Republic of the Philippines
HOUSE OF THE REPRESENTAT!
Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

168

HOUSE BILL NO.

Introduced by: HON. ERIC D. SINGSON

For more than 30 years now, the Local Water Utilities Administration (LWUA) has been
mandated by law to establish, finance and administer as well as promote and(] develop potable
water systems nationwide

However, under its charter, LWUA’s authorized capital stock is P2.5 Billion and, as early
as 1990, this has already been fully subscribed and paid up by the National Government. Since
then, LWUA has been largely dependent on releases from the National Government as provided
under General Appropriations Act which may be treated as equity contribution of the National
Government in the event that LWUA’s authorized capitalization is increased by law.

This bill, therefore, seeks to increase the authorized capitalization of LWUA from P2.5
Billion to P25 Billion to enable it to pursue its mandate under present times.

Moreover, this Bill also seeks to increase LWUA’s local and foreign borrowing authority
originally set in 1973 amounting to only P1.0 Billion and US$500 Million respectively, to P10
Billion and US$700 Million to ensure the timely availability and arrival of capital funds. The
proposed increase in LWUA’s borrowing authority for both domestic and foreign sources will
enable the agency to achieve its commitment to provide the waterless communities access to
potable water

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



Republic of the Philippines
HOUSE OF THE REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

168

HOUSE BILL NO

Introduced by: HON. ERIC D. SINGSON

For more than 30 years now, the Local Water Utilities Administration (LWUA) has been
mandated by law to establish, finance and administer as well as promote and develop potable
‘water systems nationwide

However, under its charter, LWUA’s authorized capital stock is P25 Billion and, as early
as 1990, this has already been fully subscribed and paid up by the National Government. Since
then, LWUA has been largely dependent on releases from the National Government as provided
under General Appropriations Act which may be treated as equity contribution of the National
Government in the event that LWUA’s authorized capitalization is increased by law

This bill, therefore, seeks to increase the authorized capitalization of LWUA from P2.5
Billion to P25 Billion to enable it to pursue its mandate under present times.

Moreover, this Bill also seeks to increase LWUA’s local and foreign borrowing authority
originally set in 1973 amounting to only P10 Billion and US$500 Million respectively, to P10
Billion and US$700 Million to ensure the timely availability and arrival of capital funds. The
proposed increase in LWUA’s borrowing authority for both domestic and foreign sources will
enable the agency to achieve its commitment to provide the waterless communities access to
potable water.

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



Republic of the Philippines
HOUSE OF THE REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

68

r
HOUSE BILL NO.

Introduced by: HON. ERIC D. SINGSON

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 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
(P25,000,000,000.00) divided into [Twelve] SIXTY-TWO Million Five Hundred
Thousand (62,500,000) shares of stock 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 FINANGE: 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), WHIGH 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 privatet Provided, That its loans outstanding BOTH from domestic AND
FOREIGN sources [at any one time] shall not exceed [One Billion Pesos] AN
AGGREGATE CEILING OF NINE HUNDRED MILLION U.S. DOLLARS (US
$900,000,000): 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 of Section 73 of Presidential Decree. No. 198, as amended, is hereby
further amended to read as follows:

SEC. 73. Authority to Contract Foreign Loan, — The Administration is hereby
authorized to contract loans, credits, in any convertible foreign currency or capital goods, and to
incur indebtedness from time to time with foreign governments, or any international financial
institutions or fund sources, including supplier’s credits or deferred payment arrangements, the
total outstanding amount of which, excluding interests, shall not exceed [five hundred million
USS] ITS AGGREGATE DOMESTIC AND FOREIGN BORROWING
AUTHORITY OF NINE HUNDRED MILLION US DOLLARS
(US$900,000,000) or the equivalent thereof in other currencies, on terms and conditions
promulgated by the Secretary of Finance and the Monetary Board for the accomplishment of its
objectives; and to enter into and execute contracts and other documents specifying such terms
and conditions. The President of the Philippines, [by himself,] or [through] his OR HER duly
authorized representative, is hereby authorized to negotiate and contract with foreign
governments or any international financial institution or fund sources in the name and on behalf
of the administration, one or several loans, for the purpose of implementing the Administration’s
program for the promotion and development of local water utilities through the Administration's
financing or lending operations. “The President of the Philippines, [by himself] or [through] his
OR HER duly authorized representative, is hereby further authorized to guarantee, absolutely
and unconditionally, as primary obligor and not as mere surety, in the name and on behalf of the
Republic of the Philippines, the payments of the loans, credits and indebtedness up to the amount
herein authorized, over and above the amounts which the President of the Philippines pursuant to
loan agreements entered into with foreign governments or any international financing institution
or fund sources. “The loan credits and indebtedness contracted under this section shall be in
accord with the provisions of [the] REPUBLIG AGT NO. 4860, OR THE Forcign
Borrowing Act as amendedf.] (As amended by Sec. 36, PD 768); THE PROVISIONS OF
SECTION 123 OF REPUBLIG ACT NO. 7653, OTHERWISE KNOWN AS
THE NEW GENTRAL BANK ACT; THE PROVISIONS OF SECTION 23 OF
CENTRAL BANK GIRCULAR NO. 1389, AS AMENDED; SECTION 20,
ARTICLE Vil AND SECTION 21, ARTICLE XII OF THE 1987
CONSTITUTION AND OTHER PERTINENT LAWS AND REGULATIONS.”

SECTION 4. Repeating 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,