User:Watersanitationandsupply/sandbox

''This article has last been updated in November 2015. However, some sections of the article may still contain data from sources of an older date. Please feel free to update any part of this article as deemed necessary.''

Water supply is the process of providing water in a systematic way through installed pumps and pipe lines. Before water is provided to a specific area, it undergoes a process called sanitation to ensure that the quality of water received is safe for human consumption. The Philippines’ water supply system dates back to 1946 after the country achieved its independence. Government agencies, local institutions, non-government organizations, and other corporations are primarily in charge of the operation and administration of water supply and sanitation in the country.

Water Resources
The Philippines’ main sources of water are rivers, lakes, river basins, and groundwater reservoirs. The longest and largest river, Cagayan River, discharges approximately 53, 943 million cubic meters of water annually. Its groundwater reserves are 47, 895 million cubic meters replenished by rainfall and seepage from rivers and lakes. The lakes are utilized mainly for fish cultivation. The four major groundwater reservoirs are in Cagayan, Central Luzon, Agusan, and Cotabato. There are 438 major dams and 423 smaller dams. Dams and reservoirs are mainly used for: water storage, water supply, irrigation, regulation of flood, and hydropower.

The Manila metropolitan area water is mostly supplied by the Angat Dam, Ipo Dam, and La Mesa Dam (also known as Angat-Ipo-La Mesa water system). Some of the well known and larger dams in rural areas are: Ambuklao Dam, developed for flood control, irrigation, and hydroelectric power source of Baguio and some places in Luzon; and Magat Dam, a major source of irrigation water and hydroelectric power in Isabela.

Uses
In 2000, as a whole, 28.52 billion m³ of water were withdrawn from various sources in the Philippines, of which 74% were used for agricultural purposes. Industry used another 9%, leaving 17% or 4.8 billion m³ for domestic consumption, resulting in an average water production of 175 liters per day per capita (l/d/c). In a 2004 sample of 45 water service providers, the NWRB found an average consumption of 118 l/d/c. The highest consumption was recorded in the East Zone of Metro Manila with 232 l/d/c.

Agricultural
Agricultural water management in the Philippines primarily focuses on the subject of irrigation. The country has 3.126 million hectares of irrigable land, 50% (1.567 million hectares) of which already has irrigation facilities. 50% of irrigated areas are developed and operated by the government through the National Irrigation System (NIS). 36% is developed by the government and operated by irrigators’ associations through the Communal Irrigation System, while the remaining 14% is developed and operated by individual or small groups of farmers through a Private Irrigation System (PIS).

Industrial
The use of water for industrial purposes includes the “utilization of water in factories, industrial plants and mines, and the use of water as an ingredient of a finished product.” Industries that are found to be water-intensive are involved in the manufacturing of food and dairy, pulp and chemical products, and textile materials. These industries are usually found in the National Capital Region, CALABARZON, and Region III. In a study by the United Nations Industrial Development Organization (UNIDO) in 1999, the intensive use of water in industry is critical in terms of the production of hazardous wastes. Thousands of tons solvent wastes, heavy metals, lubricants, and intractable wastes are improperly disposed of annually in Metro Manila.

Domestic
According to a study by David and Inocencio, the use of different water sources is dependent on the income class of a certain household. Higher income brackets usually rely on private waterworks as a source of water, while lower income brackets usually consume less by depending on vended water. Lower income households pay much higher water prices than higher income households because of their lack of access to water service providers.

Levels of water systems
According to a 2005 World Bank study, approximately 5,000 service providers exist in the Philippines. Most of them only provide water, while sanitation is still expected to be a private responsibility. The water infrastructure provided is classified into three levels.

Service providers
According to the Joint Monitoring Program (JMP) for Water Supply and Sanitation of UNICEF and WHO, access to an improved water source increased from 85% in 1990 to 92% in 2010.

Local Government Units
Most households in the Philippines are served by their Local Government Units (LGUs), either directly through a city or municipal engineering department or through community-based organizations (CBOs). CBOs involved in water supply include 200 cooperatives, 3,100 Barangay Water and Sanitation Associations (BWSAs) and 500 Rural Water Supply Associations (RWSAs). CBOs usually operate Level I or Level II water supply systems with support from national governments or non-governmental organizations (NGOs). In many cases, the CBOs later convert those facilities into Level III supply systems. Where the service is carried out directly by the local government, the provision receives less external support and thus is often characterized by a severe lack of technical, financial, and management capabilities. Typically, all LGU-operated arrangements do not recover their full costs and rely heavily on local government subsidies.

Water Districts
A water district is a utility that is legally and financially separate from the municipality. In urban areas outside of Metro Manila, water districts served around 15.3 million people in nearly 861 municipalities in 2011. To form a water district, the local government needs confirmation from the Local Waterworks and Utilities Administration (LWUA), a specialized lending institution for provincial waterworks, from which it will receive technical assistance and financial support. The local government appoints the board members of the water districts. This system typically has better performance and higher cost recovery than water systems that are run directly by municipalities. The Philippine Association of Water Districts (PAWD), created in 1974, fosters the exchange of experiences between water districts and provides training to its members. In 2010 USAID and the ADB agreed to support PAWD in establishing a national Water Operators Partnerships (WOPs) program that will promote twinning partnerships among Water Districts.

