Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

TWENTIETH CONGRESS
First Regular Session

LA
House Bill No, 3247

Introduced by: REPRESENTATIVE ERIC L, OLIVAREZ

EXPLANATORY NOTE

A 2015 World Resources Institute study warned that the Philippines will likely experience a
“severe water shortage” in the year 2040. This is not surprising given the fact that in the World Bank's
2003 Philippine Environment Monitor, it was already reported that as of year 2000, compared to other
countries in Southeast Asia, the Philippines already ranked 2nd to the lowest in terms on annual
renewable water resources per capita.

Climate change hazards (rainfall variability, increasing temperatures, rising sea level and more
extreme weather) which pose major risks to water resources and a growing population will further
aggravate this situation. PAGASA’s downscaled climate projections have shown that the country's
water resources will be one of the most adversely affected by climate hazards. This highlights the
urgent need to properly plan for and manage our finite water resources in order to meet the increasing
demand of a growing population, continuing economic development amidst many competing users.

The outcome document of the Rio +20 Earth Summit, entitled “The Future that We Want”
emphasized just how important water is by stating that that "Water is at the Core of Sustainable
Development’. It is acknowledged that there can be no development without water; there can be no
life without water. Or to put it more succinctly, Water is Life.

Access to safe and potable drinking water as a basic right was recognized by the United Nations
as one of its Millennium Development Goals (MDGs) In July 28, 2010. 122 countries formally
acknowledged this "right to water" in a UN General Assembly. Barely two months later, the ITN
Human Rights Council adopted a binding resolution recognizing that the human right to water and
sanitation is part of the right to adequate standard of living.

Yet, in the Philippines, as of 2015, more than 12 million people still get water from unsafe
sources. More than four million people do not have access to sanitary toilets and thus, defecate
openly. An additional two million are limited to unimproved sanitation facilities.

As pointed out by the Philippine Water Supply and Sanitation Master Plan (PWSSMP), it is
imperative that these present problems are addressed considering the adverse impacts that unsafe
water supply and polluted waters have on people's health, and the economy.

Based on the 5-year data from the National Epidemiology Center of the Department of Health,
31% of illnesses was water related. It has been estimated that the economic impacts of poor sanitation
to be in the order of US$ 1.4 billion, equivalent to about 1.5% of GDP in 2005 with health impacts
accounting for 72% at USS1B. Episodes of red tides and fish kills in different parts of the country
highlight the extent of the losses of livelihood of our fisher folks from polluted waters. And the recent
closure of Boracay due to severely polluted waters (mainly coming from sewage) also highlights the
adverse impacts of dirty waters on the tourism industry, which is a major contributor to economic
growth.


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

There is an urgent need for an integrated and coordinated planning and implementation of
programs and projects that promote synchronized, sustainable and science-based management of
the country’s water resources that would address the imbalance in water resource utilization, reduced
water availability, declining water quality, recurrent flooding, and other water-related issues in many
parts of the country. This cannot be achieved without addressing the fundamental governance and
institutional issues of the sector.

Consistent with the various studies, plans, and initiatives conducted in the past two (2) decades
which have supported the need for the establishment of a strong apex body for the water resources
sector, the Philippine Development Plan (2017-2022) identified as a primary strategy for the water
supply, sewerage and sanitation subsector the creation of an apex body for water resources
management and the formulation of master plans to address the fragmented structure and that foster
coordinated efforts across the country. This actually holds true for the entire water sector.

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

It is thus proposed that a Department of Water Resources be created to ensure that Filipinos
benefit from this fundamental human right and that this finite resource will be sustained. The
immediate approval of this bill is earnestly sought.

owe CO.
ERIC L. ‘ouvan¥


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

TWENTIETH CONGRESS
First Regular Session

L
House Bill No. 3247

- a

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

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

CHAPTER I
GENERAL PROVISIONS

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

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

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

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

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

(a) Bulk water supplier refers to any entity, natural or juridical, whether public or private,
supplying or intending to supply large quantities of raw or treated water to buyers for their own
consumption, such as industrial companies, or for retail distribution to consumers such as water service
providers or real estate developers managing their own distribution network.

(b) Environmental services refer to qualitative functions of natural non-produced assets of land,
water, and air, including related ecosystems, and their biota, and which may be categorized into three basic
types: (a) disposal services which reflect the functions of the natural environment as an absorptive sink
for residuals; (b) productive services which reflect the economic 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.

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

(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.

(0 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.

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

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


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

(m) River basin refers to an area of land drained by a stream or body of fixed water and its
tributaries which have a common outlet for 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 inclu
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 builtand constructed to carry,
transport, and dispose sewage.

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

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



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

(1) Reduce the quantity or quality of water required to accomplish a specific tas!

