory units: Provided, That
the Commission shall act on the application for the issuance or the conversion of such licenses
and renewals thereof within the maximum period of one (1) year as provided under this Act or
by RA 11032, otherwise known as the Ease of Doing Business and Efficient Government
Service Delivery Act of 2018.

‘The Commission shall ensure that the grant and revocation of licenses are carried out
fairly, transparently, and without discrimination. Issuances of the Commission shall specify,
among others, the qualifications, requirements, and procedure for the grant and revocation of
licenses including the standards and performance targets that shall continuously be complied
with to keep the licenses valid. Unless otherwise provided in this Act or by the Commission,
no public water supply and sanitation service provider shall commence or conduct the business
of providing water supply and sanitation services without first obtaining a license. Concession
agreements and other contracts for water supply provision and water sanitation and treatment
services currently existing shall remain valid and enforceable unless otherwise terminated, after
due notice and hearing for reasons provided in the existing terms and conditions under the
concession or service agreement or contract, or when invalidated by the Commission, after due
notice and hearing, where national security, national emergency or public interest so dictates.

Concession agreements, joint venture agreement, bulk water supply agreements,
management and service agreements, and other contracts for water supply provision and water


sanitation and treatment services currently existing shall remain valid and enforceable unless
otherwise terminated, afier due notice and hearing for reasons provided in the existing terms
and conditions under the concession or service agreement or contract, or when invalidated by
the Commission, after due notice and hearing, where national security, national emergency or
public interest so dictates. Until the issuance of new or converted or updated registrations,
licenses or permits, as contemplated under this Act, such existing concession agreements, joint
venture agreements, bulk water supply agreements, management and service agreements and
other contracts for water supply provision or water sanitation treatment services shall serve as
the license or other legal basis for the authority to engage in water supply or sanitation services
during the term thereof.

SE

28. Conditions of License. ~ The Commission may impose such conditions on
the
licensee as it may deem necessary, such as:
(a) Tariffs, rates and charges that may be imposed from its customers or consumers;
(b) Term fixing the duration of the privilege:
(c) Grounds for modification, suspension or cancellation of the License;
(d@)_ Minimum technical performance and service level standards;

(e) _ Expansion targets and service level improvements over time;

(p Restrictions or conditions for transferability of the business or controlling
interest in the business;

(g) _ Reportorial requirements and obligations of the grantee: and

(h) Submission to annual performance audit by the Commission or its duly
authorized representative(s).

The Commission shall specify the requirements and procedure for existing holders of a
Certificate of Public Convenience (CPC), Certificates of Public Convenience and Necessity
(CPCN) issued by NWRB, or CoC issued by LWUA, to convert their existing certificates into
licenses to operate in accordance with Section 27 hereof.

To ensure continuity of water and sanitation services, a CPC, CPCN, provisional
authority or a CoC issued by NWRB or the LWUA prior to the effectivity of this Act shall
remain valid for a period of five (5) years counted from the later of the date of issuance thereof
or the date of effectivity of the implementing rules and regulations duly issued by the
Commission for the conversion thereof into licenses to operate in accordance with this Act.

All local water utilities, existing water service providers or holders of CPCN or CoC
shall be duly prioritized in the issuance of the licenses to operate over the areas where they
currently operate or as may be covered by their franchises, The submission of the CPC, CPCN,
provisional authority, or the CoC issued by the NWRB or LWUA shall be sufficient basis for


the issuance of the new and converted or updated licenses to operate required and contemplated
under this Act. To ensure continuity of service, the Commission shall complete the issuance of
such converted or updated licenses not later than six (6) months from the effectivity of the
implementing rules and regulations issued by the Commission pursuant to this Act.

All existing providers of water supply and sanitation services without a legal and valid
CPC, CPCN, provisional authority or CoC shall register with the Commission for a license
within six (6) months from the effectivity of this Act.