Large-scale Private Operators
In Metro Manila, the service has been carried out by two concessionaires since 1997: The Manila Water Company in the East Zone and Maynilad Water Services, Inc. in the West Zone. Although national governments have supported PSP since the 1990s, there are few arrangements outside of Metro Manila. This lack of success may partly result from the problems of the Metro Manila concession. Joint ventures exist in Tagbilaran City and in Subic Bay. These private water service providers provide Level III services together with water districts.

Small-scale independent providers
A significant share of the population in urban areas receives services from small-scale independent providers. It was estimated that before privatization in the late 1990s, 30% of the population of Metro Manila depended on them, many of them buying water in bulk from the utility to sell it on to individual users. There are also some cases of cooperation by concessionaires and independent providers. In August 2007, 250 small-scale providers formed the National Water and Sanitation Association of the Philippines (NAWASA) as a venue for small-scale water service providers to gather. The small-scale providers see their relationship of trust with communities, frequent customer feedback and flexible billing systems adapted to each customer's needs as their main strengths.

Urban versus Rural Areas
According to the Joint Monitoring Program (JMP) Report on March 2012, 43% of the Philippines had access to Level III private water service providers in 2010. However, there is a wide inconsistency between the access to water of urban areas (61%) and rural areas (25%). Although overall spending remained low, the national government has begun increasing investments on sectors outside Metro Manila.

Sewage and Sanitation
Only 5% of the total population is connected to a sewer network.The vast majority uses flush toilets connected to septic tanks. Since sludge treatment and disposal facilities are rare, most effluents are discharged without treatment. Within the entire country, septic tanks are the most common method of sewage treatment. In Metro Manila alone, about 75 local companies provide tank-desludging services.

The first Philippine constructed wetland serving about 700 households was completed in 2006 in a peri-urban area of Bayawan City which has been used to resettle families that lived along the coast in informal settlements and had no access to safe water supply and sanitation facilities. In March 2008, Manila Water announced that a wastewater treatment plant will be constructed in Taguig.

Current Charges Before Tax

 * Basic charge: This covers the cost of operating, maintaining, improving and expanding the distribution network, as well as the facilities responsible for bringing potable water to the end user. The Basic Charge is based on the latest approved tariff schedule.
 * Foreign Currency Different Adjustment (FCDA): This is a percentage of the Basic Charge which accounts for fluctuations of the Philippine Peso against other countries' currencies subject to periodic review and adjustment. The FCDA for the second quarter of 2015 is 0.18% of the Basic Charge.
 * Environmental Charge: This is for the mitigation of environmental impacts in the course of water and wastewater operation. It is 20% of the Basic Charge applicable to all customers.
 * Sewer Charge: 0% of the Basic Charge is added for Residential and Semi-Business customers with a sewer line connection. 30% of Basic Charge, on the other hand, is charged for for Commercial and Industrial customers.
 * Maintenance Service Charge: This covers the maintenance of the water meter. The charge changes depending on the size of the water meter. The minimum charge is 1.50 Philippine pesos for a 13mm-sized meter.

Value Added Tax
The value added tax (VAT) is charged by the government and accounts to 12% of the sum of the items included in current charges before tax.

Other charges
These are special miscellaneous charges such as connection fees, unscheduled desludging of septic tank service fees, etc.

Previous Unpaid Amount
This pertains to charges billed prior to the billing period. This should be settled immediately together with the current charges to avoid disconnection of water service.

Tariffs
The fragmented sector led to different tariff structures and levels according to the respective management model. The connection fees, which are charged in most of the cases, are so high that they often impede new connections for poor consumers. Average tariffs and connection fees vary according to the model of provision.

In order to introduce cost recovery tariffs and effective regulation, the NWRB issued a primer on tariff setting and regulation in March 2005. The document provides the basic guidelines of tariff setting.. The manual helps to determine future revenue requirements and to set annual base tariffs based on estimated consumption levels. Furthermore, the document gives advices on tariff structures and water rate adjustments. The process of tariff approval as well as the guidelines to prepare the required annual report are described in detail.

LGU-operated systems. In LGUs, tariff levels and structures vary widely. Since most connections are not metered, it is difficult to charge tariffs depending on consumption. Where LGUs provide Level I or II services, they usually charge no or very low tariffs, although connection fees are common. The costs of providing the service are usually met by local governments. The NWRB in its benchmarking project had about half of the average tariff of private operators and water districts.The cost of tariff in LGU-operated systems is, on average, lower than other management models.

Water Districts. In water districts, tariffs increased notably since 1996. The tariff structure is similar to the model used in Metro Manila, with an average tariff for the first 10m³ and increasing tariffs for additional consumption. At the end of 2006, the national average tariff for 30 m³ was US$0.36 per m³, more than double that of 1996. In addition, water districts usually charge connection fees. The NWRB found an average tariff of US$0.41 within a sample of 18 water districts in 2004, which is the highest average tariff of all management models. The average connection fee was US$55, somewhat lower than among private operators.