(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 |, Il and III water supply including
bulk suppliers, suppliers to subdivisions, and other water service providers (WSPs).
CHAPTER II
‘THE DEPARTMENT OF WATER RESOURCES


SEC. 4. The Department of Water Resources. - There is hereby created and established the
Department of Water Resources, hereinafter referred to as the Department.

SEC. 5. Mandate of the Department. - The Department shall be the primary agency responsible for
the comprehensive and integrated identification and mapping of all water resources, planning, policy
formulation, and management of the ownership, appropriation, utilization, exploitation, development, and
protection of water resources in the Philippines to ensure the optimal use thereof for domestic and
municipal water supply, sanitation, 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 of 2004 shall
be reckoned within five (5) years from the date of promulgation or publication of the septage management
plan formulated by the Department.

SEC. 6. Guiding Principles, - In the pursuit of its mandate, the Department shalll 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 |WRM Framework shall include an enabling environment that utilizes proper policies,
legal instruments, and institutional frameworks for effective implementation, participatory and
collaborative water policy and management decisions, and management instruments for efficient use of
updated and accurate data, science-based decision support systems, proper information, education,
communication programs, assessment and allocation tools, or regulatory functions. It shall observe the


mutual accountability mechanism among stakeholders at the national, regional, and global levels
reinforcing multi-stakeholder decision-making following a framework with specific, measurable,
attainable, relevant, and timely actions;

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

(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 systet

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

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

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

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

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

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

(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, ina manner consistent with the
protection, preservation, and revival of the quality of the country’s water resources, and to adoptall 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;

() 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

(D) 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 an
provision of water and sanitation services.

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

1. Policymaking and Planning

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

(b) Formulate policies, strategies, and targets in coordination with other relevant entities t 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
sues 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 Nationa 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 it 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;

(8 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 an 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 effect 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 systems and practices are integrated into any water
resource management planning, policy making, and the design and construction of water infrastructure;

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

(q) Review existing guidelines appropriate for private sector participation in the water sector and
submit recommendations to the Public-Private Partnership (PPP) Center of NEDA and othe 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;

(5) 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;

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

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

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

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

(x) Ensure that the easements provided for in Title VII, Chapter 2, Section 2 of RA 386, otherwise
known as the Civil Code of the Philippines and other relevant laws are enforced, especially in all the esteros
and waterways, as well as abate the dumping of untreated wastewater and sewage into water bodies,


including all acts and omissions in violation of PD 984, also known as National Pollution Control Decree of
1976, as amended, and other related laws; and

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

IL Resource Allocation and Regulation

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

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

(c) Formulate, promulgate, and enforce rules and regulations for the development and optimum use
of water resources and its administration and management, including coherent water protocols, operating
rules ofall 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;

(a) 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 waste water 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;

jand

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

(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;

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

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

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

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

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

IIL Institutional Arrangement with Public Water Agencies and Organizations

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

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


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

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

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

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

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

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

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

IV. Coordination

(a) Coordinate and integrate water resources development activities of the country within the
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;

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

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

V. Other Functions


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

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

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

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

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

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

(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 the
jurisdiction of the Department;

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

(c) Advise the President on the status of water management and supply in the country, recommend
to the President the declaration ofa 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;

(8 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 toofficials
and employees under his direction as deemed appropriate;

(i) Actas the Chairperson of the governing board of the attached agencies of the Department;

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

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

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

The Secretary of Water Resources shall also serve as a voting member of the 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 of Technical Services;


(d) Legal and Legislative Research Service;

(e) Internal Audit Service;

(8 Public Affairs Service;

(g) Administrative and Human Resources Service;

(h) Flood Control and Drainage Coordination Service;

(i) Comptrollership and Financial Management Service; and
(j) Local Water Service Providers Bureau.

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

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

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

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

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

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

(c) The Laguna Lake Development Authority (LLDA), whose mandate, powers and functions are
defined under RA 4850, as amended entitled “An Act Creating the Laguna Lake Development Authority,
Prescribing Its Powers, Functions and Duties, Providing Funds Therefor, and for Other Purposes” shall be
transferred from the DENR and attached to the Department. The LLDA shall continue to serve as the lake


management and development authority similar to a 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 protectionfunctions
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 of 2006 and EO 816, Series of 2009, as amended:
Provided, That its function pertaining to watershed reforestation activities shall be transferred to the
DENR-Forest Management Bureau, but the targeting of priority watershed areas shall be coordinated with
the Department;

(a) 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

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

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

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

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

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

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

CHAPTER Ill
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 wastewater. Furthermore, the Department shall coordinate with the DA
and its Bureau of Soils and Water Management (BSWM) regarding the establishment of protocols for
management of all water-related data being collected by DA, as well as the outputs of research and studies
by BSWM which may serve as input to policy formulation by the Department;

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

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

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

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

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

(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
Developmentin planning, monitoring and enforcing integrated land use and water resources management
in the Comprehensive Land Use Development Plans and Zoning Ordinances of the LGUs to ensure, among
others, the protection of water sources and that water availability is factored in proposed land use
development plans and projects;


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

(n) All other departments and agencies of the government implementing water-related functions
and projects shall ensure that the programs and projects are consistent with the national water
management plan of the Department.

