NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
)
)
SENATE
S. No. 1428
of :l)f :&;afl:irp
72 OCT 27 P4«0
RECEIVED GV:
Introduced by SENATOR RAMON BONG REVILLA, JR.
AN ACT
RATIONALIZING THE ECONOMIC AND ADMINISTRATIVE REGULATION OF 
WATER UTILITIES, CREATING THE WATER REGULATORY COMMISSION, 
PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
According to data gathered by water.org, out of the 101 million Filipinos, nine 
million rely on unimproved, unsafe and unsustainable water sources and 19 million 
lack access to improved sanitation.1 More than 3 million Filipinos rely on unsafe and 
unsustainable water sources and 7 million lack access to improved sanitation. Despite 
the growing economy, the country still confronts significant challenges on water and 
sanitation access. The country is rapidly urbanizing, and the growing demand for 
adequate water and sanitation services from the communities are still left unmet.
As early as 2010, the government has developed a roadmap to achieve 
universal water and sanitation services coverage by 2028. In the ongoing COVID-19 
global pandemic, millions are still striving to endure the lack of access to life's most 
critical resource - water. Access to safe water is critical to health.
There are many water-related laws; however, enforcement remains weak. The 
water sector is beset with problems such as poor database management and weak 
cooperation among water agencies, regulatory bodies, and LGUs. Currently, there are 
four (4) major economic regulatory agencies for water; the National Water Resources 
Board (NWRB), Local Water Utilities Administration (LWUA), Local Government Units 
(LGUs), and National Agencies which include Industrial Zones and the Metropolitan
1 https://water.org/our-impact/philippines/


Waterworks and Sewerage System (MWSS). There are 580 Water Districts. However, 
according to a 2005 Worid Bank Survey, 125 of these were considered non- 
operationai. In addition, there are over 1,000 LGU Utiiities, 500 Rural Water Supply 
Associations, 200 Cooperatives, and 900 Private Firms.
The regulatory framework for water has many overlaps, and economic 
regulations are provided under a number of different arrangements thereby resulting 
in an unstable and fragmented regulatory framework. The absence of a lead agency 
in the water resource sector, the different coordination systems, functions and 
jurisdictions of the various agencies have made it impossibly hard for water and 
sanitation to be collectively managed. Thus, the establishment of a unified agency that 
would focus on water, sewerage and sanitation is certainly very important.
TTiis bill seeks to rationalize the economic and administrative regulation of 
water utilities through an independent, quasi-judicial body called the Water Regulatory 
Commission. Among its functions are to set the policy for water supply, sewerage and 
septage management; issue and licenses; set, review and approve rates; review and 
suspend contracts; initiate investigations on erring officials through its quasi-judicial 
nature; review and revoke issuances, memoranda and the like that are not in 
accordance with the spirit of the Commission and ensure that the welfare of 
consumers are prioritized. To streamline organizational functions and responsibilities, 
the pertinent regulatory units of the MWSS, NWRB and LWUA will also be transferred 
to the commission. The bill takes cue from a number of prior legislative measures in 
prior Congresses, but includes a number of updated provisions.
In view of the foregoing, the urgent approvai of this bill is earnestly sought.
RAMO
REVILLA, JR.


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
)
)
SENATE
S. No. 1428
Senate
•22 OCT 27 P4
RECEIVED 8\':
Introduced by SENATOR RAMON BONG REVILLA, JR.
AN ACT
RATIONALIZING THE ECONOMIC AND ADMINISTRATIVE REGULATION OF 
WATER UTILITIES, CREATING THE WATER REGULATORY COMMISSION, 
PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
Section 1. Short Title. - This Act shall be known as the " Water Regulatory
2 
Commission Act of2022."
3 
Sec. 2. Declaration of Policy. -It is hereby declared the policy of the State to
4 
recognize, protect and enhance the right of all Filipinos to safe and clean drinking
5 
water as essential to the full enjoyment of life and all human rights by pursuing, in an
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orderly, rational, efficient, and dynamic manner, the attainment of nationwide water
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supply and sanitation services at reasonable rates; as well as, to encourage the
8 
participation and investment of the private sector, both domestic and foreign, in the
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provision of piped-water supply and sanitation services. For this purpose, there is a
10 
need to establish a single agency of government to be invested with ample powers
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for the rational and effective economic regulation of all water supply and sanitation
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systems.
13 
Sec. 3. Objectives. - The Commission shall have the following objectives:
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a) To prioritize and seek the immediate attainment of universal access to safe,
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adequate, affordable and sustainable water supply and sanitation services for all
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Filipinos, and adopt all necessary measures directed towards the realization of human
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right to water;