Metro Manila In the capital region, an initial tariff is to be paid for the first 10 m³ consumed, with increasing blocks for additional consumption. Furthermore, consumers connected to sewerage pay an additional charge of 50% and all users must pay a 20% environmental surcharge. For new consumers, a connection fee is charged, which was US$134 in April 2007 in the East Zone. According to the MWSS Regulatory Office, just before privatization, the average tariff per m³ in Metro Manila was US$0.26. After the concession contracts came into force in 1997, tariffs dropped to US$0.05 (East Zone) and US$0.12 (West Zone). In 2006, the average tariff rose to US$0.31 in the East Zone and US$0.43 in the West Zone (all figures converted into real 2006 prices). While the tariff was highest among private operators, the connection fee was higher within water districts.

Others. Users who rely on other sources such as private small-scale operators mostly pay more for water. In the capital region, it is a common practice to buy water from MWSS and resell. In this case, small-scale operators pay a higher tariff than the residential one and pass the higher cost on to the end-user.

Cost-recovery
The National Water Resources Board (NWRB) Philippines Towns Water Utilities 2004 Data Book contains an indicator which shows the operation ratio or cost recovery situation of each service provider. The total annual costs for operation and maintenance are divided by the annual revenue. An operation ratio under 1 means that revenues cover the costs of operation and maintenance. Out of the 45 participating utilities in 2004, only 5 had an operation ratio of more than 1, and thus, did not cover their costs. All the loss-making providers were operated directly by LGUs, and were mostly characterized by a high share of non-revenue water, poor service continuity, low tariffs, and low coverage within their respective service area. The five best-performing service providers consisted of 4 Water Districts and one private operator.

Investment
According to the World Bank, investment in water supply and sanitation in the period 1983-2003 has been far below the required levels to maintain assets, to expand access and to improve service quality. Total investment has fluctuated at around P3-4 billion a year, while alone the cost of implementing the Clean Water Act of 2004 has been estimated at up to P35 billion a year.

History
From the Philippines' independence in 1946 until 1955 most water supply systems were operated by local authorities. From 1955 to 1971, control of urban water supply was passed to the national government. In order to improve service delivery, the sector has been repeatedly subjected to extensive reforms which created numerous institutions and responsibilities. However, comprehensive water resources management was only introduced in 2004.

Pre-Marcos Administration
The Manila Waterworks Authority, founded in 1878, became part of the National Waterworks and Sewerage Authority (NAWASA) when it was founded in 1955.

Marcos Administration (1965-1986)

 * 1971. NAWASA was transformed into the Metropolitan Waterworks and Sewerage System (MWSS) in 1971 under the government of Ferdinand Marcos. MWSS was made responsible for service provision in Metro Manila, whereas other municipal and provincial water and sewerage systems in about 1,500 cities and towns were transferred back to local governments.
 * 1973. A new management model for urban water supply was introduced in 1973: LGUs were encouraged to form utilities called Water Districts which would operate with a certain degree of autonomy from LGUs. They would receive technical assistance and financial support from the newly created Local Water Utilities Administration (LWUA).
 * 1976. In 1976, the National Water Resources Board (NWRB) was created through the National Water Code of the Philippines to coordinate policies concerning water resources.
 * 1980. The Rural Waterworks Development Corporation (RWDC) was founded in 1980. It is responsible for water supply in areas where neither MWSS nor LWUA carries out the service or assists the LGUs, respectively. The RWDC was expected to create rural water supply associations in order to construct, operate, and maintain their own water supply systems in communities with fewer than 20,000 inhabitants. Aside from the RWDC, 1980 was also the beginning of the United Nations' International Drinking Water Supply and Sanitation Decade (1980&#x2013;1989). The Integrated Water Supply Program (1980&#x2013;2000) was initiated by the national government. Its main objective was to increase water coverage to 70% of the Filipino population by 1987 and 90% by 1992. Consequently, the development of the sector was supported with great effort: Between 1978 and 1990, more than US$120 million was invested in 11 rural water supply projects. Nevertheless, toward the end of the decade only 4,400 functioning rural water systems, about 5% of the 96,200 potential systems, existed in the country. Many of the recently constructed systems failed shortly after completion, partly due to poor construction and service. The Asian Development Bank (ADB) found that insufficient community participation may have led to inadequate operation and maintenance.

Aquino Administration (1986-1992)

 * 1987. In 1987, the Local Water Utilities Administration took over the work of Rural Waterworks Development Corporation which had been created only seven years earlier. The Rural Water Supply and Sanitation Master Plan of 1988 provided for the installation of 81,900 rural water supply systems by 1991. The Department of Public Works and Highways (DPWH) was expected to construct and rehabilitate Level I water wells, rainwater collectors, and springs. Every barangay should receive at least one additional potable water source. In addition, the Department of Local Government and Community Development (DLGCD) was given the task of training local water user associations in the operation and maintenance of the water facilities.
 * 1991. Under the Local Government Code of 1991, certain infrastructure function were devolved to LGUs. Barangays, municipalities, provinces, and cities were authorized to finance, operate, and maintain their own water supply systems.
 * 1992. According to the Medium-Term Philippine Development Plan 1983&#x2013;1998, at the end of Aquino's term of office in 1992, 80% of the rural population was provided with Level I water supply services, whereas 61% had direct service connections in Metro Manila and 47% in other urban areas of the country were covered by Level II and III water supply.

