Fifteenth Congress of the Republic 
of the Philippines 
First Regular Session 
) 
) 
) 
SENATE 
S. B~ No. 
23 
Introduced by Senator Ramon Bong Revilla, Jr. 
EXPLANATORY NOTE 
The Local Water Utilities Administration (LWUA) has been mandated by law to establish, 
finance and administer as well as promote and develop potable water supply systems used 
nationwide. 
To contribute to the Millennium Development Goals (MDGs) of the government, LWUA 
proposed an investment program for the period 2005-2015 which will amount to P97.6 billion, of 
which an estimated 40% or P39 billion represents the required peso counterpart to be sourced 
from the inadequate LWUA capitalization. In the absence of the GAA funds, LWUA intends to 
source the peso requirement from other local funding source. Hence, the need to immediately 
and drastically increase the agency's capitalization from P2.5 billion to P25 billion. 
After more than thirty years since it was created, LWUA has formed a total of 400 water districts 
covering 680 cities and towns throughout the country. However, this only accounts for only 15 
percent or roughly 13.5 million Filipinos served of the country's projected 2007 population of 
88.7 million (based on NSO data). With this data, 85 percent of the residents in the countryside 
have no access to sufficient supply of safe and potable water. 
While the agency remains committed to provide continuing financial and technical assistance to 
its clientele (the local water districts), specifically to the less credit-worthy water service 
providers, the lack of capitalization restricts the agency's delivery of services unless remedial 
legislation is enacted. 
This bill, therefore, seeks to increase the authorized capitalization ofLWUA from P2.5 billion to 
P25 billion to be able to further respond to the growing need of providing potable water to every 
Filipino in the country. 
In cognizance ofthe urgency and importance of this measure, its passage is earnestly sought. 


Fifteenth Congress of the Republic 
of the Philippines 
First Regular Session 
) 
) 
) 
SENATE 
S. No. 
:2 3 
Introduced by Senator Ramon Bong Revilla, Jr. 
AN ACT 
FURTHER AMENDING PRESIDENTIAL DECREE NO. 198, AS AMENDED, 
OTHERWISE KNOWN AS 
"THE PROVINCIAL WATER UTILITIES ACT OF 1973" 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1: Section 67 of Presidential Decree No. 198, as amended, is hereby further 
amended to read as follows: 
"SEC 67. Capital Stock. - The authorized capital of the Local Water 
Utilities Administration is [Two] TWENTY-FIVE Billion [, Five 
Hundred Million] Pesos (P25,OOO,000,000.00) divided into [Twelve] 
SIXTY-TWO Million Five Hundred Thousand (P62,500,000) shares 
of stocks with a par value of FOUR [Two] Hundred Pesos (P400.00) 
per share which shall be subscribed by the National Government AND 
GOVERNMENT FINANCIAL INSTITUTIONS and opened to 
subscription by private investors [or government financial institutions.] 
SUBJECT TO THE APPROVAL BY THE DEPARTMENT OF 
FINANCE: PROVIDED, THAT ALL SUBSIDIES PREVIOUSLY 
PROVIDED BY THE NATIONAL GOVERNMENT TO LWUA 
AFTER THE FULL SUBSCRIPTION OF THE NATIONAL 
GOVERNMENT OF THE ORIGINAL CAPITAL STOCK OF 
TWO 
BILLION 
FIVE 
HUNDRED 
MILLION 
PESOS 
(P2,500,000,000.00), WHICH WERE USED AS LOANS OUTLAY 
TO WATER DISTRICTS SHALL BE CREDITED AS PART OF 
THE 
NATIONAL 
GOVERNMENT 
PAYMENT 
FOR 
SUBSCRIPTION TO THE ADDITIONAL CAPITAL STOCK OF 
THE ADMINISTRATION: PROVIDED, FURTHER, THAT 
PRIVATE SECTOR INVESTMENTS SHOULD NOT BE MORE 
THAN 
FORTY 
PERCENT 
(40%) 
OF 
THE 
TOTAL 
SUBSCRIBED CAPITAL STOCK." 
SECTION 2: Section 72 of Presidential Decree No. 198, as amended, is hereby further 
amended to read as follows: 
" Sec. 72. Domestic AND FOREIGN Borrowing Authority. - The 
Administration shall have the authority to borrow money from all 
domestic AND FOREIGN loan sources whether government or 
private: Provided, That its loans outstanding BOTH from domestic 
1 