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b) To accelerate the expansion, improvement and ultimately, efficient provision of
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Level III water supply systems and sanitation services for the entire country, in a
3 
manner consistent with the protection, preservation and revival of the quality of
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the country's water resources
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c) To encourage and enable private sector leadership in the continued growth and
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development of water supply and septage management, and sewerage facilities
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and services;
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d) To create a business and regulatory environment that is level, transparent and
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conducive for public and private domestic and foreign investment in water supply
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and sanitation services;
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e) To provide incentives and/or support to encourage investments, and/or take all
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steps necessary for the provision of affordable access to water supply and
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sanitation services in unserved and underserved areas;
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f) To ensure that water resources allocated to water service providers are used
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efficiently to meet public demand;
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g) To ensure fair, just and reasonable tariffs, rates and charges for water supply and
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sanitation services;
18 
h) To protect the legal and other interests of consumers of water supply and
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sanitation services rendered by public and private sector licensees;
20 
i) To establish an administrative process for economic regulation that is stable,
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transparent and fair, giving due emphasis to technical, legal, environmental,
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economic and financial considerations and with due regard to the observance of
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due process at all times;
24 
j) To develop and maintain a national water utility database using the geographic
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information design (GIS); and
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k) To establish a strong and independent economic regulatory body to ensure
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consumer protection, promote good business practice and competition among
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Service Providers and full public accountability to achieve greater operational and
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economic efficiency.
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Sec. 4. Definition of Terms. - As used in this Act, the following terms are
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hereby defined;


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a) Bulk Water Suppliers - refer to any entity, natural or juridical, whether public or
2 
private, supplying or intending to supply large quantities of raw or treated water
3 
to buyers, who will use it for own consumption such as industrial companies, or
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for retail distribution to consumers such as Water Districts or subdivisions,
5 
managing their own distribution network;
6 
b) Commission — refers to the Water Regulatory Commission;
7 
c) Existing Licensee - refers to any water service and/or sanitation service provider
8 
granted by existing regulatory institutions issued to persons and entities that are
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quaiified to provide water supply and sanitation services for a particuiar service
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area/s;
11 
d) Levels of Water Supply Service - consistent with the definitions provided under
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NEDA Board Resolution No. 12 (Series of 1995), the following shall mean:
13 
1. Level I (point source)-a protected well or a developed spring with an outlet
14 
but without a distribution system, generally adaptable for rural areas where
15 
the houses are thinly scattered. A Level I facility normally serves an average
16 
of 15 households.
17 
2. Level II (communal faucet system or stand posts) - a system composed of
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a source, a reservoir, a piped distribution network, and communal faucets.
19 
Usually, one faucet serves 4 to 6 households. Generally suitable for rural
20 
and urban fringe areas where houses are ciustered denseiy to justify a
21 
simpie piped system.
22 
3. Level III (waterworks system or individual house connection^) - a system
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with a source, a reservoir, a piped distribution network and household taps.
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It is generally suited for densely populated urban areas.
25 
e) License- refers to the Water Supply and/or Sanitation Services Operating License
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that the Commission is authorized to grant and issue to Service Providers;
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f) Licensee - refers to the Service Provider to whom a License is granted by the
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Commission;
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g) LWUA - refers to the Local Water Utilities Administration created under Presidential
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Decree No. 198, as amended;
31 
h) MWSS - refers to the Metropolitan Waterworks and Sewerage System, created by
32 
Repubiic Act 6234;


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NWRB - refers to the National Water Resources Board created by Presidential 
Decree No. 424, as amended by Executive Order No. 124-A;
Regulatory Units - refer to the regulatory offices established under Section 5 of 
this Act to issue Licenses authorizing the operation of Water Supply and Sanitation 
Services; provide, review, determine, fix, and approve water and sewerage tariffs, 
rates and charges that Licensees may impose; and exercise such other functions 
and powers as may be provided hereunder;
Sanitation- as used under this Act, refers only to sewerage, sanitation and septage 
management;
Service Area - refers to the area covered by the water distribution system, 
sewerage and septage management services;
Service Provider - refers to any entity, natural or juridical, whether private or 
public, providing or intending to provide levels II & III water supply, including bulk 
water suppliers; sewerage; and/or septage treatment and disposal services for 
domestic/residential, industrial or commercial use;
Sewerage- refers to any system or network of sanitary pipelines, ditches, channels 
or conduits including pumping stations, lift stations and force mains, service 
connections including other constructions, devices or appliances appurtenant 
thereof, which includes the collection, sanitary piping transport, pumping and 
treatment of water-borne human or animal waste removed from residences, 
buildings, institutions, industrial and commercial establishments to point of 
sewerage treatment plant disposal;
Septage - refers to sludge produced on individual onsite wastewater disposal 
systems, principally septic tanks and cesspools;
Septage Management - refers to the provision of proper collection, septage 
treatment and disposal of septage;
Tariffs - refer to such amounts which may be charged by Licensees of Water 
Supply and/or Sanitation Services for their services based on principles, standards, 
and guidelines established by the Commission;
Water District- refers to government-owned and controlled corporations organized 
under Presidential Decree No. 198, as amended, created primarily to acquire, 
install, operate, maintain and improve water supply and distribution systems for