Ramos Administration (1992-1998)
The planning, preparation, and implementation of the privatization of the Metropolitan Waterworks and Sewerage System (MWSS) happened under the Ramos administration.
 * 1995. In 1995, the Water Crisis Act was passed, providing the legal framework for the privatization of MWSS. Private participation was implemented through a concession contract, in which the concessionaires were assigned the task of operating and managing the facilities, whereas MWSS preserved the ownership of the infrastructure. In order to facilitate benchmark comparisons, the service area was divided in two zones.
 * 1996. The plan to privatize Metropolitan Waterworks and Sewerage System (MWSS) emerged from the inability of the public utility to expand coverage to the growing population. By 1996, MWSS only provided water supply for an average pf 16 hours each day to two thirds of its coverage population. According to the ADB, the share of non-revenue water (NRW), water which is not billed, e.g., due to leakage and illegal connections, was over 60%, an extremely high percentage even compared to developing countries and much higher than in Seoul (35%), Kuala Lumpur (76%) and Bangkok (38%).
 * 1997. In 1997, the Maynilad Water Services, Inc. was awarded the concession contract for the West Zone of Metro Manila, while the Manila Water Company, Inc. was awarded the East Zone. The concession contracts were expected to last for 25 years and included targets concerning coverage, service quality, and economic efficiency. The objective was to increase water coverage in Metro Manila to 96% by 2006. The companies were expected to be regulated by the newly created MWSS Regulatory Office, financed by the concessionaires. After the concession came into force, public opposition soon emerged due to repeated tariff increases. However, it is worth mentioning that tariffs at first decreased after privatization in 1997 and did not reach the pre-privatization level until 2001/2002. Private concessionaires suffered from a severe drought and the Asian financial crisis of 1997.

Estrada Administration (1998-2001)
According to the Medium-Term Philippine Development Plan (MTPDP) 1998&#x2013;2004, the Estrada administration's main objectives concerning water were to (i) create an independent regulatory agency, (ii) develop a pricing mechanism that considers cost recovery, (iii) strengthen the implementation of watershed rules, and (iv) encourage private participation in water resources administration.

Arroyo Administration (2001-2010)
Because of the rapid currency devaluation, MWSS' dollar-denominated debt service doubled. Consequently, tariffs continued to rise and targets concerning coverage and NRW were adjusted downward with the agreement of the regulatory agency. Maynilad went bankrupt in 2003 and was turned over to MWSS in 2005. On the other hand, Manila Water had begun to make profits by 1999 and performed well financially and in reducing NRW.
 * 2001-2004. Arroyo continued to support private participation schemes and began to pursue economies of scale in the sector. Furthermore, her MTPDP (2001&#x2013;2004) calls for the creation of a single regulatory agency for all water supply and sanitation systems. After this attempt failed, economic regulation for LGUs and water districts were assigned to NWRB.


 * 2004. In 2004, the Philippines Clear Water Act was passed to improve water quality and prevent pollution through comprehensive and integrated water management. The act was the first attempt by a Philippine government to consolidate different laws concerning water resources management as well as water supply and sanitation. The main objective of the act is to improve sanitation and wastewater treatment in the country.
 * 2006. In December 2006, an 84%-stake in Maynilad was competitively awarded by MWSS to an all-Filipino partnership of construction company DM Consunji Holdings, Inc. (DMCI) and telecommunications/real estate company Metro Pacific Investments Corporation (MPIC) for a sales price of US$503.9 million. The concession was hailed by the financial industry, receiving AsiaMoney's Country Deal of the Year 2007 and CFO Asia's one of 10 best deals in Asia.
 * 2008. On August 27, 2008, Prospero Pichay was appointed chairman of the board of the Local Waterworks and Utilities Administration (LWUA), replacing acting chair Proceso Domingo. At the same time its domestic and foreign borrowing authority was proposed to be extended to $900 million, upon the approval of Department of Finance and the Central Bank, the Bangko Sentral ng Pilipinas.

Aquino Administration (2010-2016)

 * 2013. The Bottom-Up Budgeting (BUB) Project was implemented by the administration, in its 2013 National Budget, to fund projects that would help the country attain its Millennium Development Goals of inclusive growth and poverty reduction. In promoting good governance in the local level, by having local governments listen to their constituents in terms of budgeting processes, the National Budget was guided to respond to the urgent needs of the people as identified at the grassroots level.
 * 2014. Another program of the administration, through the Department of Interior and Local Government, is the Sagana at Ligtas na Tubig Para sa Lahat (SALINTUBIG) program that aims to provide clean and potable water supply to almost 455 waterless municipalities in the Philippines. As of 2014, 253 projects and 118 more are ongoing all over the country.
 * 2015. The BUB project proved to be a success as the Department of Interior and Local Government, spearheaded by Secretary Mar Roxas, was able to build a potable water system supporting 385 households in Mati City, Davao Oriental. At the same time, a health station was constructed that is posed to benefit 2,375 households through the BUB project by the Department of Health. With a budget of P410 Million, for BUB projects in Davao Oriental, government projects are geared towards a safer and healthier future for all.

Policy
General policies concerning the water and sanitation sector are formulated by the National Economic and Development Authority (NEDA) in its MTPDP. Since the 1990s, private sector participation and decentralization are the main objectives of water policies. The MTPDP of 2004&#x2013;2010 aims at extending coverage of potable water to 92%&#x2013;96% by 2010 through public and private investment, with priority given to 400 barangays with poor water supply coverage.

