f 4
Republic of the Philippines RECkivVeD @
HOUSE of REPRESENTATIVES, Sree! 45 va

Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

6193

House Bill No.

Introduced by Representative GLORIA MACAPAGAL ARROYO

AN ACT GRANTING ONE-TIME CONDONATION OF INTEREST ARREARAGES
AND PENALTIES IN FAVOR OF QUALIFIED LOCAL WATER DISTRICTS (LWDs)
PERTAINING TO THEIR LOANS WITH THE LOCAL WATER UTILITIES
ADMINISTRATION (LWUA)

EXPLANATORY NOTE

This bill seeks to grant a one-time condonation of interest arrearages and penalties
assessed against local water districts (LWDs) pertaining to their late payment or non-
payment of their loan amortizations to the Local Water Utilities Administration (LWUA).

Under Presidential Decree No. 198 (PD 198), as amended, otherwise known as the
“Provincial Water Utilities Act of 1973", it was declared appropriate, necessary and
advisable that all funding requirements of LWDs should be channeled through and
administered by the LWUA, which is responsible for and has the authority to promulgate
and enforce certain rules and regulations to achieve national goals and the objective of
providing the public waterworks services to the greatest number at least cost.

Pursuant to the said national policy and Section 61 of PD 198, as amended, the LWUA
Provides financial assistance in the form of loans to qualified LWDs at reasonable interest
rates to finance the latter’s expansion projects subject to various conditions and
procedures

Ithhas been observed that a number of LWDs which availed of the LWUA’s loans could
no longer make the necessary loan amortizations on time due to lack of funds thereby
incurring substantial loan arrearages, interest arrearages, and penalties and eventually
affecting the quality of services they provide to their concessionaires.

The loan interest arrearages and penalties, if paid, will have to be recovered through the
water rates charged against the LWD's concessionaires for the water supplied to them.

In order for the said LWDs to operate more effectively and efficiently, a one-time
condonation of the interest arrearages and penalties assessed against them by the LWUA
for late payment or non-payment of their loan amortizations has to be undertaken as
another form of assistance to LWDs.

The condonation of the said loan interest arrearages and penalties assessed against the
qualified LWDs would give them some savings which may be re-channeled to other
expansion projects that would eventually contribute to the improvement of the service
they provide to their concessionaires and, more importantly, prevent increase in the water
rates of LWDs.

«He



Hence, the need to grant in favor of qualified LWDs a one-time condonation of interest
arrearages and penalties assessed by the LWUA on their outstanding loans.

In view of the foregoing, passage of this bill is earnestly sought.

GLOR{A MACAPAGAL ARROYO
2" District, Pampanga


Republic of the Philippines
HOUSE of REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

6193

House Bill No.

Introduced by Representative GLORIA MACAPAGAL ARROYO

AN ACT GRANTING ONE-TIME CONDONATION OF INTEREST ARREARAGES
AND PENALTIES IN FAVOR OF QUALIFIED LOCAL WATER DISTRICTS (LWDs)
PERTAINING TO THEIR LOANS WITH THE LOCAL WATER UTILITIES
ADMINISTRATION (LWUA)

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

SECTION 1. Short Title.-This Act shall be known as the "Condonation of Loan Interest
Arrearages and Penalties in Favor of LWDs Act of 2017".

Sec. 2. Declaration of Policy. - \t is hereby declared the policy of the State:

a) To ensure the effective and efficient operation of the LWDs in the country;
and

b) To ensure that the LWDs provide quality service to its concessionaires at
reasonable cost.

Sec.3. Scope. -This Act shall provide framework for the granting of one-time
condonation of outstanding interest arrearages and penalties in favor of qualified LWDs.
The subject interest arrearages and penalties are being assessed by the LWUA against
the said LWDs in connection with their loans with the former that are outstanding as of the
Effectivity of this Act.

Sec. 4. Qualified LWDs. -LWDs that are qualified for the one-time condonation of the
loan interest arrearages and penalties assessed by the LWUA shall be those which have no
enough financial capacity to pay on time their loan amortizations as may be determined by
the LWUA. The LWUA shall come up with an updated list of LWDs, which qualify for the one-
time condonation of loan interest arrearages and penalties.

Sec.5. One-Time Condonation. — The condonation of loan interest arrearages and
penalties shall be undertaken only once to assist qualified water districts in updating their loan
amortizations to the LWUA. After the said condonation, the LWDs benefitted thereby shall no
longer be qualified to another condonation of similar nature in the future

Sec. 6. Implementing Rules and Regulations. - The LWUA shall promulgate the
Implementing Rules and Regulations (IRR) of the Act within six (6) months from the effectivity
of this Act.


Sec. 7. Separability Clause. —If, for any reason, any section or provision of this Act
is declared unconstitutional, other sections provisions, which are not affected by such
declaration shall continue to be in full force and effect.

Sec. 8. Applicability and Repealing Clause. - The provisions of PD 198, as
amended, shall continue to have full force and effect except insofar as they are consistent
with this Act.

Sec. 9. Effectivity Clause. — This Act shall take effect fifteen (15) days following its
complete publication in at least two (2) national newspapers of general circulation and one
(1) local newspaper of general circulation in the autonomous region.

Approved,