1 
domestic, industrial and municipal uses of residents and to provide, maintain and
2 
operate wastewater collection, treatment and disposal facilities within the
3 
boundaries of the district; and
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s) Water Supply and/or Sanitation Service - refers to a ny activity comprisi ng of Levels
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II and III water supply, including suppliers to subdivisions and other Service
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Providers; sewerage; and septage treatment and disposal services.
7 
Sec. 5. The Water Regulatory Commission. - There is hereby created and
8 
established an independent, quasi-judicial regulatory body to be named the Water
9 
Regulatory Commission, hereinafter referred to as the "Commission", which shall be
10 
organized within one hundred twenty (120) days after the effectivity of this Act.
11 
The Commission shall be an attached agency to the Office of the President.
12 
The Commission shall have a Board of Commissioners, and shall be vested with
13 
powers and functions, as conferred and set forth hereunder.
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Sec. 6. The Regulatory Units. - The Regulatory Units of the Commission shall
15 
be composed of the Provincial Regulatory Units and the Central Regulatory Unit. The
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Provincial Regulatory Units shall be established by the Commission in accordance with
17 
such rules, regulations, guidelines and standards as the Commission shall issue, and
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as provided hereunder.
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Moreover, the pertinent regulatory divisions or units of MWSS, NWRB and
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LWUA are hereby transferred to the Commission, and they shall collectively comprise
21 
its Central Regulatory Unit for water supply and sanitation services that:
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a) Provide services to more than one province;
23 
b) Are owned, operated and/or maintained by special economic zones and
24 
Metro Manila concessionaires.
25 
Sec. 7. Powers and Functions of the Commission. - The overall authority and
26 
powers of the Commission shall cover and apply to all Service Providers, whether
27 
private or public, providing or intending to provide levels II & III water supply,
28 
including suppliers to subdivisions and/or other Service Providers; sewerage; and/or
29 
septage treatment and disposal services for domestic/residential, industrial or
30 
commercial use.
31 
The Commission shall have the following powers and functions:


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Provide the overall policy directions, strategies and targets to meet the goals and 
objectives for water supply, sewerage and septage management.
Issue and promulgate rules, regulations and guidelines as may be necessary to 
implement and enforce its powers and functions under this Act;
Set and enforce just and reasonable technical standards, classifications and 
measurements of service;
Appoint the central and provincial regulators;
Establish rules and regulations to monitor, avoid and provide remedies for any 
market power abuse or anti-competitive or discriminatory act or behavior by or 
against any participant in the water supply and sanitation sector. Upon finding that 
a market participant has engaged in, or fell victim to such act or behavior, the WRC 
shall act to stop and/or redress the same. Such remedies may, without limitation, 
include the imposition of price controls, issuance of injunctions, requirement of 
divestment or disgorgement of excess profits, invalidation of contracts and 
imposition of fines and penalties pursuant to this Act;
Adopt and require that books, records and accounts be kept and maintained in 
accordance with the prescribed uniform accounting system;
Fix and determine proper and adequate rates of depreciation of properties and 
equipment used in Water Supply and Sanitation Service/s;
Impose and collect annual levies determined as a percentage of gross revenue 
accruing in relation to the licensed activities, and reasonable fees and surcharges 
as may be necessary for achieving the purposes, powers and functions of the 
Commission;
Require the submission reports of finances and operations, verified under oaths by 
the owner or president and secretary of the Licensee;
Determine and require the monitoring and submission of such data, statistics and 
other information from the Regulatory Units and any or all licensees, as may be 
necessary for the effective and efficient exercise of its duties, functions, powers 
and responsibilities;
Investigate, motu propio or upon complaint in writing, any matter concerning the 
operation of the service and require that service be provided in proper and suitable 
manner;


