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

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL NO. _58

Introduced by Representative Jaime R. Fresnedi

EXPLANATORY NOTE

This proposed measure seeks to establish the Department of Water Resources. It aims to
establish a body that shall ensure safe, adequate, affordable and sustainable water supply and
improved sanitation services for all Filipinos and that this finite resource will be sustained.

Every time the dry months come, which is anywhere from March to May and sometimes
even extends up to early June, the Philippines suffers from the serious effects of lack of water
that results in the inconvenience of the general public and the devastation of crops in farming
regions. The mere fact that the country goes through this debacle every year is a testament to
our inaction regarding this problem.

Climate change hazards (rainfall variability, increasing temperatures, rising sea levels
and more extreme weather) which pose major risks to water resources and a growing
population will further aggravate this situation. There is no doubt that the country's water
resources are one of the most adversely affected by climate hazards. This highlights the urgent
need to properly plan for, and manage our finite water resources in order to meet the increasing
demands of many competing users.

Unfortunately, the management of the country's water resources remains fragmented and
uncoordinated with over 30 government units and agencies at national and local levels
implementing separate and disharmonized policies, plans and programs to develop and operate
water facilities and infrastructure for various uses, regulate water use and set tariffs. and
monitor water-related parameters. This continued overlapping and fragmented management
and regulation of water resources and services hinders the enactment and implementation of a
comprehensive, integrated and doable long-term solution to address keener competition,
imbalance resource utilization and conflict of interests among water users, especially in areas
already identified as water-stressed. It puts at risk the attainment of the SDG target of universal
access to safe water supply and improved sanitation by 2030.

There is an urgent need for an integrated and coordinated planning and implementation
of programs and projects that promote synchronized, sustainable and science-based
management of the country's water resources that would address the imbalance in water
resource utilization, reduced water availability, declining water quality, recurrent flooding, and


other water-related issues in many parts of the country. This cannot be achieved without
addressing the fundamental governance and institutional issues of the sector.

An apex body for the water sector is critically needed in order to have a single entity that
will be in charge of the overall planning, programming, policy formulation, and management
for the sector. It will serve as the sector's champion and ensure that subsector policies and plans
are aligned with the overall Sector Master Plan. It will coordinate, monitor and evaluate sector
performance and take appropriate action as needed. It will conduct extensive and regular
hydrological studies/analyses which are very vital for water planning and allocation purposes.

In view of the foregoing, the immediate approval of this bill is eamestly sought.

Lone District, Muntinlupa City


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

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL NO. _989

Introduced by Representative Jaime R. Fresnedi

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:

CHAPTER I
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 fictions 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 waming, 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.

e) 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 or 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 (iWVRM) refers to a systematic,
collaborative, and multistakeholder 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 or issued by
the Water Regulatory Commission.


j) 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 IWRM 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.

1) 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 su face run-off.

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

©) 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 sate 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) 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.

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

s) Management refers to the provision of proper collection, treatment, and disposal
of septage.

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

u) 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.

vy) Sewerage refers to any system or network of pipelines, ditches, channels or
conducts 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.

z) Demand Management refers to any method, whether technical, economic.
administrative, financial, or social, that will accomplish one or more of the following:

i, Reduce the quantity or quality of water required to accomplish a specific
task;

ii, 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;

iii, Reduce the loss in quantity or quality of water as it flows from source,
through use, to disposal;

iv. Shift the timing of use from peak to off-peak periods; and

v. 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.

ce) Water Resource refers to water under the ground or groundwater, water above
the ground such as surface water, ands, floods, storm water and urban drainage,

i


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 (il)
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.

ee) 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.

ff) Water supply service refers to any activity comprising Levels 1, If and III water
supply including bulk suppliers, suppliers to subdivisions, and other water service
providers (WSPs).

CHAPTER II
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, imgation,
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 sate, 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 (IWRM) 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 IWRM
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;

d) 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;

¢) 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;

) 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;


hh) 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;

b) Prioritize and seek the immediate attainment of universal access to safe,
adequate. affordable and sustainable water supply and improved sanitation services for
all Filipinos, either 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 to a balanced and healthful ecology in accord with the
thythm and harmony of nature: Provided, That the Department shall pursue universal
access to clean water by 2030;

c) 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;

4) Ensure that integrated water resources management is strongly coordinated with
land use and coastal and multi-hazard planning and management;

e) 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;

£) 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;

g) 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;

h) 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 retum; rate adjustment mechanisms for consumer price indices and
currency fluctuations; and other factors relevant to the operation of waterworks systems
and infrastructure;

i) Ensure that all 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

|) 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 IWRM 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 WRMP in consultation with other agencies and
stakeholders, following the IWRM framework and integrating therein a national
land use plan, submit the NWRMP to the Economy and Development Council (ED
Council) 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;

) 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;


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

2) 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;

j) Formulate policy, strategies, master plans and programs on flood risk
management in the contest of integrated flood management (IFM) which integrates
water, land, coastal zone and multi-hazard 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 DEPDev 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 ED Council 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;

©) 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 DEPDev and other concemed agencies to promote and enable
more PPPs in the sector;

1) Gather, analyze, and organize needed statistical data and information;
for those water-related data generated by other concemed 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;

s) Incase of gaps in data collection by other agencies, under item (¢) 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;

4) 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:

i. 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;

af


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

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

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

2) 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;

1) 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.