SEC. 29. Rights and Duties of Licenses, —

(a) Any person granted a license under this Act shall have the obligation to ensure that
licensed activities are conducted to further public interest and, in particular:

(1) Foster the maintenance and development of efficient, coordinated, and viable
operation of their licensed activities;

(2) Ensure that their water supply and sanitation services are provided in a diligent,
conscientious and workman like manner, in accordance with applicable laws, rules, and
regulations issued by the Commission and the generally accepted standards and practices of
the water supply and sanitation industry; and

(3) Comply with drinking water quality requirements and standards that may be
established by the Commission, and the DOH.

(b) Any person granted a license under this Act shall, to the extent allowed by law
and specified in the license, has the right to acquire or lease land, lay or repair water or
sanitation main lines and other relevant facilities in public ways to fulfill the terms and
conditions under the license.

(c) Subject to any condition or limitation laid down in the license, a licensee may
discontinue water supply and sanitation services to a customer if such customer defaults in the
payment of fees due to the licensee for the water supplied or sanitation services provided, or
for acts of pilferage pursuant to Sections 8, 9, 10, and 11 of RA 8041, otherwise known as the
Water Crisis Act of 1995.

(4) Any license issued under this Act shall contain provisions designed to ensure
that licensees:

(1) Publish the tariff and other charges approved by and the terms and conditions
imposed by the Commission for the provision of water supply and sanitation services;

(2) Prepare, within three (3) months from the issuance of a license, in consultation
with its customers, a Customer Service Code specifying the manner and procedure for: (a)
metering, billing, and collection of the licensee’s approved tariff and other charges, (b)
disconnection or suspension of service in case of non-payment of tariff’ or other charges, or
acts of pilferage, and (c) recommendation and recovery of arrears in tariffs and other charges:


(3) Maintain financial accounts in accordance with the manner and procedure
specified in the license and as may be required by the Commission; and

(4) Maintain and upon request by anyone during regular office hours, promptly
make available for scrutiny and inspection such data, statistics and other information, as may
be required by the Commission.

SEC. 30. Setting Tariffs, Rates, and Other Charges. — With due regard to the
standardized pricing framework developed by the Department pursuant to Section 7(h) of this
Act, the Commission shall establish tariffs, rates and other charges which are fair and
reasonable, and ensure economic viability and a fair return on investments.

Service providers may apply for the setting of tariffs, rates and charges based on and
consistent with a rate-setting methodology that the Commission shall, after due consultation,
define and publish, taking into account the following, among others:

(a) Reasonable and prudent capital and recurrent costs of providing the service
including a reasonable rate of return on capital;

(b) Efficiency of the service;
(c) Incentives for enhancement of efficiency;
(d) Capacity to pay of the customers/consumers;

(e) Equity consideration:

(f) Administrative simplicity;

(g) In cases involving valid and subsisting concession agreements prior to the
enactment of this Act, the methodology provided under the Concession Agreement;

(h) Compliance with obligations as set out under pertinent laws, jurisprudence, and,
in cases involving valid and subsisting concession agreements prior to the enactment of this
Act, the provisions of the Concession Agreement; and

() To the fullest extent practicable, the terms and conditions of the tariffs, rates or
other price-setting mechanisms set forth in any concession agreement, joint venture agreement
or other similar agreement for the provision of water or sanitation services by an existing
service provider.

‘Tariffs, rates and charges set shall be presumed valid and reasonable unless invalidated
by the Commission, after due notice and hearing, acting on a protest or contest duly filed with
the Commission to ensure continuity of service, application for setting of tariffs, rates and other
charges shall be decided within a non-extendible period of ninety (90) days from the date of
filing thereof, and the failure of the Commission to act on any such applications shall result in
a provisional approval: Provided, That in no case shall proceedings on any applications for the


setting of tariffs, rates and other charges exceed to a total period of one hundred twenty (120)
days reckoned from the date of filing of the application.

SEC. 31. Direct Access. ~ Fifty-one percent (51%) of the registered water consumers in a
service area, municipality, city or province may petition for direct access to water from any
water service provider subject to concurrence by and reasonable compensation to the service
provider and approval by the Commission. If the petition for direct access from any water
service provider is approved by the Commission, the new water service provider shall
reimburse the existing service provider for, as applicable, either the book value or the market
value as determined by an independent appraiser accredited by the Commission, whichever is
higher, of the water source, water supply or water distribution or transmission facilities.
pipelines and other equipment which shall be transferred to or utilized by the new water service
provider. The Commission shall promulgate the implementing rules and procedures for this,
mode of service, which shall include, among others, financial and technical capability of the
new service provider.