1 
I) Impose penalties and fines against any Licensee or against its owners, directors,
2 
officers, agents or representatives for any violation of this Act or of the license,
3 
order, rule, regulation or requirement issued by the Commission;
4 
m) Require any Licensee to pay the actual expenses incurred by the Commission in
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any investigation if it shall be found that a Licensee violated any provision of this
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Act or of the license, order, rule regulation or requirement issued by the
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Commission;
8 
n) Advise, apprise and coordinate with other relevant agencies of the national or local
9 
government on any matter relating to Water Supply and/or Sanitation Services;
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o) Deputize agents, whether from the public or private sector, to assist in the
11 
performance of any of the powers and functions of the Commission;
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p) Upon appeal and after due hearing, appoint an interim or temporary management
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committee to ensure continuity of service in case a Licensee fails to meet the
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conditions of the license and the concerned Regulatory Unit fails or refuses to
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appoint an interim management committee, as provided in the following section;
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q) Appoint, hire and maintain adequate staff and personnel, advisers, and/or
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consultants, with suitable qualifications and experience, as necessary;
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r) Original and exclusive jurisdiction over all cases contesting rates, fees, fines and
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penalties imposed by the Regulatory Units in the exercise of their powers, functions
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and responsibilities, as set forth herein, and over all cases involving disputes
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between and among participants or stakeholders in the Water Supply and
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Sanitation services; and
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s) Such other incidental powers and functions, as may be necessary to attain the
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objectives of this Act.
25 
Sec. 8. Powers and Functions of the Regulatory Units. - The Regulatory Units
26 
of the Commission shall have the following powers and functions:
27 
a) Subject to the review and approval of the Commission, issue and promulgate
28 
rules, regulations and guidelines as may be necessary to implement and enforce
29 
its powers and functions under this Section;
30 
b) Issue Licenses authorizing the operation of Water Supply and Sanitation
31 
Services in any specified area or areas within the Philippines;


1 
c) Impose fines, charges and other penalties upon any Provider and/or its officers
2 
and stockholders who shall fail or refuse to register and/or obtain a License
3 
prior to operation or commencement of business, as provided hereunder;
4 
d) Consistent with rules, guidelines, procedures and methodologies which the
5 
Commission shall provide, review, determine, fix, and approve proposed water
6 
and sewerage tariffs, rates and charges that Licensees may impose upon their
7 
customers/consumers;
8 
e) Appraise and value property and equipment used by Licensees in providing
9 
water supply and sanitation service/s;
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f) Enforce technical, financial and other performance standards set by the
11 
Commission for licensees/utilities;
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g) Respond to consumer complaints and ensure the adequate promotion of
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consumer interests;
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h) Investigate accidents, directly or indirectly, arising from or connected with the
15 
maintenance or operation of the service, 
and make such order or
16 
recommendation as the public interest may warrant;
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i) Upon petition or motu propio where in its determination public interest so
18 
dictates, require the review and/or approval of contracts or agreements that
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may impact on the tariff and rates of service provision entered into by Service
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Providers;
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j) Require the submission of reports, plans and other documents that set out the
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performance targets of the licensees/utilities, and regular accomplishment
23 
reports;
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k) Impose and collect annual levies determined as a percentage of gross revenue
25 
accruing in 
relation to the licensed 
activities, and reasonable 
fees and
26 
surcharges, as may be necessary for 
achieving the purposes, powers and
27 
functions of the regulator;
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I) Conduct benchmarking and monitor the performance of licensees/utilities under
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their jurisdiction, and publish reports detailing the results thereof, as may be
30 
necessary or required by the Commission;
31 
m) Amend, modify, suspend or revoke any License issued by them, after due notice
32 
and hearing, on any of the following grounds: 1. When the facts and


1 
circumstances on the strength of which the license was issued have been
2 
misrepresented or has materially changed; 2. Where the Licensee has failed to
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meet or comply with terms, conditions and performance targets - including but
4 
not limited to service expansion - that may have been set in the license; 3.
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Where the Licensee is found to be manifestly incompetent in the operation of
6 
or provision of Water Supply and Sanitation services in its area; or 4. When the
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holder thereof has violated or willfully refused to comply with any order, rule
8 
or regulation of the Commission or any provision of this Act;
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n) Appoint an interim management committee to ensure continuity of service, in
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case a licensee fails to meet conditions of the license; and
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o) Submit performance plans and reports as required by the Commission.
12 
Sec. 8. Composition. - The Commission shall be a collegial body composed of
13 
five (5) full-time members composed of a Chairperson and four (4) members. The
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Chairperson and the Commissioners who shall have the rank equivalent of cabinet
15 
secretary and undersecretary, respectively, shall be appointed by the President.
16 
All members of the Commission must be citizens and residents of the
17 
Philippines, of good moral character, recognized integrity and competence in the field
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of law, business, commerce, finance, accounting or public administration, water or
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utility economics, management, physical or engineering services, hydrology and other
20 
related services, with at least ten (10) years actual and distinguished experience in
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their respective fields of expertise; Provided, That out of the four (4) members of the
22 
Commission, at least one (1) shall be a member of the Philippine Bar with at least ten
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(10) years experience in the active practice of law, and at least one (1) shall be a
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certified public accountant with at least ten (10) years experience in active practice.
25 
The term of office of the Chairperson and the Commissioners shall be seven (7)
26 
years without reappointment. Of the first set of appointees, the Chairperson shall hold
27 
office for seven (7) years and of the first four (4) Commissioners, two (2) shall hold
28 
office for a term of seven (7) years and two (2) for a term of five (5) years. In case a
29 
vacancy occurs before the expiration of the term of office, the appointment to such
30 
vacancy shall only be for the unexpired term of the predecessor. The Chairperson and
31 
the Commissioners shall enjoy security of tenure and shall not be suspended or
32 
removed from office, except for just cause as provided by law.