The Department of Public Works and Highways provides technical assistance in rural water supply systems. National standards for drinking water quality as well as standards concerning sanitation and sewerage collection are set by the Department of Health. The Philippine Department of Environment and Natural Resources (DENR) is the lead ministry for implementing water sector legislation, whereas the Department of Finance takes the lead in financing water policies at the national level. The National Water Resources Board (NWRB) under the DENR is responsible for water resources management.

The responsibilities are defined by the 1976 National Water Code and the 2004 Clean Water Act, which consolidated laws on water supply and sanitation and water resources management.

==== 1976 National Water Code (PD 1067) ==== Regarded as Presidential Decree No. 1067, dated December 31, 1976, the 1976 National Water Code was an effort of then President Ferdinand E. Marcos that aimed to strengthen water legislations in the face of the increasing scarcity of water and its changing water patterns. The Water Code was an intended solution to revise and consolidate regulations made on the ownership, appropriation, utilization, exploitation, development, conservation and protection of water resources in the country. Founded on the principle that “All waters belong to the State,” the National Water Resources Council was then created and tasked to control and regulate the use and development of water resources in behalf of the government.

Regulations were made through the acquisition of water permits, given to persons not limited to government-owned and controlled corporations, for water appropriation and usage. Specifications were included on the maximum amount of water diverted or withdrawn, the maximum rate of diversion or withdrawal and the times during the year when water may be diverted or withdrawn. Instances may also arise where water permits are revoked on cases of non-use, violation of the conditions imposed by the Council, unauthorized sale of water, pollution and public acts detrimental to public health and safety.

In declared flood control areas, rules and regulations are administered to prohibit and control activities that may damage and cause deterioration of the lakes and dikes, changes in the natural flow of the river and increases in flood losses or intensified floods. Watersheds, or areas of land adjacent to any surface water or overlying any groundwater, are to be declared as protected areas of the Department of Environment and Natural Resources. These efforts ensure the quality of water defined by a standard set by the National Pollution Council Commission according to the different uses of water. Except those functions under the Code that may fall under specific government agencies, the Council is given the power to make all necessary decisions and determinations provided for in the said Code. The Council may provide accompanying penalties consisting of fines not exceeding One Thousand Pesos (P1,000.00) and/or the suspensions or revocation of water permits or any rights given to use water as well as enforce its decisions with the assistance of local and national police agencies.

==== Philippine Clean Water Act of 2004 (RA 9275) ==== Republic Act 9275 provides for a comprehensive water quality management policy amidst economic growth. The policy provides for the consistent protection, preservation and revival of the quality of Philippine waters with frameworks patterned through the pursuit of sustainable development. Importantly provided for by this act are Water Quality Management Systems and Institutional Mechanisms.

Water Quality Management Systems involve area designations by the Department of Environment and Natural Resources (DENR), national sewage and septage management programs and allocation of special funds to support and maintain water quality. Areas that have similar hydrogeological conditions, which affect the physiochemical, biological and bacteriological reactions and diffusions of pollutants in the water bodies, are declared as Water Quality Management Areas. The management area is governed by a DENR representative as chair and board members composed of representatives from local government units (LGUs), relevant national government agencies, registered non-governmental organizations, water utility sectors and business sector. On the other hand, water bodies with specific pollutants that have exceeded the guidelines for water quality are identified as Non-attainment Areas. LGUs are tasked to prepare and implement contingency plans, such as relocations, for the protection of the health and welfare of the residents, while the government improves the affected quality of water within the potentially affected areas.

Funds administered by the DENR, and other concerned agencies, are on special accounts in the National Treasury to be utilized in financing containment and clean-up operations in water pollution cases; restorations of ecosystems and rehabilitation of affected areas; research, enforcement and monitoring activities; technical assistance to implementing agencies; grants as rewards and incentives; and other disbursements made solely for the prevention, control of water pollution and administration of the management areas in the amounts authorized by the Department.

Wastewater charges are also established to provide strong economic inducement for polluters to modify their production or management processes or to invest in pollution control technology in order to reduce the amount of water pollutants generated in their discharge of wastewater into water bodies. Owners, or operators of facilities, that discharge regulated waste are then required to secure discharge permits.

Institutional Mechanisms emphasized the collaborative efforts made in the hopes of having cleaner and better quality water through the Lead Agency (DENR); the Roles of Local Government Units in sharing the responsibility of maintaining and improving water quality within their territorial jurisdictions; the Business and Industry Role in formulating incentives for the adoption of innovative equipment and processes that preserve and protect water bodies; and Linkage Mechanisms with partnerships with government agencies and departments such as the Philippine Coast Guard, DPWH, Department of Agriculture (DA), DOH, Department of Science and Technology (DOST), Department of Education (DepEd), Commision on Higher Education (CHED) and Department of the Interior and the Local Government (DILG).

Local Waterworks and Utilities Administration (LWUA)
The LWUA is a specialized lending institution that promotes and oversees the development of provincial waterworks. It is also entrusted with setting water quality and service standards for water districts. Furthermore, it provides technical assistance and is sometimes involved in the districts through board members.

