Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

‘TWENTIETH CONGRESS
First Regular Session

House Bm No.__ 4526

~ Introduced by: Hon. Iris Marie D. Montes

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

EXPLANATORY NOTE

The State of the Water and Sanitation Sector (WSS) in the Philippines,
which was presented during the Philippine Water and Sanitation Forum in 2018
reveals that 12.32% of the country’s 22.7 million families still have no access to
safe water supply. Its shows that 2.04% and 4.23% of the country’s population
still have cases on unimproved sanitation and have occurrences of open
defecation, respectively.

Accordingly, many areas across the country are already experiencing
ground water stress or depletion due to over extraction and it does not help that
the absence of a uniform and stable regulatory framework/regime does not
provide an environment that would encourage and maximize investments in
wss.

This situation is especially burdensome for women because without safely
managed water, sanitation and hygiene (WASH) services, women and girls are
more vuinerable to abuse, attack and ill-health, affecting their ability to study,
work and live in dignity inasmuch as most of them have the responsibility of
fetching water. Women and girls are also disproportionately affected by poor
water, sanitation and hygiene services and facilities.

As it is, the regulatory framework for water in the country has many
overlaps, and economic regulations are provided under a number of different
arrangements thereby resulting in an unstable and fragmented regulatory
framework. The absence of a lead agency in the water resource sector, the
different coordination systems, functions and jurisdictions of the various
agencies have made it impossibly hard for water and sanitation to be collectively
managed. Thus, the establishment of a unified agency that would focus on water,
sewerage and sanitation is certainly very important.

In this light, this bill seeks to rationalize the economic and administrative
regulation of water utilities through the creation of the Department of Water

1 https://www .unwater org/water-facts/water-and-gender Accessed on 05 September 2025



Resources, which 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.

It aims to ensure the optimal use of domestic and municipal water supply,
sanitation, irrigation, hydropower, industry, navigation, flood management, and
recreation, and water utilization aspects of fisheries or aquaculture.

The Department shall serve as the primary agency responsible for the
planning and policy formulation towards the attainment of universal access to
safe, adequate, affordable, and sustainable water supply, and improved
sanitation services for all Filipinos and as the national agency responsible in the
enforcement of Presidential Decree 1067, otherwise known as “The Water Code
of the Philippines”.

This move follows the lead of other countries who have found it wise to
create a special department to manage the vital resource of water including
Japan, Australia, China, and India, so that the availability of potable water in the
in the country and the continuing water supply for domestic, agricultural and
industrial consumption may be ensured and the perennial problem that seriously
affects the lives of the people in terms of health, sanitation, food security, and
livelihood, especially among women and girls, may be effectively addressed.

Moreover, the bill seeks to create an independent, quasi-judicial
regulatory body to be known as the Water Regulatory Commission, which shall
have the authority over all service providers 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.

Indeed, water is one of the most important resources in the world and as
an archipelago, our country is gifted with this resource in abundance. It is up to
us, however, to develop and utilize this resource in such as a way that will
ensure the provision of safe, adequate, affordable, and sustainable water supply
and improved sanitation services for the Filipinos.

In view thereof, approval of this bill is earnestly sought.

IRIS MARIE D. MONTES
Kababalhan Kabalikatan para sa Kapakanan
‘at Kaunlaran ng Bayan (4K) Party-list


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

‘TWENTIETH CONGRESS
First Regular Session

House emt no, _4925

Introduced by: Hon. Iris Marie D. Montes

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 the 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 functions of
providing natural resource inputs and space for production and consumption,
and (c) consumer or consumption services which provide for physiological as
well as recreational and related needs of human beings.

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

(d) Flood Risk Management (FRM) refers to acts of defining and determining
the appropriate methods, acts, and protocols aimed at preventing and reducing
the risk of loss of both life and property due to flood waters. Flood risk
management consists of a cycle of prevention, mitigation, adaptation,
preparedness and early warning, and response and recovery. The elements of
FRM include: integrating land-use planing and coastal zone management into
water management; adopting a holistic approach so that FRM is part of wider
tisk 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 (IWRM) refers to a systematic,
collaborative, and multi-stakeholder process which promotes the coordinated
development and management of water, land, and related resources within
geophysical boundaries in order to maximize the resultant economic and social
welfare in an equitable manner, and without compromising the sustainability of
vital ecosystems.