1 
The Commission shall meet as often as may be necessary on such day or days
2 
as the Chairperson may fix. The presence of at least three (3) members of the
3 
Commission shail constitute a quorum, which shall be necessary for the transaction of
4 
any business. The affirmative vote of majority of the members of the Commission,
5 
where a quorum is present, shall be necessary for the adoption of any order,
6 
resolution, decisions, or other act of the Commission in the exercise of its quasi-judicial
7 
functions; Provided, That in promulgating rules, regulations, guidelines and in the
8 
exercise of its quasi-legisiative functions, an affirmative vote of three (3) members
9 
shall be required.
10 
The Chairman of the Commission shall exercise general executive control and
11 
supervision of the Commission and its members, staff and personnel, agents and
12 
representatives.
13 
The staff and personnel positions of the WRC shall be filled by regular
14 
appointments, in accordance with a staffing plan to be prepared by the Commission.
15 
Within three (3) months from the creation of the WRC and the appointment of all
16 
Members of the Commission, the Chairman shall submit for the approval by the
17 
President of the Philippines the new organizational structure and plantilla positions
18 
necessary to carry out the powers and functions of the Commission, including those
19 
of the Central and Provincial Regulatory Units.
20 
The Chairman and members of the Commission or any of their relatives within
21 
the fourth civil degree of consanguinity or affinity, legitimate or common law, shall be
22 
prohibited from holding any interest whatsoever, either as investor, stockholder,
23 
officer or director, in any company or entity engaged in the business of transmitting,
24 
generating, supplying or distributing any form of energy and must, therefore, divest
25 
through sale or legal disposition of any and all interests in the water sector upon
26 
assumption of office.
27 
Sec. 9. Executive Director. - The WRC shail appoint an Executive Director who
28 
shall head the WRC Secretariat, keep and maintain the official record and report of
29 
the proceedings of the Commission, and have the authority to administer oaths in all
30 
matters falling within the jurisdiction of the Commission.
31 
The Executive Director shall be responsible for the effective implementation of
32 
the policies, plans, programs, rules, regulations and directives of the Commission;
10


1 
coordinate and supervise the activities of the different operating units under the
2 
Commission; and perform such functions as may be assigned by the Chairperson
3 
and/or other members of the Commission.
4 
Sec. 10. WRC Secretariat - The Commission shall also establish a Secretariat,
5 
which shall provide the Commission with technical and other support including, among
6 
others:
7 
a) Providing the necessary technical inputs and secretariat support to the
8 
Commission to facilitate the conduct of its functions;
9 
b) Coordinating with Regulatory Units to ensure proper implementation of the rules,
10 
regulations and guidelines promulgated by the Commission;
11 
c) Monitoring and assessing activities of the Regulatory Units vis-a-vis their
12 
respective annual performance plans and targets;
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d) Maintaining a database on the WSS sector; and
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e) Coordinating with other relevant agencies of the national or local government on
15 
any matter relating to WSS.
16 
Sec. 11. Compensation and Other Emoluments. - The compensation and other
17 
emoluments for the members and personnel of the Commission shall be
18 
exempted from the coverage of Republic Act No. 6758, otherwise known as
19 
the "Salary Standardization Act" For this purpose, the salaries and other
20 
emoluments of the Chairperson, the Commissioners, and personnei of the
21 
Commission shall be set based on an objective classification system, taking
22 
into consideration the importance and responsibilities attached to the
23 
respective positions, and shall be submitted to the President of the Philippines
24 
for his approval.
25 
Sec. 12. Registration and Licensing of AH Water Supply and/or Sanitation
26 
Services- All Water Supply and/or Sanitation Service Providers, including Bulk Water
27 
Suppliers and those providing services to subdivisions and/or other Service Providers,
28 
shall register with the Commission and, subject to such rules, guidelines, procedures
29 
and other issuances as the Commission may issue, obtain a License to operate from
30 
the appropriate Regulatory Units.
31 
The Commission shall also ensure that the granting and revocation of licenses
32 
are carried out fairly, transparently, and without discrimination. Its issuances shail
11