Ill. _ 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 their activities;

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;

¢) 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;

d) 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;

e) 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

j) 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 contest 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 on all 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

14


be interpreted as adding approval, endorsement, or consent requirements for water-
related government projects;

c) 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 ED Council 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 relative to matters under the jurisdiction of the Department;

b) 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;

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

) Exercise supervision and control over all bureaus and offices under the
Department;

£) 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;

i) Act as the Chairperson of the governing board of the attached agencies of the
Department;


j). 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

1) 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 ED Council,
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 IV 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;
e) 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
j) 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 (LDA), 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 multi-stakeholder 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 Act, as amended, shall be absorbed by the Water Regulatory
Commission created under this Act: 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, divisions, whose mandate, powers and functions are provided for in Title
III 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:

i. furnish technical assistance and personnel training including training
programs for accounting and fiscal practices of local water service providers;

ii, monitor and evaluate compliance with local water standards of water
service providers; and

iii, 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 financing 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;

4) 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:

i. Updating and leading in the overall implementation of the Pasig River
Rehabilitation Master Plan; and

ii, 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 IT
INTERDEPARTMENTAL RELATIONS
AND INSTITUTIONAL ARRANGEMENTS OF THE DEPARTMENT

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
shail 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 nsk
management and drought risk management are aligned with the objectives and plans of
the Department;

{) 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 BARMIM'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 control 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 DP WH 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:

20


1) 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 THE 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 knownas the National Water Resources Allocation Board, hereafter 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 DEPDev, 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;

c) 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 (S)
years of granting of such rights: Provided, further, That applicants for water permits shall

21


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;

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

i. Violations and disputes relating to the appropriation, utilization,
exploitation, development, control, conservation and protection of waters;

ii. Violations and disputes on raw water fees; and

iii. Violations and disputes involving water permits, administrative allocation
of water resources and transfer of water nights;

e) Issue subpoena duces tecum and subpoena ad testificandum;

f) 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;

) Hear, receive evidence, and decide on cases falling within its jurisdiction;

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

i) 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;

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

k) Promulgate its own rules and procedures; and

1) 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

2


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;

©) Process applications of nights 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;

4) 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 propio, 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;

j) 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

23


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;

b) 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 Il and III 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

24


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;

£) 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 periodic 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

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

j) 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;

25


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;

1) 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
‘monu 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;

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

1) 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

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

1) 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;

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ww) 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 ru 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, for a 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;

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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 tarifis,
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
licensee's 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

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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.

d) The Chairperson of the Commission shall exercise general executive control
and supervision over the Commission and its members, staff and personnel, agents and
representatives. 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 ftom 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.

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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. 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. 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.

SEC. 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;

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©) Grounds for modification, suspension or cancellation of the License;
4) Minimum technical performance and service level standards;
) Expansion targets and service level improvements over time;

f) 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 representatives.

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 (S) 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 Licensees. —

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:

i. Foster the maintenance and development of efficient, coordinated, and
viable operation of their licensed activities;

ii, 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

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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.

©) 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.

d) Any license issued under this Act shall contain provisions designed to ensure

that licensees:

i, 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;

ii, 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 tariffs or other charges, or acts of pilferage, and (c) recommendation
and recovery of arrears in tariffs and other charges;

iii, Maintain financial accounts in accordance with the manner and procedure
specified in the license and as may be required by the Commission: and

iv. 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 Tariff, 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;

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d) Capacity to pay of the customers/consumers;
€) Equity considerations
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

i) 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.

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CHAPTER VII
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

) 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 tariffs, 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.

b) No injunction may be issued by any court or administrative agency to restrain
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 Cout on certiorari.

c) 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 VII
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,

34


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:

i. DOH to ensure that the standards and targets for quality drinking water
and sanitation are consistently complied with;

ii, LGUs for development projects relating to water supply and sanitation;
and

iii. 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 L WUA, 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
concemed 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-rm utilities, Tourism

35


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 patter 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(f) 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 DEPDev, 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

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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 ftom the date of its effectivity and submit a report to Congress.

SEC. 45. Separability Clause. — If any reason, any portion or 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:

a) 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;

b) Section 62, 63. and 66 of Title II 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, Senes of 1987, EO 123, Senes of 2002, and EO 860,
Senes of 2010, on the regulation of water districts;

©) Section 1 of BO 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 goverment agency for the integrated planning,
management, rehabilitation, and development of the country’s river basins; and

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

The following provisions are hereby amended accordingly:

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

b) 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;

©) 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”;

37


d) 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;

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

f) Articles 3(4) and Chapters VII and VIII of PD 1067 pertaining to the
enforcement of the Water Code;

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

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

i) EO 168, Senes 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 or in a newspaper of general circulation.

Approved,

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