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

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


(i) 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 die resource towards
water security, and top-level direction on die 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.

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

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

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

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

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

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

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

(s) Septage 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) Sewage refers to water borne human or animal wastes, excluding oil
or oil waste, removed from residences, buildings, institutions, and industrial and
commercial establishments together with such groundwater, surface water and
storm water as may be present including such waste from vessels, offshore
structures, other receptacles intended to receive or retain waste or other places
or the combination thereof.

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

CHAPTER
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,
irrigation, hydropower, industry, navigation, flood management, and recreation,
and water utilization aspects of fisheries or aquaculture.

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



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

In the implementation of Republic Act (RA) No. 9275, otherwise known as
the Philippine Clean Water Act of 2004, the Department shall be responsible for
preparing, formulating and implementing a five-year plan of action for a national
and a regional septage management plan, which shall contain measures for the
construction of wastewater treatment facilities and provision, installation,
operation and maintenance and, where practicable, the integration of sewerage,
septage management, storm water management and other sanitation facilities.
Compliance with the mandate to implement septage management services and
systems by any WSP pursuant to the Philippine Clean Water Act of2004 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 shail be performed at
river-basin level, involving all the stakeholders at that particular river basin;

(e) Integrated and accurate data collection and analysis and the use of
scientific decision support systems shall be undertaken in water resources


management including flood modeling and warning systems that are essential
for an effective, efficient, and sustainable water resources management system;

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

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

(h) The proper operation and maintenance of waterworks systems
resulting In the uninterrupted and adequate supply and distribution of potable
water for domestic and other purposes, and the proper operation and
maintenance of sewerage systems which are essential services to public health
and safely, 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 rhythm 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;


(d) 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;

(f) 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 return; 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 policy making 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;

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

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

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

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

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

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

(i) Formulate policy, strategies, master plans and programs on flood risk
management in the context 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;

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

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

(n) Develop and implement, in coordination with other relevant agencies,
effective codes, standards, benchmarks, and reasonable guidelines on project
investigation, formulation and planning of water resources infrastructure, to
ensure the safety of all public and private water structures in the country, and
assure efficiency and proper quality in the construction of water, sanitation,
irrigation, hydropower, flood control and drainage infrastructure;

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

(p) Ensure that the planning of water infrastructure considers the highest
efficiency and most appropriate technology and quality, in accordance with
national development objectives;(q) Review existing guidelines appropriate for
private sector participation in the water sector and submit recommendations to
the Public-Private Partnership (PPP) Center of NEDA and other concerned
agencies to promote and enable more PPPs in the sector;

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

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

(t) Ensure continued stakeholder engagement through the creation of a
Multi-Sectoral Stakeholder Council with representatives from all water sector,
including vulnerable and indigenous communities: Provided, That the Multi-


Sectoral Stakeholder Council shall be the primary avenue for all multi-sectoral
consultations mandated under this Act, and shall be consulted in the formulation
of all national plans, programs, and policies of the Department: Provided, further.
That the sectoral representatives shall be appointed by the President of the
Philippines, hereinafter referred to as the President;

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

(v) Ensure the effective implementation of all the provisions of PD 1067;

(w) Promote Philippine participation in information sharing and education
on best practices in support of international efforts to achieve universal access to
safe water and improved sanitation; and the integration of water, energy,
enviromnent 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.

II. 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;

(©) 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;

(©) Regularly review regulations prescribed by any government agency
pertaining to water use, exploitation, development, and conservation or


protection of waters, water resources, and watershed or basin areas with respect
to this Act;

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

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

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

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

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

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

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

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

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

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

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

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



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

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

III. 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;

(d) 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;

(e) 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 non government river and catchment basin initiatives;

(f) 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;

(g) 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;


(h) 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;

(i) 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;

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

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

IV. Coordination

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

(b) Coordinate with other government agencies, universities, academe
and private professional groups in all aspects of data gathering, the conduct of
special studies and research 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;

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

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

V. Other Functions

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



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

(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 NEDA Board the Department’s recommendations on
policies on water resources requiring presidential decision, and advise the
President on the promulgation of executive or administrative orders, regulations,
proclamations and other issuances relative to matters under file jurisdiction of
the Department;

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

(©) Advise the President on the status of water management and supply in
the country, recommend to the President the declaration of a state calamity in
areas affected by water supply, and submit proposals to restore normalcy in the
affected areas;

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

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

(f) 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

(I) Perform such other duties and responsibilities as may be provided by
law. The Secretary of Water Resources shall also serve as a voting member of
the NEDA Board, the Governing Boards of the Climate Change Commission, the
National Disaster Risk Reduction and Management Council, and the National
Land Use Committee.