1 
therefore specify, among others, the qualifications, requirements and procedure for
2 
the granting and revocation of Licenses, as well as the standards and performance
3 
targets that must continuously be complied with in order to keep such licenses valid.
4 
Unless otherwise provided herein or by the Commission, no pubiic Water Supply
5 
and/or Sanitation Service provider shail commence or conduct the business of
6 
providing water supply and sanitation services without first obtaining a license.
7 
Concession agreements and other contracts for water supply provision currently
8 
existing shall remain valid and in force, unless otherwise invalidated by the
9 
Commission where public interest so dictates, after due notice and hearing.
10 
Sec. 13. Conditions of License. - The Commission and/or the concerned
11 
Regulatory Unit, may impose such conditions in the issued License, as it may be deem
12 
necessary, such as but not limited to:
13 
1) Tariffs, rates and charges that may be imposed from its
14 
customers/consumers;
15 
2) Term fixing the duration of the priviiege;
16 
3) Grounds for modification, suspension or cancellation of the License;
17 
4) Minimum technical performance and service level standards;
18 
5) Expansion targets and service level improvements over time;
19 
6) Restrictions or conditions for transferabiiity of the business or controlling
20 
interest in the business;
21 
7) Reportorial requirements and obligations of the grantee;
22 
8) Submission to annual performance audit by the Commission or its duly
23 
authorized representative(s).
24 
The Commission shall specify the requirements and procedure for existing
25 
holders of Certificate of Pubiic Convenience/Certificates of Public Convenience and
26 
Necessity issued by NWRB, and/or Conformance issued by LWUA, to convert their
27 
existing certificates into Licenses issued by the Commission.
28 
All existing providers of Water Supply and/or Sanitation Services without a legal
29 
and valid Certificate of Public Convenience/Certificate of Public Convenience and
30 
Necessity or Certificate of Conformance shail register with the Commission and apply
31 
for a License within six (6) months from the effectivity of this Act.
32 
Sec. 14. Rights and Duties of Licensees.-
12


1 
a) Any person granted a License under this Act shail have the obligation to ensure
2 
that its licensed activities are conducted so as to further the public interest and, in
3 
particular, that they:
4 
1. Foster the maintenance and development of efficient, coordinated, and
5 
viable operation of their licensed activities;
6 
2. Ensure that their Water Supply and/or Sanitation Services are provided in a
7 
diligent, conscientious and workmanlike manner, in accordance with
8 
applicable laws, and the standards and practices set by the Commission and
9 
generally accepted in the Philippines and inter-water 
supply and/or
10 
sanitation industry;
11 
3. Comply with drinking water quality requirements and other requirements
12 
and standards that may be set by the Commission; and
13 
4. Not abandon its service without notice to and approval by the Commission.
14 
b) Any person granted a License under this Act shall, to the extent allowed by law
15 
and specified in the License, have the right to acquire or lease land and lay or
16 
repair water or sanitation and other relevant facilities in public ways, when required
17 
to fulfill their obligations.
18 
c) Subject to any condition or limitation laid down in the License, a Licensee may
19 
disconnect the supply of Water Supply and/or Sanitation services to a customer, if
20 
such customer defaults in the payment of amount(s) due to that Licensee in
21 
respect of water supplied or sanitation services provided, or for acts of pilferage
22 
pursuant to Sections 8, 9, 10, and 11 of Republic Act No. 8041, otherwise known
23 
as the "Water Crisis Act of1995."
24 
d) Any License issued under this Act shall contain provisions designed to ensure that
25 
Licensees:
26 
1. Publish the Tariff and other charges approved by the Commission, and other
27 
terms and conditions imposed by the Commission for the provision of Water
28 
Supply and/or Sanitation Services.
29 
2. Prepare, within three (3) months from the issuance of a License, in
30 
consultation with its customers, a customer service code specifying the
31 
manner and procedure for: (a) metering, billing, and collection of the
32 
Licensee's approved tariff and other charges, (b) disconnection or
13


1 
suspension of service in case of non-payment of tariffs and/or other
2 
charges, or acts of pilferage, and (c) recommendation and recovery of
3 
arrears in tariffs and other charges; and
4 
3. Maintain financial accounts in accordance with the manner and procedure
5 
specified in the License and as may be required by the Commission.
6 
e) Maintain and, upon request by anyone during regular office hours, promptly make
7 
available for scrutiny and inspection such data, statistics and other information, as
8 
may be required by the Commission.
9 
Sec. 15. Setting Tariffs, Rates and Other Charges. - Regulatory Units shall
10 
establish tariffs, rates and other charges which are fair and reasonable and which
11 
provide for the economic viability of the service and a fair return on their investments
12 
considering the prevailing cost of capital in the domestic and international markets.
13 
Such tariffs, rates and charges shall be based on and consistent with a rate-
14 
setting methodology that the Commission shall, after due public consultation, define
15 
and publish consecutively for three weeks in newspapers of general circulation, taking
16 
into account the following, among others:
17 
a) Reasonable and prudent capital and recurrent costs of providing the
18 
service, including a reasonable rate of return on capital;
19 
b) Efficiency of the service;
20 
c) Incentives for enhancement of efficiency;
21 
d) Willingness to pay of the customers/consumers;
22 
e) Equity considerations; and
23 
f) Administrative simplicity
24 
Tariffs, rates and charges set by the Regulatory Units shall be presumed valid
25 
and reasonable, unless a protest or contest is filed with the Commission.
26 
Sec. 16. Promotion of Innovative Schemes to Improve Efficiency and
27 
Management of Systems. - The Commission shall promote innovative schemes,
28 
including but not limited to, the consolidation and/or integration of Water Supply
29 
and/or Sanitation Services and/or Providers in the same Service Area, where it will
30 
result in improved efficiency, services expansion and/or lowering of costs.
31 
To this end, the Commission shall establish and issue such rules and guidelines
32 
as may be necessary to (a) create incentives to encourage efficiency and service
14