AND FOREIGN SQurces [at any Qne time] shall nQt exceed [One 
BilliQn PesQs] AN AGGREGATE CEILING OF NINE HUNDRED 
MILLION U.S. DOLLARS (USS900,000,000.00): PROVIDED, 
THAT ALL DOMESTIC AND FOREIGN BORROWINGS OF 
LWUA SHALL BE APPROVED BY THE DEPARTMENT OF 
FINANCE (DOF), BANGKO SENTRAL NG PILIPINAS (BSP) 
AND OTHER ENTITIES AS REQUIRED BY PERTINENT 
LAWS AND REGULATIONS." 
SECTION 3: Paragraph 1 QfSectiQn 73 QfPresidential Decree No.. 198, as amended, is 
hereby further amended to. read as fQllows: 
"SEC: 73. AuthQrity to. CQntract FQreign Loan.- The AdministratiQn is 
hereby authQrized to' CQntract lQans, credits, in any convertible fQreign 
currency or capital gQQds, and to incur indebtedness from time to' time 
with fQreign governments, Qr any international financial institutions Qr 
fund ,sources, including supplier's credits or deferred payment 
arrangements, the total outstanding amount of which, excluding interests, 
shall not exceed [five hundred million US$] ITS AGGREGATE 
DOMESTIC AND FOREIGN BORROWING AUTHORITY OF 
NINE HUNDRED MILLION US DOLLARS (USS900,000,000.00) Qr 
the equivalent thereQf in Qther currencies, Qn terms and conditions 
promulgated by the Secretary Qf Finance and the MQnetary BQard fQr the 
accQmplishment Qf its Qbjectives; and to' enter into. and execute CQntracts 
and Qther dQcuments specifying such terms and cQnditiQns. 
"The President Qfthe Philippines, [by himself,] or [thrQugh] his OR HER 
duly authorized representative, is hereby authorized to negQtiate and 
contract with foreign governments or any internatiQnal financial institutiQn 
Qr fund SQurces in the name and Qn behalf of the administratiQn, Qne Qr 
several lQans, for the purpose of implementing the Administration's 
prQgram for the promotiQn and development Qf local water utilities 
through the AdministratiQn' s financing or lending Qperations. 
"The President of the Philippines, [by himself] or [through] his OR HER 
duly authorized representative, is hereby further authorized to guarantee, 
absQlutely and uncQnditiQnally, as primary Qbligor and not as mere surety, 
in the name and on behalf of the Republic of the Philippines, the payments 
Qf the lQans, credits and indebtedness up to the amount herein authQrized, 
over and above the amounts which the President of the Philippines 
pursuant to loan agreements entered into. with foreign governments 0 any 
international financing institution or fund sources. 
"The loan credits and indebtedness contracted under this section shall be 
in accQrd with the provisiQns of [the] REPUBLIC ACT NO. 4860, OR 
THE FQreign BorrQwing Act as amended [.J (As amended by Sec. 36, PD 
768); THE PROVISIONS OF SECTION 123 OF REPUBLIC ACT 
NO. 7653, OTHERWISE KNOWN AS THE NEW CENTRAL BANK 
ACT; THE PROVISIONS OF SECTION 23 OF CENTRAL BANK 
CIRCULAR NO. 1389, AS AMENDED; SECTION 20, ARTICLE 
VIl 
AND 
SECTION 
21, 
ARTICLE 
XII 
OF THE 
1987 
CONSTITUTION 
AND 
OTHER PERTINENT 
LAWS 
AND 
REGULATIONS." 
2 


SECTION 4: Repealing Clause - All or any provisions of the Provincial Water Utilities 
Act of 1973 which are contrary or inconsistent with any provision hereof are hereby deemed 
repealed or modified accordingly. 
SECTION 5: - Effectivity. - This Act shall take effect after fifteen (15) days following 
its publication in two (2) newspapers of general circulation. 
Approved, 
3