SEC. 11. Undersecretaries and Assistant Secretaries.- The Secretary of
Water Resources shall be assisted by not more than three (3) Undersecretaries
and three (3) Assistant Secretaries, all of which shall be appointed by the
President upon the recommendation of the Secretary of Water Resources:
Provided, That at least one (1) Undersecretary and one (1) of the Assistant
Secretaries shall be career officers.

The Secretary of Water Resources is hereby authorized to delineate and
assign the respective functional areas of responsibility of the Undersecretaries
and Assistant Secretaries in accordance with the mandate and objectives of the
Department. Within their respective functional areas of responsibility, the
Undersecretaries and Assistant Secretaries shall have the powers and functions
as provided for in Chapter 2, Book 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 ofTechnical 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 Servict
(i) Comptrollership and Financial Management Service; and
() Local Water Service Providers Bureau.

‘A Water Resources Regional Office shall be organized per water resources
region and shall be responsible for implementing the mandates, powers, and
duties of the Department at the field level, except for policy making 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

(©) The Laguna Lake Development Authority (LLDA), whose mandate,
powers and functions are defined under RA 4850, as amended entitled “An Act
Creating the Laguna Lake Development Authority, Prescribing Its Powers,
Functions and Duties, Providing Funds Therefor, and For Other Purposes” shall
be transferred from the DENR and attached to the Department. The LLDA shall
continue to serve as the lake management and development authority similar to
a 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 and divisions, whose mandate, powers and functions are provided
for in Title Ill of Presidential Decree No. 198, as amended, otherwise known as
the “Local Water Utilities Administration Law"; Provided, That its economic
regulatory functions over local water districts shall be fully absorbed by the
Water Regulatory Commission created under this Act. In the implementation of
its functions, LWUA will be transformed into the Local Water Service Providers
Bureau (LWSPB) which shall:

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

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

(3) effect system integration, joint investment and operation, district
annexation and de-annexation whenever economically warranted, in accordance
with Section 50 of PD No. 198, as amended by Section 22, PD No. 768. The
authority of LWUA to review, approve and regulate the tariff rates of local water
utilities to whom it has extended loans or other 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
0f2006 and EO 816, Series of 2009, as amended: Provided, That its function


pertaining to watershed reforestation activities shall be transferred to the DENR-
Forest Management Bureau, but the targeting of priority watershed areas shall
be coordinated with the Department;

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

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

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

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

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

(b) The following functions of the dissolved Pasig River Rehabilitation
Commission and transferred to the Manila Bay Task Force per EO 93 Series
0f2019:

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

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

CHAPTER II
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 shall coordinate with the DOH in this aspect, and
shall ensure consistency of standards and targets, as well as the compliance of
permittees with mandated standards;

(b) The DENR shall continue to have primary authority and responsibility
for protecting the environment and managing the country’s watersheds. Further,
the Pollution Adjudication Board shall remain to have jurisdiction with respect to
adjudication of pollution cases based on exceedance of the DENR Effluent


Standards and other acts defined as prohibited under Section 27 of RA 9275 and
filed by this Department. Furthermore, the Department shall coordinate with the
DENR regarding the establishment of protocols for management of all water-
related data being collected by the DENR;

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

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

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

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

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

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

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

(j) 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 DPWH regarding the establishment of protocols for management of all
water-related data being collected by the DPWH and its Bureaus;

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

(I) 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 ail 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 known as 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 NED A, 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 (5) years of granting of such rights: Provided,
further. That applicants for water permits shall submit proof of land ownership of,
or right to use the property where the water source is located; Provided, finally.
That, if the applicant is currently using the water source being applied for
domestic or municipal purposes upon effectivity of this Act, such applicant may
submit such proof of prior use of possession of said property in lieu of ownership
or right to use;

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

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

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

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

(e) Issue subpoena duces tecum and subpoena adtestificandum;

(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;

(g) Hear, receive evidence, and decide on cases falling within its
jurisdiction;
(h) Impose the appropriate sanctions over violations committed by

appropriators in accordance with existing laws, rules and regulations as well as
fixture 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


(I) 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
shalt decide each case or application within thirty (30) days following its formal
submission for resolution. It shall publish and make available for public
inspection all decisions and final orders including those in the adjudication of
contested cases or applications.

