, '. 
SIXTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
f!irst Regular Session 
) 
SENATE 
Senate Bill No. 14 0 9 
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INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
The Local Water Utilities Administration (LWUA) performs a vital role in 
providing an efficient delivery of one of the basic needs of man - water. As such 
the agency is tj;isKM to establisl'l, finance alid administer as Well as deVelop 
potable water supply systems throughout the country. 
This bill seeks to increase the capitalization of the LWUA from P2.5 Billion 
to P25 Billion to enable the agency to implement additional potable water supply 
systems nationwide. Presently, more than 80% of the communities in the country 
have no access to safe and potable water. 
Additionally; this measure shall grant authority to the agency to enable 
them to contract domestic and foreign loans . 
Senator 


SIXTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
:St'l1iltl' 
<Off"t "f tit-""min., 
First Regular Session 
) 
'13 
I\lJG 29 
A1 0 :33 
SENATE 
Senate Bill No. 14 a 9 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
FURTHER AMENDING PRESIDENTIAL DECREE NO. 198, AS AMENDED, 
OTHERWISE KNOWN AS "THE PROVINCIAL WATER UTILITIES ACT OF 
1973" 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Section 67 of Presidential Decree No. 198, as amended, is 
hereby further amended to read as follows: 
"sac. 67. 
Capital Stock. - The authorized capital of the 
Local Water Utilities Administration is [Two] TWENTY-FIVE Billion 
[, Five Hundred Million] Pesos (P25,OOO,OOO,OOO.00) divided into 
[[welve] SIXTY-TWO Million Five Hundred Thousand (62,500,000) 
shares of stocks with a par value of FOUR [Two] Hundred Pesos 
(P400.00) per share which shall be subscribed by the National 
Government AND GOVERNMENT FINANCIAL INSTITUTIONS 
and opened to subscription by private investors [or government 
financial institutions] SUBJECT TO THE APPROVAL BY THE 
DEPARTIlilENT OF FINANCE: 
PROVIDED, 
THAT ALL 
SUBSIDIES PREVIOUSLY PROVIDED BY THE NATIONAL 
GOVERNMENT TO LWUA AFTER THE FULL SUBSCRIPTION 
OF THE NATIONAL GOVERNMENT OF THE ORIGINAL 
CAPITAL STOCK OF TWO BILLION FIVE HUNDRED MILLION 
PESOS (~2,500,000,000.00), WHICH WERE USED AS LOANS 
OUTLAY TO WATER DISTRICTS SHALL BE CREDITED AS 
PART OF; THE NATIONAL GOVERNMENT PAYMENT FOR 
SUBSCRI1TPION TO THE ADDITIONAL CAPITAL STOCK OF 
THE 
ADMINISTRATION: 
PROVIDED, 
FURTHER, 
THAT 
PRIVATE SECTOR INVESTMENTS SHOULD NOT BE MORE 
THAN FORTY PERCENT (40%) OF THE TOTAL SUBSCRIBED 
CAPITAL STOCK." 
"SEC. 2. Section 72 Of Presidential Decree No. 198, as amended, is 
hereby further amended to read as follows 
"Sec. 72. Domestic AND FOREIGN Borrowing Authority -
The Administration shall have the authority to borrow money from 
all domestic AND FOREIGN loan sources whether government or 


private: Provided, That its loans outstanding BOTH from domestic 
and FOREIGN sources [at anyone time] shall not exceed [One 
Billion Pesos] AN AGGREGATE CEILING OF NINE HUNDRED 
MILLION U.S. DOLLARS (US$900,OOO,OOO.00): 
PROVIDED, 
THAT ALL DOMESTIC AND FOREIGN BORROWINGS OF 
LWUAS~ALL BE APPROVED BY THE DEPARTMENT OF 
FINANCE (DOF), BANGKO SENTRAL NG PILIPINAS (BSP) AND 
OTHER ENTITIES AS REQUIRED BY PERTINENT LAWS AND 
REGULATioNS." 
SEC. 3. Paragraph 1 of Section 73 of Presidential Decree No. 198, as 
amended, is hereby further amended to read as follows: 
"SEC. 73. 
Authority to Contract Foreign Loan. -
The 
Administration is hereby authorized to contract loans, credits, in any 
convertible foreign currency or capital goods, and to incur 
indebtedness from time to time with foreign governments, or any 
international financial institutions or fund sources, including 
supplier's credits or deferred payment arrangements, the total 
outstandin{ll amount of which, excluding interests, shall not exceed 
[five hundred million US$] ITS AGGREGATE DOMESTIC AND 
FOREIGN BORROWING AUTHORITY OF NINE HUNDRED 
MILLION US DOLLARS (US$900,OOO,OOO.00) or the equivalent 
thereof in other currencies, on terms and conditions promulgated by 
the Secretary of Finance and the Monetary Board for the 
accomplishments of its objectives; and to enter into and execute 
contracts and other documents specifying such terms and 
conditions. 
"The President of the Philippines, [by himself] or [through] 
his or HER duly authorized representative, is hereby authorized to 
negotiate and 
contract with 
foreign 
governments or any 
international financial institution or fund sources in the name and on 
behalf of the administration, one or several loans, for the purpose of 
implementing the Administration's program for the promotion and 
development of local water utilities through the Administration's 
financing or lending institution. 
"The President of the Philippines, [by himself] or [through 
]his OR HER duly authorized representative, is hereby further 
authorized to guarantee, absolutely and unconditionally, as primary 
obligor and not as mere surety, in the name and on behalf of the 
Republic of the Philippines, the payments of the loans, credits and 
indebtedness up to the amount herein authorized, over and above 
the amounts which the President of the Philippines pursuant to loan 
agreements entered into with foreign governments or any 
international financing institution or fund sources. 
'The loan credits and indebtedness contracted under this 
section sh~1I be in accord with the provisions of [the) REPUBLIC 
ACT NO. 4s60, OR THE Foreign Borrowing Act as amended [.] (As 
amended by Sec. 36, PD 768); THE PROVISIONS OF SECTION 
123 OF REPUBLIC ACT NO. 7653, OTHERWISE KNOWN AS 
THE NEvil CENTRAL BANK ACT; THE PROVISIONS OF 
SECTION 23 OF CENTRAL BANK CIRCULAR NO. 1389, AS 
AMENDED; SECTION 20, ARTICLE VII AND SECTION 21, 


ARTICLE XII OF THE 1987 CONSTITUTION AND OTHER 
PERTINENT LAWS AND REGULATIONS." 
SEC. 4. Rlitpealing Clause - All or any provisions of the Provincial Water 
Utilities Act of 1973 which are contrary or inconsistent with any provision hereof 
are hereby deemed repealed or modified accordingly. 
SEC. 5. Effectivity. - This Act shall take effect after fifteen (15) days 
following its publioation in two (2) newspapers of general circulation. 
Approved,