1 
expansion, (b) establish the standards and targets that service providers are required
2 
to meet, and (c) set the fines and penalties that would be imposed for failure to meet
3 
such standards and targets.
4 
Sec. 17. Twelve percent (12%) investment capital. - Pursuant to
5 
Commonwealth Act No. 146, as amended, otherwise known as the "Public Service
6 
Act, "shall further provide that any and ail government agencies or such private sector
7 
concessionaires, agents, operators, contractors and the like delivering public services
8 
to the people must be subjected to the Twelve (12%) cap financial formula on Return
9 
of Investment.
10 
Furthermore the Commission on Audit (COA) is hereto designated as the sole
11 
and official Auditor to determine the Actual Physical Investments of such government
12 
agencies or private sector concessionaires, operators, agents, contractors and the like
13 
delivering public services to the people for purposes of computing the Twelve (12%)
14 
Return on Investment Cap.
15 
Sec. 18. Proceedings Before the Commission. - For the purpose of any
16 
investigation, inquiry or proceeding, the Commission shall have the requisite power
17 
to:
18 
a) Issue subpoena duces tecum and subpoena duces tecum ad testificandum;
19 
b) Appoint a Commissioner to hear and receive evidence on behalf of the
20 
Commission;
21 
c) Cite any person or party for contempt for refusal to appear, testify or comply
22 
with an order of the Commission on any matter that is the subject of
23 
investigation, inquiry or proceeding before the Commission.
24 
Sec. 19. Orders and Decisions of the Commission. - The orders, resolutions and
25 
decisions of the Commission, which must be reached as promptly and expeditiously
26 
as reasonably and fairly possible, shall be in writing and shall state clearly and
27 
distinctly the facts and law on which it is based. The Commission shall publish and
28 
make available for public inspection all decisions and final orders in the adjudication
29 
of contested cases or applications.
30 
Sec. 20. Appeals Procedure and Prohibition Against Injunction. - The orders,
31 
rulings, and decisions of the Commission are final and executory, unless appealed to
32 
the Court of Appeals within fifteen (15) days from receipt of notice of such order.
15


1 
ruling or decision; Provided, That orders, rulings, and decisions of the Commission
2 
approving tariffs shall be immediately executory and may be suspended only upon
3 
appeal and filing of a bond, in an amount to be fixed by the Commission, to answer
4 
for damages occasioned by the suspension or stay of execution of such orders, rulings,
5 
and decisions. No injunction may be issued by any court or administrative agency to
6 
restrain any proceeding before, or the implementation or execution of any order,
7 
ruling, or decision of the Commission, except on the basis of a question of law brought
8 
before the Supreme Court on certiorari. Subject to Sec. 7, paragraph 3 of this Act, an
9 
act or decision of the Commission shall not be invalid merely because of a defect or
10 
irregularity in, or in connection with, the appointment or vacancy in the Office of the
11 
Chairperson or any other member of the Commission.
12 
Sec. 21. Interface with Other Sector Reguiators. -
13 
a) The Department of Environment and Natural Resources (DENR) shall
14 
continue to have the primary authority and responsibility for
15 
protecting the environment and the quality water sources from waste
16 
and pollution and shall promulgate rules, regulations, and standards
17 
in this regard.
18 
b) The Department of Health (DOH) shall have primary authority and
19 
responsibility for determining and enforcing drinking water quality
20 
and sanitation standards. The Commission shall coordinate with the
21 
DOH in this regard, and shall ensure the consistency of the standards
22 
and targets that it will set for compliance by licensees with the DOH's
23 
mandated standards.
24 
c) The Commission shall coordinate with the NWRB for water allocation
25 
and data collection, the local government units for development
26 
projects relating to water supply and sanitation, and the Department
27 
of Public Works and Highways (DPWH) for flood control and the
28 
harnessing and impounding of water.
29 
Sec. 22. Transfer of Rights and Obiigations. — The Commission shall, by virtue
30 
of this Act, be subrogated to all the rights, and assume all the obligations, of the Water
31 
Utilities Division of the NWRB, the Regulatory Offices of MWSS and LWUA, the
32 
Regulatory Units of all special economic zones, and all other government agencies and
16