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

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

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

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

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

(e) 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;

(f) Investigate, motu proprio, violations of the water rights and the Water
Code;

(g) In the case of violations and conflicts between and among users, file
the necessarily 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 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 II 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 time frame: 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;

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

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

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

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



maintenance of their respective water, sewerage, and septage management
systems.

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

(h) Appraise and value property and equipment used by licensees in
providing water supply and sanitation services and, for this purpose, develop a
database for the value of the property and equipment used by the licensees in
providing water supply and sanitation services by requiring each licensee to
submit, on a 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;

(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;

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

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

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

(0) Amend, modify, suspend, or revoke any license issued by them, after
due notice and hearing, on any of the following grounds: (1) when the facts and
circumstances on the strength of which the license was issued have been
materially misrepresented or have materially changed; (2) where the licensee
has failed to meet or comply with terms, conditions, and performance targets,
including but not limited to service expansion, that may have targets, including
but not limited to service expansions, that may have been set in the license; (3)
where the licensee is found to be manifestly inefficient in the operation of or
provision of water supply and sanitation services in its area; or (4) when the



licensee thereof has violated or willfully refused to comply with any order, rule or
regulation of the Commission or any provision of this Act;

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

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

(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;

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

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

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

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

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

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

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

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

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


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

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

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

(ee) Upon the recommendation of the Department, and after due notice
and hearing, terminate or cancel water permits issued and outstanding as of the
date of the effectivity of this Act to any government or private sector entities to
ensure optimal and efficient use of water resources. The Commission shall
principally rely on the prima facie findings of the Department, acting on the basis
of information, records and reports submitted by any holders of such water
permits as of the effectivity date of this Act, that the water resource covered by
such water permits have not been substantially utilized or no substantial water
works facilities, systems or other infrastructure has been constructed in pursuit
thereof, in each case, 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;

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

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

(hh) Determine the existence of any material adverse government action
which has a material and adverse effect on any of the rights and privileges of, or
on the enjoyment or exercise thereof by the licensees, or which has a material
and adverse effect on the licensees’ ability to comply with their financial or other


contractual obligations to provide water or sanitation services, and determine
the appropriate remedial measures therefor, which may include compensation or
extension of permits or licenses; and

(il) 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.

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

(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 from office except for just cause as specified by law.

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

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

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

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

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

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

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

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

CHAPTER VI
REGISTRATION AND LICENSING

SEC. 27. Registration and Licensing of All Water Supply and Sanitation
Services. - All water supply and sanitation service providers, including bulk
water suppliers and those providing services to subdivisions and other service


providers, shall register with the Commission and, subject to its rules, guidelines,
procedures and other issuances of the Commission, obtain a license to operate
from the appropriate regulatory units: Provided, That the Commission shall act
on the application for the issuance or the conversion of such licenses and
renewals thereof within the maximum period of one (1) year as provided under
this Act or by RA 11032, otherwise known as the Ease of Doing Business and
Efficient Government Service Delivery Act of2018.

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 die
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 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;
(©) Grounds for modification, suspension or cancellation of the License;

(@) Minimum technical performance and service level standards;


(e) 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 representative(s).

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

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

All local water utilities, existing water service providers or holders of CPCN
or CoC shall be duly prioritized in the issuance of the licenses to operate over
the areas where they currently operate or as may be covered by their franchises.
The submission of the CPC, CPCN, provisional authority, or the CoC issued by
the NWRB or LWUA shall be sufficient basis for the issuance of the new and
converted or updated licenses to operate required and contemplated under this
Act. To ensure continuity of service, the Commission shall complete the issuance
of such converted or updated licenses not later than six (6) months from the
effectivity of the implementing rules and regulations issued by the Commission
pursuant to this Act.