SEC. 32. Innovative Schemes to Improve Efficiency and Management of Systems. ~The
Commission shall promote innovative schemes such as the consolidation or integration of water
supply and sanitation services, or providers in the same service area, where it shall result in
improved efficiency, service expansion and lower costs. To this end, the Commission shall
establish and issue such rules and guidelines as may be necessary to (a) create incentives to
encourage efficiency and service expansion: (b) establish the standards and targets that service
providers are required to _-meet; and (c) define the fines and penalties that shall be imposed.
for failure to meet such standards and targets.

CHAPTER VIL
QUASI-JUDICIAL FUNCTIONS OF THE COMMISSION

SEC. 33. Proceedings Before the Commission. ~ For the purpose of any investigation,
inquiry or proceeding, the Commission shall:

{a) Issue subpoena duces tecum and subpoena ad testificandum;

(b) Appoint hearing officers to hear and receive evidence on behalf of the
Commission; and

(c) Cite any person or party for contempt for refusal to appear, testify, or comply
with an order of the Commission on any matter that is the subject of investigation, inquiry or
proceeding before the Commission.

SEC. 34. Orders and Decisions of the Commission. — Any order, resolution, or
decision of the Commission shall be promulgated promptly, expeditiously, reasonably, and in
writing, and shall state clearly and distinctly the facts and law on which it is based. The
Commission shall publish and make available for public inspection, all decisions and final
orders in the adjudication of contested cases or applications.

SEC. 35. Appeals Procedure and Prohibition Against Injunction. —


(a) The orders, rulings, and decisions of the Commission are final and executory
unless appealed to the Court of Appeals within fifteen (15) days from receipt of notice of such
order, ruling or decision: Provided, That orders, rulings, and decisions of the Commission
approving tariff’, shall be immediately executory and may be suspended only upon appeal and
filing of a bond, in an amount to be fixed by the Commission, to answer for damages
occasioned by the suspension or stay of execution of such orders, rulings, and decisions.

(6) No injunction may be issued by any court or administrative agency to
any proceeding before, or the implementation or execution of any order, ruling, or decision of
the Commission, except on the basis of a question of law brought before the Supreme Court
on certiorari.

(©) Any act or decision of the Commission shall not be invalidated merely because
of a defect or irregularity in, or in connection with, the appointment or vacancy in the Office
of the Chairperson or any other member of the Commission.

CHAPTER VIII
INTERDEPARTMENTAL RELATIONS OF THE COMMISSION

SEC. 36. Interface with Other Sector Regulators. ~

(a) The DENR shall continue to exercise primary jurisdiction over programs aimed
at protecting the environment and the quality of water sources from waste and pollution, and
shall promulgate rules, regulations, and standards in this regard. The DOH shall continue to
exercise primary jurisdiction over the determination and enforcement of standards for quality
drinking water and sanitation.

(b) The Commission shall coordinate with the:

(1) DOH to ensure that the standards and targets for quality drinking water and
sanitation are consistently complied with;

(2) LGUs for development projects relating to water supply and sanitation; and
(3) PCC for the provision of its technical advisory services in the exercise of the
exclusive authority and jurisdiction of the Commission to investigate and act on any market
power abuse or anti-competitive or discriminatory act or behavior by or against any
participant in the water supply and sanitation sector.
CHAPTER IX
TRANSITORY PROVISIONS

SEC. 37. Organizational Structure and Staffing Pattern. — The Secretary of the
Department and the Chairperson of the Commission shall determine the respective


organizational structure and staffing pattern of the Department and the Commission in
accordance with the revised compensation and position classification system subject to the
evaluation and approval of the Department of — Budget and Management and in compliance
with the civil service laws, rules and regulations and other relevant laws.

