Republic of the Philippines i ) a)
HOUSE OF REPRESENTATIVES { 280CT 2014

Quezon City i. qinpy |
SIXTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. 5152

Introduced by Hon. EUFRANIO C. ERIGUEL, M.D.

AN ACT
CONDONING THE UNPAID BALANCE OF THE LOAN, INCLUDING INTEREST
AND PENALTIES THEREON, SECURED BY THE AGOO WATER DISTRICT
(AWAD) FROM THE LOCAL WATER UTILITIES ADMINISTRATION (LWUA) AND.
USED BY AWAD FOR ITS SYSTEM REHABILITATION

The Agoo Water District (AWAD) started its operations on May 6, 1988 and,
by 1990, total concessionaires reached 960 service connections or 12% of the total
household population of Agoo, La Union. Water supply was generated through the
construction of five (5) wells. On July 16, 1992, a 7.8 magnitude earthquake struck
Luzon causing extensive damage including the water source and facilities of AWAD.
Since then, service connections declined due to inadequate and poor quality of water
supply. As of July 2013, AWAD is operating with only 138 active connections or a
mere 1% of the current households of 13,700 and has only two (2) existing wells in
operation as the three (3) other wells were affected by massive salt water intrusion
caused by the 1990 earthquake

AWAD tried to resuscitate its operations by drawing various loans from
LWUA. AWAD has now incurred an outstanding liability in the amount of
P3,441,360.85 and loan obligations secured from LWWUA which already amount to
P20,639,621.31 or a total amount of P24,080,982.25 which, under present
operations, AWAD can no longer pay. Per Commission on Audit (COA) Annual Audit
Report for calendar year ended December 31, 2013, AWAD has only P12,213.46
cash-in-bank and its average monthly connections is P50,000.00. These amounts
are insufficient to cover its operating expenses, not counting its expenses on
salaries


According to Section 45 of Presidential Decree No. 198 or the Provincial
Water Utilities Act of 1973, a water district may be dissolved by resolution of its
board members provided, however, that prior to the adoption of any such resolution:

“(1) another public entity has acquired the assets of the district and has
assumed all obligations and liabilities attached thereto;

(2) all bondholders and other creditors have been notified and they consent to
said transfer and dissolution; and

(3) a court of competent jurisdiction has found that said transfer and
dissolution are in the best interest of the public,”

In the case of AWAD, the Municipality of Agoo is the said public entity that will
acquire the assets, obligations, and liabilities of the Water District should it be
dissolved in the future. On the other hand, the Municipality has no capacity to pay for
a loan amounting to more than P24,000,000.00 ~ a very large amount that may be
used for more pressing current problems such as education, social services or better
yet, a new water system provider that can provide cleaner, safer water for the people
of Agoo and even the nearby areas

It is incumbent upon this Representation to provide for a more efficient water
system to the municipalities under my jurisdiction but this could not be possible if
these LGU's will be burdened with debts outside of their responsibility. In the end, it
is our people that will suffer. Hence, the passage of this measure is urgently sought

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EUFRAMIO @. ERIGUEL, M.D.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
Second Regular Session

HOUSE BILLNO.__5152

Introduced by Hon. EUFRANIO C, ERIGUEL, M.D.

AN ACT
CONDONING THE UNPAID BALANCE OF THE LOAN, INCLUDING INTEREST
AND PENALTIES THEREON, SECURED BY THE AGOO WATER DISTRICT
(AWAD) FROM THE LOCAL WATER UTILITIES ADMINISTRATION (LWUA) AND.
USED BY AWAD FOR ITS SYSTEM REHABILITATION

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

SECTION 1, Condonation of Loans. - The unpaid balance in the amount of
Twenty Six Million, Two Hundred Twenty Two Thousand, Four Hundred Forty Two
Pesos and Forty Three Centavos (Php 26,222,442,43) of the loan secured by the
Agoo Water District (AWAD) used entirely for its system rehabilitation and
operational assistance, including interest and penalties thereon, is hereby condoned
and thereby forever release AWAD from the payment thereof.

SEC. 2. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in a newspaper of general circulation.

Approved,