All existing providers of water supply and sanitation services without a
legal and valid CPC, CPCN, provisional authority or CoC shal 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:

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

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


generally accepted standards and practices of the water supply and sanitation
industry; and

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

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

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

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

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

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

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

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

SEC. 30. Setting Tariffs, Rates, and Other Charges. — With due regard to
the standardized pricing framework developed by the Department pursuant to
Section 7(h) of this Act, the Commission shall establish tariffs, rates and other
charges which are fair and reasonable, and ensure economic viability and a fair
return on investments. Service providers may apply for the setting of tariffs,
rates and charges based on and consistent with a rate-setting methodology that
the Commission shall, after due consultation, define and publish, taking into
account the following, among others:

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


(b) Efficiency of the service;

(c) Incentives for enhancement of efficiency;

(d) Capacity to pay of the customers/consumers;
(e) Equity 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-extendable 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 die same service area, where it shall result in improved efficiency, service
expansion and lower costs. To this end, the Commission shall establish and issue
such rules and guidelines as may be necessary to (a) create incentives to
encourage efficiency and service expansion; (b) establish the standards and
targets that service providers are required to meet; and (c) define the fines and
penalties that shall be imposed for failure to meet such standards and targets.

CHAPTER 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 Court on certiorari.

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

CHAPTER VIII
INTERDEPARTMENTAL RELATIONS OF THE COMMISSION


SEC. 36. Interface with Other Sector Regulators. -

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

(b) The Commission shall coordinate with the:

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

(2) LGUs for development projects relating to water supply and sanitation;
and

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

CHAPTER IX
TRANSITORY PROVISIONS

SEC. 37. Organizational Structure and Staffing Pattern. - The Secretary of
the Department and the Chairperson of the Commission shall determine the
respective organizational structure and staffing pattern of the Department and
the Commission in accordance with the revised compensation and position
classification system subject to the evaluation and approval of the Department
of Budget and Management and in compliance with the civil service laws, rules
and regulations and other relevant laws.

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

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


equipment, as may be necessary. The heads of the affected agencies shall
continue to serve until replaced.

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

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

SEC. 39. Absorption, Separation or Retirement from Service of Employees
of the Subrogated Agencies. — The current employees of all government
agencies and units whose powers and functions have been transferred to,
absorbed or subsumed by the Department or Commission shall enjoy security of
tenure, in accordance with their staffing pattern and the selection process as
prescribed under RA 6656 or the Government Reorganization Law. Employees
opting to be separated from the service as a consequence of the consolidation,
and reconstitution under the provisions of this Act shail, 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



often percent (10%) of the total proceeds generated from raw water extraction
and all payments for ecosystem services shall be given as share of the
concerned local government unit or indigenous peoples (IP) community who own
the specific areas or land where the raw water was sourced: Provided, further.
That the Department shall prescribe standards for programs and projects where
proceeds from payments for ecosystem services shall be utilized.

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

(a) Promulgate the rules and regulations of the Department and the
Commission necessary for the effective implementation of this Act within one
hundred twenty (120) days after its effectivity; and

(b) Submit to the DBM the Department's and the Commission's budget for
fiscal year following the promulgation of its implementing rules and regulations;
and implement the training of the personnel of the Department and the
Commission.

SEC. 44. Mandatory Review of the Implementation of this Act. - The
Department and the Commission shall conduct a review of the implementation of
this Act at the end of the fifth (5th) year from 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. -
(a) The following provisions are hereby repealed:

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

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

(3) Section 1 of EO 124-A Series of 1987, amending EO 124, dated 30
January 1987, Reorganizing the Department of Public Works and Highways,


.

Redefining Its Powers and Functions, and For Other Purposes on reorganizing the
National Water Resources Council into the National Water Resources Board;

(4) EO 510 series of 2006 creating the RBCO, and EO 516 series of2009
declaring the RBCO under the DENR as lead government agency for die
integrated planning, management, rehabilitation, and development of the
country’s river basins; and

(5) EO 22, Series of2023 creating the Water Resources Management
Office of the DENR.

(b) The following provisions are hereby amended accordingly:

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

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

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

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

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

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

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

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

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

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


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

Approved,