SEC. 38. Transfer of Rights and Functions, ~ The Department shall, by virtue of this
Act be subrogated to all the rights and assume all the functions of the government agencies
and units whose powers and functions have been subsumed, absorbed, transferred or attached
to the Department. The Commission shall also, by virtue of this Act, be subrogated to all the
rights, and assume all the functions, of the Water Utilities Division of the NWRB, the regulatory
offices of MWSS and LWUA, the regulatory units of all special economic zones, and all other
government agencies and units whose powers and functions have been transferred to the
Commission in accordance with the rules and regulations of the Civil Service Commission
(CSC).

The transfer of powers and functions to the Department or the Commission of the
concerned agencies as herein provided for, shall be deemed completed within twelve (12)
months after the effectivity of this Act. All agencies transferred, subsumed and attached to the
Department or Commission shall continue to function under their present mandates until the
six-month transition period mandated under this Act shall have lapsed. The transfer of powers
and functions shall include all applicable funds, personnel, records, property and equipment,
‘as may be necessary. The heads of the affected agencies shall continue to serve until replaced.

All rights and functions of the affected agencies are hereby transferred to and assumed
by the Department or Commission and shall be acted upon in accordance with the rules and
regulations of the Commission on Audit and other pertinent laws, rules, and regulations.

Performance audit of all water-related agencies and institutions, including LWUA and
water districts, MWSS, MWSS-RO and its concessionaires, LGU-run utilities, Tourism
Infrastructure and Enterprise Zone Authority, Philippine Economic Zone Authority, Bases
Conversion and Development Authority, Subic Bay Metropolitan Authority, DILG, and NIA,
shall be conducted by the Department.

SEC. 39. Absorption, Separation or Retirement from Service of Employees of the
Subrogated Agencies. ~ The current employees of all government agencies and units whose
powers and functions have been transferred to, absorbed or subsumed by the Department or
Commission shall enjoy security of tenure, in accordance with their staffing pattern and the
selection process as prescribed under RA 6656 or the Government Reorganization Law.
Employees opting to be separated from the service as a consequence of the consolidation, and
reconstitution under the provisions of this Act shall, within one (1) month from their separation
or phase out from the service, receive separation benefits in accordance with existing laws, and
those who are qualified to retire shall be allowed to retire and be entitled to all benefits under
existing retirement laws.

CHAPTER X

FINAL PROVISIONS


SEC. 40. Applicability of Ease of Doing Business Law. ~ The prescribed processing
time provided under Section 9(b) of RA 11032 shall be applicable to all agencies and LGUs
covered under this Act particularly on accessing government services.

SEC. 41. Appropriations, ~The amount necessary for the initial implementation of this
Act shall be charged against the currents year’s appropriations of the agencies, entities,
divisions, sections or units subsumed or transferred to the Department. Thereafter, such amount
shall be included in the annual General Appropriations Act.

SEC. 42. Water Trust Fund, ~ There is hereby created a Water Trust Fund in the Bureau
of Treasury sourced from raw water pricing, permit fees, registration fees, supervision and
regulation enforcement fees, filing fees, testing fees, payments for ecosystem services, and
other service income from the use of water resources. The Trust Fund shall be administered by
the Department. The annual levies, and reasonable fees and surcharges as may be necessary for
achieving the purposes, powers and function of the Commission under Section 22({) of this Act
shall also be remitted to the Water Trust Fund. Proceeds from the trust fund shall be utilized
for water development, water sanitation and waste water treatment and management, and water
sustainability programs and projects authorized under this Act: Provided, That a maximum of
ten percent (10%) of the total proceeds generated from raw water extraction and all payments
for ecosystem services shall be given as share of the concerned local government unit or
indigenous peoples (IP) community who own the specific areas or land where the raw water
was sourced: Provided, further, That the Department shall prescribe standards for programs and
projects where proceeds from payments for ecosystem services shall be utilized.

SEC. 43. Implementing Rules and Regulations. ~ Upon the effectivity of this Act, the
Department and the Commission, as may be applicable, as well as NEDA, DBM, DENR, CSC,
and the National Commission on Indigenous Peoples in consultation with concerned
government —_ agencies shall:

(a) Promulgate the rules and regulations of the Department and the Commission
necessary for the effective implementation of this Act within one hundred twenty (120) days
after its effectivity; and (b) Submit to the DBM the Department's and the Commission’s
budget for fiscal year following the promulgation of its implementing rules and regulations;
and implement the training of the personnel of the Department and the Commission.