P.D. 198 (May 25, 1973), the Provincial Water Utilities Act of 1973 created LWUA and the water districts. The decree authorized the formation, on local option basis, of autonomous water districts to develop the local water supply systems and the establishment of a national-level agency to cater to the needs of these water districts. According to the LWUA website, to date, it has established 584 water districts covering about 691 cities and towns outside Metro Manila. It has completed a total of 1,431 water supply projects while extending P 17 billion in loans to the districts of which P11 million has been availed to the benefit of some 12 million Filipinos with improved water.

National Water and Resources Board (NWRB)
The National Water and Resources Board (NWRB) is the forefront government agency which handles the Philippines water sectors’ policies, regulations and quasi-judicial functions. It acts accordingly with the principles of the Integrated Water Resource Management (IWRM) as it ensures the efficiency, conservation, utilization, development and protection of the state’s water supply.

Rural Waterworks Development Corporation (RWDC)
Executive Order No. 577 which was passed last January 12, 1980, aims to provide full coverage of water supply services in the country. In line with this, RWDC was established to bring and administer water supply in areas with less than 20,000 as population. RWDC works together with LWUA in determining areas under their jurisdiction.

Department of Interior and Local Government
Concerning local government-managed systems, the Department of Interior and Local Government (DILG) defines and enforces quality and performance standards. However, in both cases local governments retain the responsibilities for planning, financing, and regulating water supply.

Philippine Center for Water and Sanitation
The Philippine Center for Water and Sanitation (PCWS) provides technical assistance to local governments, communities and non-profits on low-cost water supply and sanitation options. It is also engaged in action research with households. It leads the Philippines water sanitation and health (WASH) coalition of non-profits and local governments. It was created in 1990 under the name of International Training Network (ITN) and adopted its current name in 1998.

Financing and External Cooperation
Outside the privatized services in Metro Manila, one source of finance for water supply are government grants channeled through the Local Water Utilities Administration (LWUA) and the Municipal Development Funds Office (MDFO). But these are far from sufficient to meet investment needs, which is why loan financing is necessary. Some LGUs obtain loans from public banks such as the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (LBP), which in turn obtain some of their funds from the World Bank or JICA from Japan (see below).

External development agencies that work on water supply and sanitation in the Philippines include the ADB, GTZ, JICA, USAID and the World Bank.

Asian Development Bank (ADB)
The Asian Development Bank (ADB) has assisted the government in increasing sanitized water supply to different sectors in the Philippines. Through the MWSS New Water Source Development Project, approved in 2003 and ended in October 2008, ADB has contributed a total of US$3.26 million, whereas MWSS provided US$1.71 million. The joint-project sought to develop up to 3 water source projects for Metro Manila and to improve the financial management as well as the accounting and fiscal control systems of MWSS. In 2008 as well, studies for two water source projects were completed emphasizing environmental and social impacts amidst water quality improvements.  In 2013, the ADB made preparations for loans for financing: the Water District Development Sector Project, the Urban Water and Sanitation Sector Project, the Angat Water Transmission Improvement Project, and future technical assistance and other lending activities to be discussed with specific Government agencies involved.

ADB was also able to release a report on the assessments of current conditions and constraints to developing water supply and sanitation in the country, strategies to be implemented to counter and solve these constraints and road maps and plans on a sustainable sanitation reality for all. The Philippine Sustainable Sanitation Roadmap and Plan (PSSR), included in the report, served as a guide for water sanitation efforts as it presented the vision, goals, outcomes, outputs, activities and inputs needed to achieve an improved water quality nationwide. Approved by the subcommittee on Water Resources in 2010, the Department of Health (DOH) has agreed to spearhead the agenda by preparing a national sustainable sanitation plan based on the PSSR. The DILG has also aligned its water and sanitation strategy with the requirements of the PSSR.

German Corporation for International Cooperation (GTZ)
The German Corporation for International Cooperation (GTZ) supports the sector through the rural water supply and sanitation program, designed to improve the living conditions of the poor in selected rural areas of the country. The program seeks to overcome the institutional confusion and to strengthen governmental organizations at the national, provincial, and municipal levels. The main program partner is the Department of Interior and Local Government (DILG). In addition, the decentralization plan of the National Water Resources Board is supported. The program, which ran from 2006 to 2009, had already achieved a successful introduction of low-cost options for sanitation, the construction of dehydration toilets, and the first Philippine constructed wetland, treating wastewater from about 700 households.

World Bank
The World Bank supports the Philippine water supply and sanitation sector through various projects often in collaboration with the government and the Land Bank of the Philippines.

Manila Third Sewerage Project
In 2007, the World Bank approved an investment loan of US$5 million. The objectives of the project were to assist the Philippine government in reforming institutions in order to attract private investment in the wastewater sector, to improve the coordination of institutions responsible for preventing water pollution, and to promote innovative wastewater treatment techniques. The project, which ran from from 2007 to 2012, provided technical assistance as well as support for institutional coordination and private sector involvement.

The project followed the Manila Second Sewerage Project, which was carried out from 1996 to 2005. After the privatization of MWSS, it was restructured in order to adapt it to the new institutional framework. The objectives were to (i) reduce the pollution of waterways in Metro Manila and its surrounding bays; (ii) reduce the health risks caused by human exposure to sewage in Metro Manila; and (iii) establish a gradual low-cost improvement of sewerage services in Metro Manila. From 1997 to 2005, the number of people with sewer connections increased from 721,000 to 1,101,000 and the population with regularly desludged septic tanks rose from only 1,600 to 288,000. The total cost of the project was US$48.06 million.