CHAPTER IV
NATIONAL WATER RESOURCES ALLOCATION BOARD
AND THE RESOURCE ALLOCATION OFFICE

SEC. 18. Reconstitution of the National Water Resources Board (NWRB) as the National Water
Resources Allocation Board. - The NWRB is hereby reconstituted and shall henceforth be 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 NEDA,
Department of Justice, Department of Science and Technology, and the University of the Philippines -
National Hydraulic Research Center as members.

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

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

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

(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;

(8) Issue subpoena duces tecum and subpoena ad testificandum;

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

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

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

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

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

(1) Promulgate its own rules and procedures; and

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

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

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

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

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

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


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

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

(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;

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

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

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

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

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

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

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

CHAPTERV
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
Il and Ill water service providers found performing significantly below prescribed standards shall be
required to submit a Public Service Improvement Plan with committed performance improvements with a
one-year implementation timeframe: Provided, further, That unjustifiable failure to implement provisions
of, or meet commitments in, the Public Service Improvement Plan shall be cause for dissolution,
consolidation, privatization, or management takeover of the local water district: Provided, finally, That the
Commission shall have the power to cause such dissolution, consolidation, privatization, or management
takeover and shall mandate the Department to implement the same;

(©) 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;

(8 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;

(i) 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;

(r) 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 the license, order, rule regulation or requirement
issued by the Commission;

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

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

(z) 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;

(ce) 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;

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

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

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

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

SEC. 23. Composition of the Commission. -

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


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

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

(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 inaccordance with
Civil Service laws, rules, and regulations. Members of the Commission shall enjoy security of tenure and
shall not be suspended or removed from office except for just cause as specified by law.

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

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

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


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

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

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

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

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

CHAPTER VI
REGISTRATION AND LICENSING

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

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

Concession agreements, joint venture agreement, bulk water supply agreements, management and
service agreements, and other contracts for water supply provision and water sanitation and treatment
services currently existing shall remain valid and enforceable unless otherwise terminated, 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;

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

(d) Minimum technical performance and service level standards;

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

(Q Restrictions or conditions for transferability of the business or controlling interest inthe
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 t 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.

Alll 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.

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

SEC. 29. Rights and Duties of Licensees. -
(a) Any person granted a license under this Act shall have the obligation to ensure that license
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 establishe 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;

(@) Capacity to pay of the customers/consumers;

(e) Equity considerations;

(8 Administrative simplicity;

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

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

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

Tariffs, rates and charges set shall be presumed valid and reasonable unless invalidated by the
Commission, after due notice and hearing, acting on a protest or contest duly filed with the Commission to
ensure continuity of service, application for setting of tariffs, rates and other charges shall be decided
within a non-extendible period of ninety (90) days from the date of filing thereof, and the failure of the
Commission to act on any such applications shall result in a provisional approval: Provided, That in no case
shall proceedings on any applications for the setting of tariffs, rates and other charges exceed to a total
period of one hundred twenty (120) days reckoned from the date of filing of the application.

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

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

CHAPTER 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

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

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

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

(a) The orders, rulings, and decisions of the Commission are final and executory unless appealed to
the Court of Appeals within fifteen (15) days from receipt of notice of such order, ruling or decision:
Provided, That orders, rulings, and decisions of the Commission approving 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.

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

CHAPTER VIII
INTERDEPARTMENTAL RELATIONS OF THE COMMISSION

SEC. 36. Interface with Other Sector Regulators. -

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

(b) The Commission shall coordinate with the:

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

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

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


CHAPTER IX
TRANSITORY PROVISIONS

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

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

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

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

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

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

CHAPTER X
FINAL PROVISIONS


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

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

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

SEC. 43. Implementing Rules and Regulations. - Upon the effectivity of this Act, the Department and
the Commission, as may be applicable, as well as 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 6) 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 of 2009 declaring the RBCO under
the DENR as lead government agency for the integrated planning, management, rehabilitation, and
development of the country’s river basins; and

(5) EO 22, Series of 2023 creating the Water Resources Management Office of the DENR.
{b) The following provisions are hereby amended accordingly:

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

(2) Section 154, Article V, Chapter I, Title One, Book Il 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,