1 
units whose powers and functions have been transferred to the Commission. The
2 
transfer of powers and functions in the Department and agencies attached thereto, as
3 
herein provided for, shall take effect within six (6) months after the effectivity of this
4 
Act. The foregoing transfer of powers and functions shall include all applicable funds,
5 
personnel, records, property and equipment, as may be necessary. The same shall
6 
apply to agencies which have been attached to the Department by virtue of this Act.
7 
As such, all offices under the Department and all attached agencies affected by
8 
the provisions of this Act shall continue to function under their present mandates until
9 
transition is effected as provided for under this Act. The heads of the agencies shall
10 
continue to serve until replaced as provided for under this Act. All rights and
11 
obligations of the said government agencies are hereby transferred to and assumed
12 
by the Commission, and shall be acted upon, in accordance with the rules and
13 
regulations of the Commission on Audit (COA) and other pertinent laws, rules, and
14 
regulations.
15 
Sec. 23. Separation from Service. - Employees separated from government
16 
service as a result of this Act shall be entitled to the benefits which they may receive
17 
under existing laws, rules and regulations.
18 
Sec. 24. Appropriations and Use of Fees, Charges and Penalties. - The initial
19 
budgetary requirements of the Commission of three hundred million pesos
20 
(P300,000,000.00) is hereby appropriated. All fees, fines, penalties collected by the
21 
Commission and its Regulatory Units shall not be retained by the Commission, but wiil
22 
be remitted to the National Treasury and shall accrue to the general funds. Such funds
23 
necessary for the continuous and effective operation of the Commission shall be
24 
included in the annual General Appropriations Act.
25 
Sec. 25. Transparency Clause. - Final decisions, orders and rulings of the
26 
Commission shall be published on the official website. Records of public proceedings
27 
shall be made available to the public.
28 
Sec. 26. Effectivity. - This Act shall take effect immediately upon its approval.
29 
The Chairman of the Commission shall, after due consultation with stakehoiders,
30 
promulgate such other rules and regulations as may be necessary and appropriate to
31 
implement this Act.
17


1 
Sec. 27. Separability Clause. - In the event that any provision of this Act is
2 
declared unconstitutional, invalid, or illegal, the constitutionality, validity, or legality of
3 
the remainder of the provisions of this Act shall not be affected thereby.
4 
Sec. 28. Repealing Clause. - The provision with respect to fixing of water rates
5 
and sanitation service fees of Section 3 (h) and Section 12, and regulation of
6 
waterworks and deep wells of Section 3 (n), regulation of waterworks and sanitation
7 
systems in privately owned subdivisions of Section 3 (p) of Republic Act 6234, as
8 
amended, is hereby repealed or modified accordingly.
9 
Section 62 on regulation and Section 63 on rate review of Presidential Decree
10 
198, as amended by LOI700 (1978), LOI 744 (1978), EO 124 (1987), EO 123 (2002),
11 
is hereby repealed or modified accordingly.
12 
The provisions of the Local Government Code and its Implementing Rules and
13 
Regulations (IRR), which allow local government units to fix the rates of water utilities
14 
owned, operated and maintained by them within their jurisdiction, is hereby repealed
15 
or modified accordingly.
16 
Section 13 (b) on regulation of enterprises in ECOZONE under RA 7916, as
17 
amended, or the "Special Economic Zone Act of1995, "as amended, is hereby repealed
18 
or modified accordingly.
19 
"Provisions under Section 69 of RA 9593, or the " Tourism Act of2009"its
20 
IRR which mandates the Tourism Infrastructure and Enterprise Zone Authority to grant
21 
franchises, supervise the operation of public utilities, and register, monitor and
22 
regulate enterprises within Tourism Enterprise Zones, are hereby repealed or modified
23 
accordingly."
24 
Commonwealth Act No. 146, as amended, otherwise known as the "Public
25 
Service Act," and all laws, decrees, rules and regulations, or portion thereof,
26 
inconsistent with this Act are hereby repealed or modified accordingly.
27 
All other laws, decrees, rules and regulations and executive orders that are
28 
contrary to or inconsistent with this Act are hereby repealed or modified accordingly.
29 
Sec. 29. Effectivity Clause. - This Act shall take effect after fifteen (15) days
30 
following its complete publication in the Official Gazette or in two (2) newspapers of
31 
general circulation in the Philippines.
Approved,
18