SEC. 44. Mandatory Review of the Implementation of this Act. ~ The Department and
the Commission shall conduct a review of the implementation of this Act at the end of the fifth
(5%) year from the date of its effectivity and submit a report to Congress.

SEC. 45. Separability Clause, ~ If any reason, any portion o provision of this Act shall
be held unconstitutional or invalid, the remaining provisions not affected thereby shall continue
to be in full force and effect.

SEC. 46. Repealing Clause. ~

‘The following provisions are hereby repealed:


(1) Section 3(h) and Section 12 on the provision with respect to fixing of water rates
and sanitation service fees, Section 3 (n) on the provision with respect to regulation of
waterworks and deep wells, and Section 3 (p) on the provision with respect to regulation of
waterworks and sanitation systems in privately owned subdivisions of RA 6234 entitled “An
Act Creating The Metropolitan Waterworks And Sewerage System And Dissolving The
National Waterworks And Sewerage Authority, And For Other Purposes,” as amended;

(2) Section 62, 63, and 66 of Title III on Local Water Utilities Administration Law
of Presidential Decree No. 198 otherwise known as the Provincial Water Utilities Act of 1973,
as amended by Letter of Instruction No. 700, series of 1978, Letter of Instruction No. 744,
Series of 1978, EO 124, Series of 1987, EO 123, Series of 2002, and EO 860, Series of 2010,
on the regulation of water districts;

(3) Section 1 of EO 124-A Series of 1987, amending EO 124, dated 30 January
1987, Reorganizing the Department of Public Works and Highways, Redefining Its Powers and
Functions, and For Other Purposes on reorganizing the National Water Resources Council into
the National Water Resources Board;

(4) EO 510 series of 2006 creating the RBCO, and EO 516 series of 2009 declaring
the RBCO under the DENR as lead government agency for the integrated planning,
management, rehabilitation, and development of the country’s river basins: and

(5) EO 22, Series of 2023 creating the Water Resources Management Office of the
DENR.

(b) The following provisions are hereby amended accordingly:

(1) Section 3 paragraph 3 Commonwealth Act No. 146, as amended, pertaining to
all cases involving the fixing of rates;

(2) Section 154, Article V, Chapter I, Title One, Book II of RA 7160, as amended,
otherwise known as the “Local Government Code of 1991”, and its implementing rules and
regulations on the power of the LGUs to fix the rates of water utilities owned, operated and
maintained by them within their jurisdiction is hereby repealed or modified accordingly:

(3) Section 13(b) on the regulation of enterprises within the Economic Zone under
RA 7916 as amended, otherwise known as “The Special Economic Zone Act of 1995”;

(4) Section 69 of RA 9593, otherwise known as “The Tourism Act of 2009”, and its
implementing rules and regulations which mandate the Tourism Infrastructure and Enterprise
Zone Authority to grant franchises, supervise the operation of public utilities, and register,
monitor and regulate enterprises within Tourism Enterprise Zones, are hereby repealed or
modified accordingly:

(5) Sections 7 of RA 9275, transferring the administration of the NSSMP from the
DPWH to the Department;


(6) Articles 3(d) and Chapters VII and VIII of PD 1067 pertaining to the
enforcement of the Water Code:

(7) Section 15 (Conditions in Permits) of the Implementing Rules and Regulations
(IRR) of PD 1067;

(8) Section 3.2(b) EO 149, Series of 1993 transferring the Laguna Lake
Development
Authority from the Office of the President to the DENR; and

(9) EO 168, Series of 2022, which transferred the National Irrigation
Administration from the Office of the President to the DA.

All other laws, presidential decrees, executive orders, presidential proclamations, rules
and regulations, or parts thereof which are inconsistent with the provisions of this Act are

hereby repealed or amended accordingly.

SEC. 47. Effectivity. —This Act shall take effect fifteen (15) days after its publication in
the Official Gazette ot in a newspaper of general circulation.

Approved,