Urban Water and Sanitation Project APL2
This project aimed to reach approximately 40 LGU-operated water systems, which were given technical assistance and financial support. The four components of the project were to: (i) finance civil works, equipment, and supervision for improved water supply systems in LGUs, including private sector participation where feasible; (ii) finance improved sanitation infrastructure; (iii) provide investment and assistance in micro-drainage infrastructure; and (iv) provide funds for the hiring of a construction supervision consultant and specialized consultants. The World Bank decided to contribute through a US$30 million loan to the project, while the remaining US$5.2 million are financed by local institutions. The project began in 2001 and ended in 2008.

The World Bank supports private sector participation through Design-Build-Lease contracts and Long-Term Operation and Maintenance contracts between LGUs and private operators. Therefore, the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (LBP) channel financing from the World Bank to LGUs, which engage private operators. Under the Design-Build-Lease contracts, valid for 15 years and renewable for an additional 15 years, a local private operator prepares, builds, and operates a new water supply system. A World Bank loan channeled through the DBP finances 90% of the construction cost, and the remainder is contributed through the LGU. The water tariff must cover expenses for operation and maintenance, as well as a lease fee and a return for the private operator.

Long-Term Operation and Maintenance contracts are used in LGUs which recruit a private company to construct a new water supply system and later engage water associations or user cooperatives to operate the system under the contracts, which are awarded for 15 years with the possibility of renewal for another 15 years. Similar to the Design-Build-Operate contracts, 90% of the construction cost of the water system is financed with a World Bank loan channeled through the LBP. The water user groups are required to work under commercial rules. They have full administrative, accounting and financial autonomy.

Metro Manila Wastewater Management Project (MWMP)
Last 2012, the World Bank was able to approve a budget of $275 Million for a project aimed at improving wastewater collection and treatment practices in several catchment areas of Metro Manila and help improve Manila Bay’s water quality. Entitled the Metro Manila Wastewater Management Program (MWMP), the project supports investments from the Manila Water Company, Inc (MWCI) and Maynilad Water Services, Inc. in increasing collection and wastewater treatment primarily from households and establishments in the area. The project is divided into 2 components as MWCI takes charge of the east zone and Maynilad the west zone, of the metropolitan.

With a budget of $193.4 Million, investments by Maynilad include: (a) a sewage treatment plant, and the necessary sewage lines, covering North and South Pasig; and (b) the carrying out of other wastewater management investment sub-projects agreed upon by the government, Land Bank of the Philippines, World Bank and MWCI. Maynilad, with a budget of $178.3 Million, has its investments: (a)  in sewage treatment plants and associated wastewater conveyance systems in Quezon City, Pasay, Alabang, Muntinlupa, Valenzuela; and (b) a septage treatment plant in the southern part of Metro Manila.

With about 2 million cubic meters of wastewater generated daily, and only 17% of this getting treated before disposal to water bodies around the metro, water pollution has destroyed most of Manila Bay and the nearby Laguna de Bay. Manila Water and Maynilad have both conceptualized a 25-year program that ensures 100% wastewater collection and treatment for Metro Manila. With the MWMP, their efforts would be supported and would aid in not just improving the current state of the surrounding environment but also contribute to a boost in recreational and tourism opportunities.

Japan International Cooperation Agency (JICA)
The Japan International Cooperation Agency, along with the international community striving to achieve the targets of United Nations’ Millennium Development Goals (MDG), has been campaigning to make a significant reduction in the number of people who still lack access to safe drinking water. Reliable water resources management, improvement of access to water supply in urban areas, reduction of non-revenue water (NRW), improvement of water/energy use, sustainable rural water supply, and promotion of improved sanitation in developing countries are the main issues that JICA prioritizes. In 2008, through the Development Bank of the Philippines, about $200 million was loaned to the Philippines to fund local governments and domestic private-sector companies for the development of water supply and sewerage facilities. Despite the establishment of funding, financing will only be granted to water utilities if the business management improves, hence JICA actively assists the water supply utilities’ capacity development through practical cooperation with financial aid. JICA not only works to improve access to safe drinking water in urban areas of developing countries, but also aids water facilities with business planning and management.

Drinking water quality
Especially in urban areas, water quality does not meet the standards set by the national government. As a result, waterborne diseases remain a severe public health concern in the country. About 4,200 people die each year due to contaminated drinking water.

Non-revenue water
Non-revenue water (NRW) is defined as the difference between the amount of water put into the distribution system and the amount of water billed to consumers. It is usually used as an indicator for water utility performance. High levels of non-revenue water usually indicate low quality water utility. It comprises of three components: (a) Physical losses which comprise of leakage from the system caused by poor operations and maintenance, the lack of active leakage control, and poor quality of underground assets, (b) Commercial losses caused by under-registration of water meters, errors in data handling, and theft, and (c) Unbilled authorized consumption which includes water used by the utility for operational purposes (firefighting and specific consumer groups).

In Metro Manila, non-revenue water (NRW) decreased at least in the East Zone since privatization. In 1996, it had been at 61% for Manila, compared to 35&#x2013;38% in the Asian capitals Hong Kong, Seoul, Kuala Lumpur, and Bangkok. In 2002, it had dropped to 53% in the East Zone and increased to 69% in the West Zone, which encountered severe financial problems. According to the concessionaire Manila Water, the share of NRW continued to fall until reaching 11% at the end of 2010.

According to the NWRB Philippines Towns Water Utilities 2004 Data Book, the average share of NRW among the participating service providers was 27.5% in 2004. The particularly high NRW of Manila's West Zone is confirmed in the record with 68%. Generally, the smaller utilities performed better concerning NRW than the larger ones. However, many NRW data are based on estimates, given the fact that only 15 of the 45 service providers had 100% production and consumption metering coverage.

Labor Productivity
Staff was reduced at Metropolitan Waterworks and Sewerage System after privatization. Whereas in 1996, on average, 10 employees were responsible for 1,000 connections, in 2002 there were 4 employees, a decrease of 58%. According to LWUA, in 2002 about 7 employees per 1,000 connections worked in water districts. A study including 4 sample LGUs found 21 employees per 1,000 connections in 2002. Small LGUs suffer from their low number of total connections.

The NWRB Philippines Towns Water Utilities 2004 Data Book found, on average, 7 employees per 1,000 connections in 2004. Private utilities on average performed best and systems which were directly managed by LGUs performed worst. Not surprisingly, providers with more than 10,000 connections need significantly fewer employees per connection than those with fewer than 10,000 connections.

Other challenges
Although water resources become scarce in some regions and seasons, the Philippines as a whole has more than enough surface and groundwater. However, the neglect of a coherent environmental policy led to the actual situation, in which 58% of the groundwater is contaminated. The main source of pollution is untreated domestic and industrial wastewater. Growing population, wasteful and inefficient use of water, continued denudation of forest covers, and saltwater intrusion caused by unrestrained withdrawal of groundwater are some of the main challenges faced by the country’s water resources.

Population and Pollution
One third of Philippine river systems are considered suitable for public water supply. It is estimated that in 2025, water availability will be marginal in most major cities and in 8 of the 19 major river basins. Besides severe health concerns, water pollution also leads to problems in the fishing and tourism industries. The national government recognized the problem and since 2004, has sought to introduce sustainable water resources development management.

With rapid increase in population, urbanization, and industrialization, the quality of Philippine waters is reduced especially in densely populated areas and regions of industrial and agricultural activities. According to data from the DENR and PEM, domestic wastewater discharges, agricultural wastewater, and industrial wastewater are the three main sources of water pollution. These are also known as “point sources” that emanate toxic substances into “non-point sources” or certain bodies of water. Domestic wastewater consists of sewage containing organic waste, solids, and coliforms produced by domestic activities such as laundry, bathing, cooking, and other kitchen activities. Agricultural wastewater, the major source of pollution in rural areas, contain pollutants resulting from agricultural and livestock activities like the maintenance of piggeries which usually do not have proper wastewater treatment facilities. Different industries also contribute largely to the water pollution. Industrial activities such as manufacturing of food, textile, paper, and slaughterhouses emit large amounts of organic waste.

El Niño and Global Warming
El Niño, a weather phenomenon occurring about every two to seven years when warm water in the western tropical Pacific Ocean shifts Eastward, causing ocean temperatures to be warm, last developed in the country in late 2014. For the past several decades, it has been observed that its occurrence has increased due to climate change as a result of global warming. Its negative impacts may either be heavy rainfall or drought. El Niño greatly impacts the power supply, water supply, and agricultural sectors of the country. The reduced rainfall leading to drought causes shortage in water supply leading to the rationing of water in some situations, shortage in hydropower supply, and food supply.

Denudation of Forest Cover
The supply of water from most freshwater bodies usually come from watersheds, patches of forest cover that absorbs rainwater and channels it into streams, rivers, and eventually dams where many human communities (especially Metro Manila) source their freshwater. Despite the role of the forest in the replenishment and maintenance of both ground and surface water, the Philippines is considered to be one of the most severely deforested countries in the tropics as it lost more than 97% of its original forest cover in the last 50 years.

Saltwater Intrusion
One of the areas in most risk of saltwater intrusion is Metro Manila. Since the late 1960s, saline water intrusion has been evident along the coastal areas of Metro Manila, stretching from Las Pinas to Malabon. The shallow water table aquifer is in direct contact with the sea in these coastal areas. The over-pumping of groundwater results to cones of depression which increase the risk of saltwater intrusion. According to a joint study by MWSS and JICA in 1991, most groundwater samples from Metro Manila’s coastal areas were salinized. However, compared to the early 1980s, saline intrusion was found to have improved conditions because of the conversion of water source from groundwater to surface water upon the completion of the Manila Water Supply Project II in 1987. Aside from excessive withdrawal of groundwater, seepage of brackish water along the Pasig River is another cause of saltwater intrusion because of seawater movement during tides.

Service providers

 * Metropolitan Waterworks and Sewerage System (MWSS)
 * Manila Water Company (Concessionaire of the East Zone of Metro Manila)
 * Maynilad Water Services, Inc. (Concessionaire of the West Zone of Metro Manila)
 * Philippine Association of Water Districts
 * Local Water Utilities Administration

Regulation and policy

 * Metropolitan Waterworks and Sewerage System Regulatory Office
 * National Water Resources Board (NWRB)

Non-governmental organizations

 * Philippine Water Partnership